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

Mealey's Insurance Bad Faith

July 11, 2024
Bad Faith Claims Barred By Homeowners Policy’s Suit Limitation Provision

LAKE CHARLES, La. — Bad faith claims alleged against a homeowners insurer by insureds in a coverage dispute over property damages caused by Hurricanes Laura and Delta must be dismissed because the insureds failed to file their suit within two years as required by the policy’s suit limitation provision, a Louisiana federal judge said in granting the insurer’s motion to dismiss.
July 10, 2024
Bad Faith Claim Against Insurer In Water Damage Suit Dismissed Without Prejudice

PHILADELPHIA — A Pennsylvania federal judge on July 9 dismissed an insured’s bad faith claim without prejudice after determining that the insured failed to allege the basis for the insurer’s denial of a claim for water damage and failed to provide sufficient facts to support a finding that the insurer’s handling of the claim was in bad faith.
July 10, 2024
Louisiana Majority Reverses Coverage Ruling In Suit Over Damaged Farm Equipment

SHREVEPORT, La. — A majority of a Louisiana appeals court reversed a lower court’s ruling that an insurance policy provided coverage for damaged farm irrigation equipment but affirmed the lower court’s ruling in favor of the insurer on the insured’s claims for detrimental reliance and bad faith penalties.
July 09, 2024
Panel Affirms District Court’s Bad Faith Ruling, Judgment In Water Damage Suit

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeal affirmed a district court’s $125,000 judgment in favor of an insured in a water damage dispute after determining that the lower court did not abuse its discretion in denying the insured’s request for appraisal or in entering partial summary judgment on the insured’s bad faith claim because there is no evidence that the parties agreed to arbitrate the dispute and no evidence that the insurer acted in bad faith in handling the insured’s claim.
July 09, 2024
Judge: Insureds Failed To Show Their Damage Was Not Caused By Defect, Deterioration

LOS ANGELES — A federal judge in California held that damages to insureds’ property “were caused by a defect, weakness, inadequacy, fault, or unsoundness in design, repair, construction, or materials — which in turn caused wear, tear, . . . deterioration, and wet or dry rot” and that, as a result, their loss is excluded from coverage under their homeowners insurance policy.
July 03, 2024
Constructive Trust Claims Deadline Set In Liquidation Of Vesttoo And Affiliates

WILMINGTON, Del. — In the Chapter 11 liquidation of Vesttoo Ltd. and its dozens of affiliates, a Delaware federal bankruptcy judge set a July 22 deadline for asserting constructive trust claims and overruled the liquidating trustee’s objection regarding compensation for special counsel retained by the debtors.
July 02, 2024
Appeal Over Confirmation Of Vesttoo’s Liquidation Is Voluntarily Dismissed

WILMINGTON, Del. — An appeal of the order confirming the Chapter 11 plan of liquidation for Vesttoo Ltd. and its dozens of affiliates has been voluntarily dismissed pursuant to a joint stipulation.
June 28, 2024
Beneficiary’s Claims Fail Based On Proper Rescission Of Policy, Judge Says

SACRAMENTO, Calif. — A beneficiary’s breach of contract and bad faith claims cannot proceed against a life insurer because the beneficiary’s wife made a material misrepresentation on the policy application that justified the insurer’s rescission of the policy, a California federal judge said in granting the insurer’s motion for summary judgment.
June 27, 2024
Insured’s Appeal In Bad Faith Suit Dismissed For Lack Of Jurisdiction

KANSAS CITY, Mo. — An insured’s appeal arising out of a trial court’s ruling that noneconomic damages are not available under a bad faith failure-to-settle claim alleged against an auto insurer must be dismissed for lack of jurisdiction because the trial court’s ruling was not a final judgment, the Western District Missouri Court of Appeals said in dismissing the insured’s appeal.
June 27, 2024
Bifurcation Of Breach Of Contract, Bad Faith Claims Not Warranted, Judge Says

DAYTON, Ohio — Bifurcation of an insured’s breach of contract claim from the insured’s bad faith claim in a dispute over coverage for damages caused by a windstorm is not warranted because the homeowners insurer failed to meet its burden of showing that it would be prejudiced if both claims are tried together, an Ohio federal judge said in denying the insurer’s motion to bifurcate.
June 27, 2024
Breach Of Contract, Bad Faith Claims Based On Hurricane Delta Summarily Dismissed

MONROE, La. — A Louisiana federal judge summarily dismissed an insured’s claims for breach of contract and bad faith as those claims applied to coverage for damages by Hurricane Delta because the insured’s heir, who was substituted as the plaintiff following the insured’s death, testified that Hurricane Delta did not damage the insured’s home.
June 27, 2024
4th Circuit Says Breach Of Contract, Bad Faith Claims Against Auto Insurer Fail

RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals affirmed a district court’s dismissal of breach of contract and bad faith claims alleged against an auto insurer, agreeing with the lower court’s determination that the claims cannot survive because the insured did not obtain a judgment against the tortfeasor before settling her claim with the tortfeasor, as required under Virginia law, and because the insured failed to allege any facts that would support a bad faith claim under Virginia law.
June 27, 2024
Insureds’ Claim For Breach Of Covenant Of Good Faith, Fair Dealing Can Proceed

