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

Mealey's Insurance Bad Faith

January 07, 2025
Insurers Owe Coverage For Environmental Remediation Costs, Insureds Say

LAS CRUCES, N.M. — Coverage is owed for environmental contamination remediation costs related to the release of a waste byproduct from a gas pipeline, insureds say in a breach of contract and bad faith complaint filed in New Mexico federal court against three of its environmental liability insurers.
January 06, 2025
10th Circuit Reverses Verdict In Condo Developer’s Favor, Remands For New Trial

DENVER — The 10th Circuit U.S. Court of Appeals reversed a jury $2.54 million award in favor of a condominium developer and remanded for a new trial after finding that it cannot recover under a builders risk insurance policy for repair costs of a cracked concrete slab that it has not paid and has no obligation to pay.
January 06, 2025
Freddie Mac, Insurer Reach Settlement In Directors And Officers Coverage Dispute

WASHINGTON, D.C. — Federal Home Loan Mortgage Corp. (Freddie Mac) and Certain Underwriters at Lloyd’s of London filed a notice in a District of Columbia federal court indicating that they have settled 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.
January 06, 2025
Homeowners Insurer Did Not Breach Contract, Act In Bad Faith, Judge Says

HOUSTON — A Texas federal judge granted a homeowners insurer’s motion for summary judgment and dismissed the insureds’ breach of contract and bad faith lawsuit after determining that the insureds failed to show that the insurer breached its contract in refusing to pay additional coverage for water damage allegedly sustained to the insureds’ home during a wind and hail storm.
January 06, 2025
Wisconsin Majority: Exception To Construction Defect Exclusion Reinstates Coverage

WAUKESHA, Wis. — A majority of a Wisconsin appeals court reversed a lower court’s grant of summary judgment in favor of a homeowners insurer in its lawsuit challenging coverage for its insureds’ rain damage, finding that the ensuing cause of loss exception to the insurance policy’s Construction Defect Exclusion reinstates coverage and an additional coverage endorsement renders the policy’s Fungi Exclusion inapplicable.
January 03, 2025
Insurer’s Coverage Denial For Roof Damage Was Not Bad Faith, Judge Says

ABERDEEN, Miss. — An insurer is entitled to summary judgment on an insured’s bad faith claim stemming from the denial of coverage for roof damage to the insured’s rental property because the insured failed to present any evidence that the insurer lacked an arguable basis for denying coverage.
January 03, 2025
Motions For Attorney Fee Award Denied; Judge Says No Party Prevailed On Merits

PORTLAND, Ore. — An Oregon federal judge refused to award attorney fees to an insured or to her former attorneys who filed a complaint-in-intervention regarding the enforceability of the attorney-fee contract between the attorneys and the insured because there was no prevailing party as the claims-in-intervention were dismissed based on claim preclusion and not based on the merits of the intervenors’ claims.
January 03, 2025
Lawsuit Filed By 3 Professional Models Against Insurer To Proceed, Judge Says

BRUNSWICK, Ga. — A lawsuit filed by three professional models against the insurer of a club that used the models’ images without consent will proceed against the insurer because the models’ underlying lawsuit against the insured alleged sufficient facts in support of a claim that the misappropriation of the images was negligent, a Georgia federal judge said in finding that the insurer’s knowing violation exclusion does not clearly bar coverage.
January 02, 2025
Third-Party Bad Faith Claim To Proceed Against Auto Insurer, Judge Says

MIAMI — A Florida federal judge denied an insurer’s motion for summary judgment on a third-party bad faith claim after determining that questions of fact exist regarding whether the insurer’s handling of a bodily injury claim constitutes bad faith.
December 30, 2024
5th Circuit Argument Set In Reinsurer’s Appeal Involving Timely Notice

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals has set oral argument for Feb. 5 in a reinsurer’s appeal of a $2,866,423.97 judgment that includes attorney fees; a key issue in the case is whether the reinsurer was given timely notice.
December 19, 2024
Va. Judge Dismisses Contractor’s Counterclaim, Awards Judgment To Excess Insurer

FAIRFAX, Va. — Finding that a second-layer excess insurer did not breach its contract with its construction manager insured when it failed to indemnify the insured for its $24 million contribution to settle construction defects alleged by its client, a Virginia judge dismissed the insured’s counterclaim and entered judgment in favor of the insurer.
December 18, 2024
2 Investors Want To Pursue Resolution With Vesttoo Affiliate In Israel

WILMINGTON, Del. — Two Israeli investors have asked a Delaware federal bankruptcy court for relief from the injunction in the Chapter 11 liquidation of Vesttoo Ltd. and its dozens of affiliates so they can pursue arbitration and/or liquidation proceedings in Israel.
December 16, 2024
Federal Judge Refuses To Dismiss Bad Faith Suit Arising From Roof Damage

SIOUX FALLS, S.D. — A federal judge in South Dakota denied a property insurer’s motion to dismiss insureds’ breach of contract, bad faith and declaratory judgment lawsuit prompted by the insurer’s denial of coverage for damage to the insureds’ roof under the policy exclusion due to faulty construction or design, finding that the court is not convinced the insureds’ alleged loss arose out of the weight of water or ice.
December 16, 2024
5th Circuit: No Coverage For Insured’s Loss Due To Surface Water, Faulty Workmanship

