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

Mealey's Insurance Bad Faith

February 13, 2025
Breach Of Fiduciary Duty Claim Against Insurer Is Duplicative Of Bad Faith Claim

SEATTLE — An insured’s claim for breach of fiduciary duty against a homeowners insurer must be dismissed because the claim is duplicative of the insured’s claim for breach of the duty of good faith and fair dealing, a Washington federal judge said in granting the insurer’s motion to dismiss the claim.
February 13, 2025
Insurer’s Payment Forecloses Bad Faith Claims, Not TPPCA Claims, Panel Says

NEW ORLEANS — A district court’s judgment in favor of an insurer on an insured’s claim for violation of the Texas Prompt Payment of Claims Act (TPPCA) must be vacated because the insurer is not absolved from liability under the TPPCA simply because it paid an appraisal award in full; however, the district court’s judgment in favor of the insurer on the insured’s bad faith claims must be affirmed because the insured’s payment of the appraisal award forecloses the insured’s bad faith claims, the Fifth Circuit U.S. Court of Appeals said.
February 13, 2025
Suit Tossed For No Jurisdiction Absent Evidence Of Website Targeting Residents

JACKSON, Miss. — A Mississippi federal judge dismissed a breach of contract and bad faith suit against an international travel insurer and its purported agent over the insurer’s failure to reimburse medical expenses, finding that because the insured failed to provide evidence showing that the insurer’s website was designed to specifically target Mississippi residents, the court lacks personal jurisdiction over the insurer.
February 13, 2025
Negligent Misrepresentation Claim Cannot Proceed Against Insurance Agency

SAN JOSE, Calif. — A California federal judge granted an insurance agency’s motion to dismiss a negligent misrepresentation claim in a breach of contract and bad faith suit arising out of the denial of a fire damage claim because the insureds failed to provide any specific information regarding the agent who allegedly made a misrepresentation and failed to provide any details regarding the insureds’ interaction with the agent.
February 12, 2025
Partial Dismissal Granted In Hail Damage Coverage Row Over Roof Tile Replacement

DENVER — A Colorado federal judge on Feb. 11 granted in part homeowners’ motion to dismiss a misrepresentation counterclaim in a breach of contract suit against their homeowners insurer over the cost to repair their hail-damaged roof, finding that though the counterclaim failed to allege knowing misrepresentation, the homeowners failed to provide any argument to support their request for dismissal with prejudice.
February 12, 2025
Panel Reverses Attorney Fees Award In Octogenarian’s Bad Faith Suit Over Hail Damage

FORT WORTH, Texas — A Texas appeals panel reversed and remanded a trial court’s award of appellate attorney fees in favor of an octogenarian insured in her bad faith lawsuit seeking coverage for her roof damage caused by hail and wind and affirmed the remainder of the lower court’s judgment, finding that the evidence was sufficiently strong to support the jury's conclusion that the insurer knowingly took advantage of the insured’s “‘lack of knowledge, ability, experience, or capacity . . . to a grossly unfair degree.’”
February 11, 2025
Reinsurer Voluntarily Dismisses Suit Concerning Alleged Claims Mishandling

BILLINGS, Mont. — A Bermuda-based reinsurer that sought declaratory judgment and damages for claims that it alleged were mishandled and misallocated has filed a notice of dismissal without prejudice in Montana federal court regarding its suit against an insurer and third-party administrator (TPA).
February 11, 2025
Insurer Maintains No Coverage Owed For Remediation Costs

ALBUQUERQUE, N.M. — No coverage is owed for investigation and remediation costs as a result of contamination discovered at and near the site of an insured dry cleaning business because no suit has been filed against the insured and because the policy pollution exclusion bars coverage, an insurer says in its reply in support of its motion for summary judgment filed in New Mexico federal court.
February 11, 2025
Insureds Failed To Show Additional Coverage Owed For Asbestos Removal, Judge Says

DALLAS — Insureds seeking additional coverage for the removal of asbestos in their home failed to show that additional coverage is afforded under their homeowners policy for removal of asbestos that was not related to the insureds’ claim for water damage in their home, a Texas federal judge said in granting the insurer’s motion for summary judgment on the insureds’ breach of contract and extracontractual claims.
February 07, 2025
5th Circuit Affirms Ruling In Insurer’s Favor In Bad Faith Suit Over Wind Damage

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on Feb. 6 held that a lower federal court properly granted summary judgment in favor of a homeowners insurer as to the insured’s extracontractual bad faith claims in a wind damage coverage dispute, finding that the insured is barred him from recovering any additional damages from the insurer under Texas Supreme Court precedent.
February 07, 2025
Federal Jury Awards Insured $39.9M In Damages In Hailstorm Coverage Dispute

TYLER, Texas — A jury in a Texas federal court unanimously awarded an insured $4,838,747 in damages for its commercial property insurer’s breach of contract and $35 million in exemplary damages for the insurer’s breach of its duty of good faith and fair dealing in a coverage dispute arising from property damage that was caused by an April 12, 2020, wind and hailstorm.
February 07, 2025
8th Circuit: Exclusion Bars CGL Coverage For Loss Caused By Defective Design

ST. LOUIS — The Eighth Circuit U.S. Court of Appeals on Feb. 6 affirmed a lower federal court’s grant of summary judgment in favor of a commercial general liability insurer in an insured’s breach of contract and bad faith lawsuit seeking coverage for losses caused by a defectively designed hopper bin that catastrophically failed at a Mexico facility, agreeing with the lower court that the policy’s professional services exclusion barred coverage.
February 06, 2025
6th Circuit Stands By No Coverage Ruling In Home Depot’s Suit Over Data Breach

