Mealey's Insurance Bad Faith : Mealey's : Legal News & Analysis

Mealey's Insurance Bad Faith

October 11, 2024
Insurer: Alleged Sexual Assaults Do Not Constitute Religious Expression Injury

SEATTLE — A church’s insurer filed a declaratory judgment lawsuit in a Washington federal court, disputing coverage for an underlying claim alleging a minor was sexually assaulted on multiple occasions by the church’s deacon.
October 10, 2024
Claims Objection Bar Date Extension Granted In Liquidation Of Vesttoo

WILMINGTON, Del. — A Delaware federal bankruptcy judge has granted a motion to extend the claims objection bar date by 180 days to April 7 in the Chapter 11 liquidation of Vesttoo Ltd. and its dozens of affiliates.
October 08, 2024
Breach Of Contract Claim Is Only Viable Claim In Water Damage Coverage Suit

NEW HAVEN, Conn. — A breach of contract claim alleged against a property insurer can proceed because the policy’s water exclusion is ambiguous as to whether it covers water damages caused by blocked pipes in an insured building; however, claims alleging bad faith and violations of Connecticut law must be dismissed for failure to state a claim, a Connecticut federal judge said in partially denying the insurer’s motion to dismiss.
October 08, 2024
High Court Denies Certiorari In Auto Damage Suit Filed By Third-Party Claimant

WASHINGTON, D.C. — The U.S. Supreme Court on Oct. 7 denied a third-party claimant’s petition for writ of certiorari, refusing to review a California appellate court’s ruling that the claimant lacks standing to bring claims for negligence, intentional infliction of emotional distress (IIED) and bad faith against a tortfeasor’s auto insurer.
October 07, 2024
N.Y. Court Allows Claims To Stand In University’s Suit Over Sexual Abuse Claims

NEW YORK —A New York appeals court unanimously affirmed a lower court’s denial of primary and excess commercial general liability insurers’ motion to dismiss the Rockefeller University’s claims for breach of the implied covenant of good faith and fair dealing and violation of New York General Business Law Section 349(a), allowing the claims to proceed in the dispute over coverage for several hundred underlying allegations that a former university employee sexually abused children for a span of 40 years.
October 04, 2024
Panel Vacates Portion Of Ruling Issued In Insurer’s Favor In Mold Coverage Suit

ATLANTA — The 11th Circuit U.S. Court of Appeals vacated a district court’s summary judgment ruling in favor of an insurer on breach of contract, declaratory judgment and bad faith claims after determining that the insured met its burden of proving that there is a potential of coverage for mold damage even if there was damage that existed before the issuance of the policy.
October 03, 2024
Alter Ego Liability Theory Rejected In Ruling On Summary Judgment Motions

SACRAMENTO, Calif. — Ruling on two motions for summary judgment on cross-claims in a suit involving reinsurance and related agreements, a California federal judge rejected an alter ego argument, granting one motion fully and the other partially.
October 02, 2024
Federal Judge Stays BlueCross’ Bad Faith Suit Against Insurer Pending Mediation

HARRISBURG, Pa. — A federal judge in Pennsylvania administratively stayed Capital BlueCross’ breach of contract and bad faith lawsuit against its errors and omissions insurer to allow the parties to proceed through private mediation of the coverage dispute over an underlying antitrust multidistrict litigation.
October 01, 2024
Fact Issues Exist On Whether Coverage Is Owed For Water, Mold Damages, Judge Says

LOS ANGELES — A California federal judge denied a motion for summary judgment filed by insurers that denied coverage for mold and water damages sustained in numerous buildings of an insured’s construction project because questions of fact exist as to whether the policies’ fungus extension and delay in opening extension afford coverage and whether the policies’ exclusion for cost of making good (COMG) excluded coverage for any damage caused by faulty workmanship.
September 30, 2024
Contractor Says Coverage Is Owed For Damages To Entirety Of Building

CINCINNATI — A federal district court erred in refusing to find that coverage is owed for damages to the entirety of a building as a result of the collapse of some of the bricks from one of the building’s walls, the contractor says in an appellant reply brief filed in the Sixth Circuit U.S. Court of Appeals.
September 30, 2024
Extracontractual Claims To Proceed; Questions Of Fact Exist, Judge Says

SEATTLE — An insured’s extracontractual claims alleged against two auto insurers can proceed because questions of fact exist regarding whether the auto insurers’ initial offer to settle the insured’s claim for underinsured motorist benefits was reasonable.
September 27, 2024
Panel Remands Punitive Damages Award For Reduction To Comply With Wisconsin Law

WAUSAU, Wis. — The Third District Wisconsin Court of Appeals reversed a $1 million punitive damages award entered in an insured’s favor against an auto insurer and remanded with instructions to reduce the award by more than $200,000 because under Wisconsin law, a punitive damages award cannot exceed the greater of twice the amount of a compensatory damages award or $200,000.
September 27, 2024
Evidence Does Not Support Statutory, Common-Law Bad Faith Claims Against Insurer

