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

Mealey's Insurance Bad Faith

May 31, 2024
Judge Dismisses Coverage Dispute Between Contractor, Insurer After Settlement

LOS ANGELES — A federal judge in California granted a contractor and a commercial general liability insurer’s joint stipulation of dismissal filed after the parties agreed to a settlement, dismissing with prejudice allegations stemming from claims that the contractor failed to secure a building before a hurricane.
May 31, 2024
Bad Faith, Unfair Practices Claims Proceed Against Auto Insurer, Federal Judge Says

RENO, Nev. — A Nevada federal judge denied an auto insurer’s motion for summary judgment on claims alleging unfair claims practices and bad faith because questions of fact exist regarding the insurer’s conduct and handling of the insured’s claim for underinsured motorist (UIM) benefits.
May 31, 2024
Fund Defends Bad Faith, Other Claims Against Dismissal Bid In Reimbursement Case

MONTGOMERY, Ala. — Urging an Alabama federal court to deny dismissal motions in a dispute over reimbursement for workers’ compensation claims, the plaintiff argues in part that a bad faith claim is proper because it “is not an ‘insurer’ under Alabama law and is not a party to a reinsurance contract with Defendants.”
May 30, 2024
11th Circuit Affirms No CGL Coverage Owed For Negligence Suit Against Landscaper

ATLANTA — The 11th Circuit U.S. Court of Appeals affirmed a lower court’s summary judgment ruling in favor of a commercial general liability insurer in a landscaper insured’s breach of contract and bad faith lawsuit seeking coverage for an underlying negligence action, finding that the insurance application expressly disclaims the work the insured did and the bad faith claim fails because the insurer had a lawful basis to deny the claim.
May 30, 2024
Insurers Owe No Coverage For Underlying Judgments In Asbestos Exposure Suits

SAN FRANCISCO — A trial court properly found that two insurers owe no coverage for underlying judgments totaling $41 million entered against their insured in underlying lawsuits arising out of a claimant’s exposure to asbestos in the insured’s products because the policies’ auto exclusions apply as a bar to coverage based on the fact that the claimant was exposed to the asbestos while unloading the insured’s product from the insured’s delivery van, the First District California Court of Appeal said.
May 30, 2024
Insureds’ Summary Judgment Motion In Water Damage Suit Is Premature, Judge Says

AUSTIN, Texas — A Texas federal judge denied a motion for summary judgment filed by insureds who allege that their homeowners insurer breached its contract and acted in bad faith in handling a series of claims related to water and sewer damages in the insureds’ home because the motion is premature as no discovery has taken place and initial disclosures have not been exchanged.
May 30, 2024
Excess Loss Reinsurance Case With ERISA, Bad Faith Claims Closed On Deal Report

PITTSBURGH — After the parties reported that they reached an unspecified “tentative resolution,” a Pennsylvania federal judge administratively closed an Employee Retirement Income Security Act suit over an excess loss reinsurance contract.
May 29, 2024
Bad Faith, Breach Of Contract Suit Stayed Until Appraisal Proceeding Is Completed

HOUSTON — A Texas federal judge granted a motion to compel appraisal and to abate a lawsuit filed by insureds who claim that their homeowners insurer acted in bad faith and breached its contract in denying their claim for storm damages to their home because an appraisal proceeding will resolve the amount of the loss sustained by the insureds regardless of whether the loss was caused by the storm or by an excluded cause of loss.
May 29, 2024
Winemaker Adds Bad Faith Claim In Washington Coverage Suit Over Defective Wine

SEATTLE — A wine producer amended its complaint in a Washington court adding claims against its insurer for breach of the duty of good faith and fair dealing and violations of Washington’s Consumer Protection Act and the Insurance Fair Conduct Act in its lawsuit seeking coverage for the “tragic damage to 320,922 cases of premium Washington wine” that resulted in a loss of more than $8 million.
May 28, 2024
Contractor, Insurer Seek Dismissal Of Coverage Claims After Settlement