CINCINNATI — The Sixth Circuit U.S. Court of Appeals on Feb. 5 denied Home Depot’s petition seeking a panel rehearing of a majority ruling that affirmed an Ohio federal court’s finding that a commercial general liability insurance policy’s electronic data exclusion bars coverage for Home Depot’s losses stemming from a 2014 data breach.
February 06, 2025
Partial Dismissal Of Counterclaims Granted In $3.3M Health Care Fraud Dispute

ANCHORAGE, Alaska — An Alaska federal judge on Feb. 5 granted in part a motion to dismiss counterclaims in a fraud suit filed by an Alaska health insurer against a California treatment facility alleging approximately $3.3 million of fraudulent claims related to the facility purportedly falsifying income of prospective patients when enrolling them in the health insurer’s plan, finding that the bad faith counterclaims should be dismissed as not adequately pleaded and that there is no private right of action pursuant to an Alaska statute.
February 05, 2025
Reinsurer Wins Dismissal Of $844M Suit To Enforce Consent Judgments

MIAMI — A reinsurer won dismissal with prejudice of a case that sought to enforce approximately $844 million in consent judgments entered against an airline in connection with a 2016 plane crash, with a Florida judge ruling in part that “Florida law narrowly restricts the circumstances in which an insured can ever directly pursue claims against a reinsurer to facts that are not alleged here.”
February 04, 2025
Home Depot Asks 6th Circuit To Rehear No Coverage Ruling In Data Breach Dispute

CINCINNATI — Home Depot filed a petition in the Sixth Circuit U.S. Court of Appeals seeking a panel rehearing of a majority ruling that affirmed an Ohio federal court’s finding that a commercial general liability insurance policy’s electronic data exclusion bars coverage for Home Depot’s losses stemming from a 2014 data breach.
February 04, 2025
Panel: Homeowners Insurer Not Independently Liable For Alleged Dangerous Property

FRANKFORT, Ky. — A Kentucky appeals court panel held that under the terms of a homeowners insurance policy, the insurer is not independently liable for the purportedly dangerous condition of an insured’s property, affirming a lower court’s dismissal of a bad faith lawsuit seeking $300,000 in personal liability coverage for an injury that occurred at the insured property.
February 03, 2025
Excess D&O Insurer Seeks Dismissal Of Law Firm’s Suit Seeking Payment For Invoices

MIAMI — An excess directors and officers liability insurer moved to dismiss 11 of 12 claims in a law firm’s lawsuit seeking payment for the legal representation of its insured, alleging the law firm failed to state a cause of action and the claims are “nothing more than repeated attempts” to have the insurer pay two invoices.
January 31, 2025
Dismissal Of Policy Fraud Counterclaim Denied In Car Crash Breach Of Contract Suit

LAS VEGAS — A Nevada federal judge on Jan. 30 denied a motion to dismiss an insurer’s counterclaim seeking a declaration that a misrepresentation or fraud endorsement applies to prevent further payment under a commercial insurance policy in a breach of contract suit filed against the insurer by a man injured in an auto accident, finding that the counterclaim alleges misrepresentations that were material to the insurer’s valuations as to the man’s purported loss of earnings.
January 31, 2025
Majority Affirms Ruling In Insurers’ Favor In Bad Faith Suit Over Flood Deductible

NEW ORLEANS — A majority of the Fifth Circuit U.S. Court of Appeals held that a lower federal court did not err in determining that the extrinsic evidence resolved an ambiguity in favor of the insurers’ interpretation of a policy flood deductible, affirming the lower court’s summary judgment ruling in favor of the insurers in a general contractor’s bad faith lawsuit arising from flood damage at a hotel renovation.
January 31, 2025
Oklahoma High Court: Prevailing Insureds Don’t Have To Put Loss On Paper

OKLAHOMA CITY — A unanimous Oklahoma Supreme Court says a trial court erred in ruling that insureds whose home suffered storm damage had to submit a written proof of loss to insurer State Farm to seek attorney fees after winning a $750,000 jury verdict.
January 30, 2025
Questions Of Fact Exist As To Whether Home Is Insured’s ‘Residence Premises’

PITTSBURGH — A bad faith claim alleged against a homeowners insurer cannot proceed because the insured failed to show that the insurer did not have a reasonable basis to deny coverage for a fire damage claim; however, the insured’s breach of contract claim can proceed because questions of fact exist as to whether the home that was damaged by the fire was the insured’s “residence premises” as required by the policy, a Pennsylvania federal judge said in partially granting the insurer’s motion for summary judgment.
January 30, 2025
Beneficiary Of Life Insurance Policy Failed To Show Benefit Denial Was Unreasonable

SCRANTON, Pa. — A life insurance beneficiary’s breach of contract claim against a life insurer can proceed because the beneficiary sufficiently alleged that accidental death benefits may be available pursuant to a policy rider; however, the beneficiary’s bad faith claim must be dismissed without prejudice because the beneficiary failed to show that the insurer did not have a reasonable basis to deny coverage, a Pennsylvania federal judge said in partially granting the insurer’s motion to dismiss.
January 29, 2025
Panel Upholds Dismissal Of Hurricane Damage Suit Against Property Insurer

NEW ORLEANS — An insured’s breach of contract and bad faith claims stemming from a dispute over coverage for property damages sustained during a hurricane to 18 rental properties were properly dismissed because the insured failed to provide sufficient facts or details regarding the damages sustained to the properties and the property insurer’s handling of the insured’s claim, the Fifth Circuit U.S. Court of Appeals said.
January 29, 2025
Suit Limitation Provision Bars Homeowner’s Breach Of Contract, Bad Faith Claims

WASHINGTON, D.C. — An insured’s breach of contract and bad faith claims against her homeowners insurer fail because the insured failed to file suit within the policy’s one-year suit limitations provision, a District of Columbia federal judge said in granting the insurer’s motion for summary judgment.