LAS VEGAS — A Nevada federal judge denied an auto insurer’s motion to dismiss a breach of the covenant of good faith and fair dealing claim because the insureds allege more than just a failure to comply with their demand for uninsured motorist (UM) benefits; however, the judge said the insureds’ bad faith claim brought under the Nevada Unfair Claims Practices Act (UCPA) cannot proceed because it is not clear how the insurer failed to timely acknowledge the insureds’ claim.
June 26, 2024
Panel Affirms Ruling In Insurer’s Favor As To Bad Faith Claim In Hailstorm Suit

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on June 25 held that a lower federal court correctly determined that under Texas Supreme Court precedent, an insurer is entitled to summary judgment on insureds’ bad faith and statutory damages claims in a hailstorm coverage dispute.
June 26, 2024
Special Discovery Master Does In Camera Review In Indemnification Case

TRENTON, N.J. — Following in camera review in New Jersey federal court in a dispute between insurers and reinsurers over indemnification for asbestos bodily injury claims, a special discovery master directed insurers to produce all or part of roughly two-thirds of the sample documents he considered.
June 25, 2024
Supermarket Sues Insurer For Bad Faith In Suit Arising From Parking Lot Shooting

ALLEGHENY, Pa. — Giant Eagle Inc. sued an insurer for bad faith, unjust enrichment and equitable contribution/indemnification seeking to recoup the more than $450,000 that it has incurred in defending against a lawsuit alleging that a police officer who was working as an off-duty security guard unlawfully shot a man in a Giant Eagle supermarket parking lot.
June 25, 2024
Policy Exclusions Do Not Bar Coverage For Decomposing Body, Ohio Judge Says

CANTON, Ohio — An Ohio judge found that coverage is owed for damages to a rental property caused by a decomposing human body because the policies’ pollution exclusion, virus exclusion and infestation exclusion do not clearly bar coverage for the insureds’ property damage claim.
June 24, 2024
District Court’s Collapse Ruling Must Be Reversed, Contractor Tells 6th Circuit

CINCINNATI — A federal judge erred in finding that no coverage is owed for a structurally unsound wall that remained standing after a portion of the wall collapsed during a building renovation because the lower court failed to apply Tennessee law in construing the meaning of the term collapse in the insurer’s policy, a building contractor says in its June 21 appellant brief filed in the Sixth Circuit U.S. Court of Appeals.
June 24, 2024
Water Exclusion Bars Coverage For Water Damages In Insureds’ Basement, Panel Says

NEW ORLEANS — A federal district court properly entered summary judgment in favor of a homeowners insurer on breach of contract and bad faith claims because coverage for water damages to the insureds’ basement is excluded pursuant to a water exclusion in the homeowners’ policy, the Fifth Circuit U.S. Court of Appeals said.
June 21, 2024
Panel Reverses Ruling In Insurer’s Favor In Bad Faith Suit Over Hurricane Damage

WEST PALM BEACH, Fla. — A Florida appeals panel on June 20 held that an insurer waived its right to contest the validity of an insured’s Civil Remedy Notice of Insurer Violations (CRN) in the insured’s bad faith lawsuit arising from her hurricane water damage claim, reversing a lower court’s judgment in favor of the insurer and remanding.
June 21, 2024
Louisiana Panel Affirms Default Judgment, Bad Faith Penalty Award Against Insurer

LAKE CHARLES, La. — A trial court did not err in awarding insureds bad faith damages and attorney fees as part of a default judgment against a homeowners insurer in a coverage dispute over hurricane damages because the homeowners insurer failed to make payment within 30 days of receiving satisfactory proof of loss, a panel of the Third Circuit Louisiana Court of Appeal said June 20.
June 21, 2024
Extracontractual Claims Alleged Against Auto Insurer Cannot Proceed, Judge Says

SEATTLE — Extracontractual claims alleged against an auto insurer cannot proceed because the insureds failed to show that the insurer acted unreasonably or in bad faith in handling one of the insureds’ claims, a Washington federal judge said June 20 in granting the auto insurer’s motion for partial summary judgment.
June 19, 2024
Court Dismisses Coverage Suit Over Baltimore Sun Shooting Per Parties’ Stipulation

CHICAGO — One day after the parties filed a stipulation of dismissal, a federal Illinois court dismissed with prejudice a lawsuit brought by Tribune Publishing Co. LLC and The Baltimore Sun Co. LLC seeking coverage for underlying wrongful death and negligence lawsuits arising from a 2018 shooting in which five newspaper employees were killed.
June 18, 2024
Insured Building Owner Says Lower Court Misinterpreted Policy’s Collapse Language

CINCINNATI — The Sixth Circuit U.S. Court of Appeal must reverse a district court’s ruling entered in favor of an insurer because the lower court failed to properly interpret and apply the language of the policy regarding the coverage afforded for the collapse of a wall, an insured building owner says in its June 17 appellant brief.
June 17, 2024
Insurers’ Motion To Compel Arbitration Should Have Been Granted, 5th Circuit Says

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on June 14 reversed and remanded a lower federal court’s ruling that denied insurers’ motion to compel arbitration in insureds’ breach of contract and bad faith lawsuit seeking damages for commercial property damage caused by hurricanes Laura and Delta, finding that the Convention on the Recognition and Enforcement of Foreign Arbitral Awards applies despite the insureds’ dismissal of their claims against foreign insurers.