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals affirmed a lower federal court’s summary judgment ruling in favor of a homeowners insurer in an insured’s breach of contract and bad faith lawsuit arising from a pool deck renovation that caused water damage to the insured’s rental property, finding that the undisputed evidence attributes the insured’s loss to surface water and faulty workmanship, which are excluded from coverage.
December 16, 2024
Florida Federal Judge Says Removal Of Bad Faith Suit Was Untimely

TAMPA, Fla. — A Florida federal judge remanded an insured’s bad faith suit to state court after determining that an auto insurer’s removal of the suit was untimely because the insurer failed to remove the suit within one year of its commencement and failed to show that the insured acted in bad faith in preventing the removal of the suit.
December 16, 2024
10th Circuit Panel Says Kansas Statute Bars Third-Party Claimant’s Bad Faith Suit

DENVER — The 10th Circuit U.S. Court of Appeals on Dec. 13 affirmed a district court’s ruling that a third-party claimant lacks standing to bring breach of contract and bad faith claims against an auto insurer, agreeing with the lower court that the claimant’s suit is barred by a Kansas statute that governs claims against a decedent’s estate.
December 13, 2024
Issue Of Fact Exists As To Whether Auto Insurer Acted Unreasonably, Judge Says

SEATTLE — An insured’s extracontractual claims alleged against an auto insurer can proceed because the insured met her burden of showing that a genuine dispute of material fact exists as to whether the insurer acted unreasonably in handling the insured’s claim for underinsured motorist (UIM) benefits.
December 13, 2024
Suit Against Subcontractors’ Insurers Dismissed; No Breach Of Contract Alleged

BOSTON — A Massachusetts federal judge dismissed a claimant’s suit against two insurers of subcontractors who are named as defendants in an underlying negligence suit stemming from the death of a construction worker because there was no breach of any contract or any breach of the implied covenant of good faith and fair dealing by the insurers.
December 13, 2024
3rd Circuit Affirms Dismissal Of Coverage Dispute Arising From Construction Accident

PHILADELPHIA — The Third Circuit U.S. Court of Appeals affirmed a lower federal court’s grant of a commercial general liability insurer’s motion to dismiss a coverage lawsuit arising from a construction accident, agreeing with the lower court that the insurer had no duty to defend a building owner because it was not an “additional insured” under the CGL policy’s additional insured endorsement.
December 12, 2024
Lower Court Properly Found Coverage Is Not Owed For Entire Building, Panel Says

CINCINNATI — The Sixth Circuit U.S. Court of Appeals on Dec. 11 affirmed a district court’s ruling that coverage is only owed for a portion of a wall that collapsed in a building that was undergoing renovation, agreeing with the lower court’s finding that a partial collapse is not the same as a collapse as defined in the policy issued to a building owner and contractor.
December 12, 2024
Breach Of Contract, Bad Faith Claims Will Remain In Federal Court, Judge Says

LOS ANGELES — Breach of contract and bad faith claims against a life insurer will proceed in California federal court because remand to state court is not warranted as complete diversity of citizenship exists, a California federal judge said after determining that the beneficiaries’ negligence claim cannot proceed against the nondiverse life insurer agent who was working in the scope of her employment for the life insurer.
December 12, 2024
Washington Federal Judge Refuses To Enter Summary Judgment On Bad Faith Claim

SEATTLE — An insured condominium association is not entitled to summary judgment on a bad faith claim in a dispute over coverage for hidden water damage, a Washington federal judge said after determining that questions of fact exist on the issue of when the insured discovered the damage.
December 11, 2024
5th Circuit Affirms Ruling In Favor Of Insurer In Dispute Over Hail, Wind Damage

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on Dec. 10 affirmed a Texas federal court’s ruling that an insured’s extracontractual claims against a homeowners insurer cannot proceed because no coverage is owed for hail and wind damage to the insured’s roof based on the insured’s failure to satisfy the policy’s residence premises requirement.
December 09, 2024
Majority Renders $4.5M In Attorney Fees To Insureds In Hurricane Katrina Suit

JACKSON, Miss. — A Mississippi Supreme Court majority affirmed a jury's $10,457,858.89 damages award against an insurer in a Hurricane Katrina coverage dispute and reversed the lower court’s denial of the insured’s estate’s posttrial motion for attorney fees and rendered $4,500,000 in attorney fees to the estate plus postjudgment interest, finding that the court’s decision to force the estate to use nearly half of its award to pay attorney fees fails to adequately compensate them for bringing this bad faith action against the insurer.
December 09, 2024
Alleging Price-Fixing, Doctors Sue MultiPlan, Insurers In Federal Court

CHICAGO — Alleging that they were paid only about 8% of what they billed for out-of-network services because of “a buyers’ cartel dating back to at least 2015,” medical practices that refer to themselves as doctors sued MultiPlan Corp., Aetna Inc., The Cigna Group, UnitedHealth Group Inc., Elevance Health Inc. and other entities in Illinois federal court, asserting numerous claims including some under the Employee Retirement Income Security Act.