DENVER — An insured’s statutory and common-law bad faith claims alleged against an auto insurer cannot proceed because the insured failed to show that a reasonable jury could find that the insurer acted unreasonably or recklessly in handling her claim for underinsured motorist benefits, a Colorado federal judge said in granting the auto insurer’s motion for summary judgment.
September 27, 2024
Extracontractual Claims Against Auto Insurer Fail, Texas Federal Judge Says

HOUSTON — A Texas federal judge granted an auto insurer’s motion for summary judgment on an insured’s extracontractual claims because the insured failed to show that she sustained any injury or damages that are independent of the nonpayment of policy benefits.
September 26, 2024
Claims Objection Bar Date Extension Sought In Liquidation Of Vesttoo

WILMINGTON, Del. — A Delaware federal bankruptcy judge has been asked to extend the claims objection bar date by 180 days in the Chapter 11 liquidation of Vesttoo Ltd. and its dozens of affiliates.
September 26, 2024
Legitimate Dispute Over Coverage For Insureds’ Roof Existed, Federal Judge Says

OKLAHOMA CITY — A bad faith claim alleged against a homeowners insurer that denied coverage for the replacement of the insureds’ roof following a hail storm cannot proceed because the evidence shows that a legitimate dispute over coverage under the policy existed, an Oklahoma federal judge said in granting a homeowners insurer’s motion for summary judgment.
September 26, 2024
Limited Discovery Warranted To Determine Auto Insurer’s State Of Citizenship

OXFORD, Miss. — A Mississippi federal judge denied an auto insurer’s motion to dismiss without prejudice after determining that limited discovery is warranted to determine if complete diversity of citizenship exists between the insurer and the insured.
September 25, 2024
Judge Tosses All Claims In Hurricane Coverage Dispute With Guaranty Association

NEW ORLEANS — “Considering” the parties’ joint dismissal motion, a Louisiana federal judge dismissed with prejudice a breach of contract suit over damages from Hurricane Ida filed against the Louisiana Insurance Guaranty Association (LIGA), which was substituted for an insolvent homeowners insurer.
September 24, 2024
Federal Magistrate Judge Refuses To Bifurcate Bad Faith Claims In Auto Coverage Suit

LAS CRUCES, N.M. — A New Mexico federal magistrate judge on Sept. 23 denied an auto insurer’s motion to bifurcate and stay discovery of an insured’s bad faith claims after determining that resolution of the insured’s claim for underinsured motorist (UIM) benefits will not result in the resolution of the bad faith claims because the insured alleges bad faith acts that are independent of the insurance contract.
September 24, 2024
Panel Says Insured Failed To Show He Is Disabled From Both Occupations As Required

TRENTON, N.J. — The Third Circuit U.S. Court of Appeals affirmed a district court’s ruling in favor of a disability income insurer, agreeing with the lower court’s determination that the insured failed to show that he cannot perform the substantial and material duties of his occupations as an ophthalmic surgeon and ophthalmologist.
September 20, 2024
Summary Judgment Granted To Insurer For ‘Legal Fraud’ In Insurance Application

TUCSON, Ariz. — An Arizona federal judge granted summary judgment to a homeowners insurer in its suit seeking to rescind its insured’s policy for material misrepresentation in the insurance application, finding that the insured’s misrepresentation that the property was his primary residence and failure to correct the policy’s terms representing this residency “constitute legal fraud,” thereby making rescission “proper.”
September 20, 2024
Issues Of Fact Exist On Insureds’ Breach Of Contract, Bad Faith Claims

OKLAHOMA CITY — A homeowners insurer is not entitled to summary judgment on breach of contract and bad faith claims because issues of fact exist regarding the valuation of the insureds’ claim and whether the insurer acted in bad faith in investigating and evaluating the insureds’ claim for damages caused by a storm to their home.
September 19, 2024
Interpretation Of ‘Direct Physical Loss’ Phrase Was Erroneous, Building Owner Says

CINCINNATI — A district court erred in relying on a definition of the term “direct physical loss” as used in a prior opinion issued by the Sixth Circuit U.S. Court of Appeals when it determined that the collapse of some bricks from a wall within a building did not cause any damage to the wall or building as a whole, the building owner maintains in a Sept. 18 appellant reply brief filed in the Sixth Circuit.
September 18, 2024
Status Conference Sought In Arbitration Awards Row In Reinsurance Dispute

NEW YORK — Months after briefing concluded on pending cross-petitions in an arbitration awards dispute involving attorney fees and whether there was a probability or a possibility of an excess judgment in the underlying case, a reinsurer on Sept. 17 asked a New York federal court for “a status conference to determine whether the parties may supply the Court with any additional materials to resolve this cross-petition.”
September 18, 2024
Magistrate Partly Grants Motion To Quash Discovery On Reinsurance, Reserves

LAKE CHARLES, La. — Partly granting an insurer’s motion to quash in a breach of contract and bad faith suit over home damage purportedly caused by hurricanes, a Louisiana federal magistrate judge cited two other decisions in ruling that that certain reinsurance and reserve information and the requested prior deposition testimony are within the scope of permissible discovery.