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

Mealey's Insurance Bad Faith

October 22, 2024
Contamination Exclusion Bars Coverage For COVID-19 Losses, Federal Judge Says

SACRAMENTO, Calif. — An all-risk policy’s contamination exclusion bars coverage for losses sustained during the COVID-19 pandemic because a California appellate panel’s determination that a contamination exclusion bars coverage for COVID-19 losses is binding and warrants the same finding in a similar suit filed by insureds in federal court, a California federal judge said Oct. 21 in granting an insurer’s motion for summary judgment.
October 22, 2024
Motion To Substitute Guaranty Association Denied In Row Over Hurricane Coverage

LAFAYETTE, La. — A Louisiana federal magistrate judge denied an insured’s motion to substitute the Louisiana Insurance Guaranty Association (LIGA) for a now-insolvent insurer in a dispute over coverage for purported damages caused by Hurricanes Laura and Delta, finding that even if the court determined that it had subject matter jurisdiction over LIGA through a transfer of interest from the insurer to LIGA, the state of Louisiana’s interest in regulating insurance provides a sufficient reason for abstention.
October 21, 2024
Colorado Federal Judge Refuses To Reconsider Ruling On Water Exclusion, Exception

DENVER — A Colorado federal judge denied a homeowners insurer’s motion for reconsideration, refusing to reconsider whether an underground cistern is part of a home’s plumbing system and covered under the policy’s exception to the water exclusion because the insurer failed to raise the issue in response to the insureds’ motion for partial summary judgment.
October 21, 2024
Insured’s Bad Faith Claim, UM Benefits Claim Properly Dismissed, Panel Says

ST. PAUL, Minn. — The Minnesota Court of Appeals affirmed a trial court’s dismissal of an insured’s claim seeking coverage for uninsured motorist (UM) benefits and the insured’s claim alleging breach of the duty of good faith and fair dealing, agreeing with the lower court that the complaint fails to provide sufficient facts in support of either claim.
October 18, 2024
Panel Partly Reverses Ruling In Coverage Suit Arising From Hurricanes Laura, Delta

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on Oct. 17 reversed a lower federal court’s imposition of statutory penalties, attorney fees and costs in favor of a church insured in its lawsuit alleging that the insurer underpaid its losses arising from Hurricanes Laura and Delta, finding that the lower court erred when it determined that the insurer’s conduct was arbitrary and capricious and without probable cause.
October 17, 2024
Third Party Failed To Obtain Judgment Against Insured As Required By Ohio Law

AKRON, Ohio — A trial court properly dismissed a third-party claimant’s lawsuit against an auto insurer because the claimant failed to obtain a judgment against the insured tortfeasor as required under Ohio law before filing a direct action against the insurer, the Ninth District Ohio Court of Appeals said.
October 15, 2024
Panel: No Professional Liability Coverage Owed For Gender Discrimination Claim

ST. PAUL, Minn. — The Minnesota Court of Appeals on Oct. 14 affirmed a lower court’s summary judgment ruling in favor of a medical professional liability insurer in a plastic surgeon insured’s breach of contract and bad faith lawsuit seeking coverage for a transgender woman’s claims that he discriminated against her based on her sexual orientation when he refused to perform breast augmentation surgery, finding that no coverage was triggered because it is clear that the underlying claims were based on an alleged gender-identity discrimination and not on a medical incident.
October 14, 2024
Judgment Granted For Vehicle Insurer In Fraud Suit Over Driver Misrepresentation

RIVERSIDE, Calif. — A California federal judge granted summary judgment to a motor carrier insurer in its suit seeking a determination that it is entitled to rescind its insured’s policy due to the insured’s material misrepresentation in his policy application where he omitted listing as a driver his employee who was killed in a motor vehicle accident while driving one of the insured’s vehicles.
October 14, 2024
Suit Against Captive Reinsurer, Others Follows Alleged Board Upheaval

WASHINGTON, D.C. — Alleging in part that board upheaval left a captive reinsurer “under the management of inexperienced board members,” a risk retention group (RRG) sued three entities it claims it long had a close relationship with, asserting claims in a District of Columbia federal court for breach of contract, breach of the covenant of good faith and fair dealing and tortious interference with business relations.
October 14, 2024
Freddie Mac Settles With 2nd Insurer In D&O Coverage Suit Over SEC Subpoena

WASHINGTON, D.C. — Federal Home Loan Mortgage Corp. (Freddie Mac) and a second insurer told a Washington federal court that they have reached a settlement in Freddie Mac’s breach of contract and bad faith lawsuit seeking directors and officers liability coverage for underlying expenses it incurred on behalf of its directors, officers and employees who were subpoenaed by the Securities and Exchange Commission during an investigation and subsequent lawsuit.
October 14, 2024
Questions Of Fact Exist As To Whether Auto Insurer Acted In Bad Faith, Judge Says

JACKSONVILLE, Fla. — A bad faith claim alleged against an auto insurer by a third-party claimant can proceed because questions of fact exist as to whether the insurer acted in the best interests of its insured to avoid a judgment that exceeded the policy limit being entered against its insured, a Florida federal judge said Oct. 11 in denying the insurer’s motion for summary judgment.
October 14, 2024
Questions Of Fact Exist On Breach Of Contract, Bad Faith Claims In Disability Suit

PHILADELPHIA — A Pennsylvania federal judge on Oct. 11 denied a disability insurer’s motion for summary judgment on an insured’s breach of contract and bad faith claims after determining that questions of fact exist as to whether the insured remained disabled from performing the duties of his own occupation and whether the insurer acted in bad faith in handling the insured’s claim.
October 14, 2024
S.C. Federal Judge Says No Coverage Owed To Insured For Failure To Disclose

GREENVILLE, S.C. — A federal judge in South Carolina has granted a homeowners insurer’s motion for judgment after determining that it had no duty to defend and indemnify a policyholder sued for failing to disclose water intrusion issues during the sale of his townhome because the policy does not provide coverage for the insured’s alleged failure to disclose information during the sale of the property.
October 14, 2024
Owners Of Aircraft Valued At More Than $222M Sue Insurers In State Court

STAMFORD, Conn. — Claiming breach of contract and bad faith, five entities that own two freighter planes that they allege a Russian cargo airline has refused to return after the invasion of Ukraine have filed a suit in Connecticut state court against more than two dozen “insurers, underwriters, underwriting managers, and insurance subscribers of coverage in the international aviation insurance market.”
October 14, 2024
Washington Federal Judge Cites Questions Of Fact On Bad Faith Claims In Auto Suit

SEATTLE — A federal judge in Washington partially denied an auto insurer’s motion for summary judgment on an insured’s claims of bad faith, violations of insurance acts and negligent claims handling after determining that questions of fact exist.
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.