LOS ANGELES — A contractor and an insurer filed a joint stipulation of dismissal on May 24, seeking to bring an end to their dispute in a California federal court stemming from the contractor’s alleged failure to properly secure a building under construction in advance of a hurricane after they agreed to a settlement.
May 28, 2024
Questions Of Fact Exist As To Cause Of Damaged Floor, Magistrate Judge Says

MILWAUKEE — A Wisconsin federal magistrate judge denied an insured’s motion for partial summary judgment in a coverage suit stemming from the collapse of the insured’s roof because questions of fact exist regarding the cause of a heaved floor, discovered after the collapse, and whether any of the policy’s exclusions, including those pertaining to earth movement, subsurface water and defects, bar coverage for the damaged floor.
May 24, 2024
Bad Faith Claims Proceed; Fact Issue Exists On Whether Additional Covered Is Owed

LAKE CHARLES, La. — A homeowners insurer is not entitled to partial summary judgment on its insureds’ bad faith claims arising out of a dispute over coverage for hurricane damages because a question of fact exists as to whether additional payments were owed and withheld under the policy by the insurer, a Louisiana federal judge said.
May 24, 2024
Suit Limitation Provision Bars Insureds’ Breach Of Contract, Bad Faith Suit

PHILADELPHIA — Breach of contract and bad faith claims alleged against a homeowners insurer and based on the insurer’s handling of a claim for fire damages cannot proceed because the insureds failed to file suit within one year of the loss as required by the policy’s one-year suit limitation, a Pennsylvania federal judge said May 23 in dismissing the claims without prejudice.
May 24, 2024
California Jury Awards Sisters $18M In Bad Faith Suit Over Flood Damage

SAN BERNARDINO, Calif. — A California jury awarded two sisters $6 million in past noneconomic losses and $12 million in punitive damages after finding that insurers committed breach of contract and acted in bad faith in their handling of the insureds’ property damage claim arising from a 2019 flood.
May 23, 2024
Insured’s Claim For Damages Cannot Succeed Without Breach Of Contract, Judge Says

CHICAGO — An Illinois federal judge granted a commercial liability insurer’s motion for judgment on the pleadings after determining that the insured’s claim for damages under Illinois law based on an alleged unreasonable delay in handling the insured’s claim for underinsured motorist benefits cannot proceed because the insured’s breach of contract claim fails.
May 23, 2024
Failure To Settle Medical Malpractice Claim Was Not Bad Faith, Federal Judge Says

ROCKFORD, Ill. — A bad faith claim brought against a professional liability insurer for failing to settle an underlying medical malpractice claim prior to the entry of jury verdict award that was in excess of the policy limits must be dismissed because the evidence does not support a finding that the insurer acted in bad faith, an Illinois federal judge said in granting the insurer’s motion for summary judgment.
May 23, 2024
Guaranty Association Answers Hurricane Damage Claims, Says Allegations Lack Facts

NEW ORLEANS — The Louisiana Insurance Guaranty Association (LIGA) responded to a homeowner’s petition for damages by stating that the allegations against LIGA are not factual but are legal conclusions regarding the homeowner’s claims that his now-insolvent homeowners insurer, for which LIGA is successor in interest, failed to adequately compensate him for alleged losses related to Hurricane Ida.
May 22, 2024
Parties In Bad Faith Suit Over Water Damage Report Unspecified Settlement

PHOENIX — After an insured, insurer and reinsurer reported an unspecified settlement in a bad faith suit over water damage, an Arizona federal judge ordered that the case be dismissed with prejudice unless the notice of settlement is withdrawn or a stipulation to dismissal is filed by June 17.
May 22, 2024
Insured’s Suit Remanded For Failure To Show Adjuster Was Fraudulently Joined

OAKLAND, Calif. — Remand of an insured’s breach of contract and bad faith suit is warranted because the homeowners insurer and its adjuster failed to meet their burden of showing that the insured’s negligent misrepresentation claim against the adjuster is frivolous, a California federal judge said in granting the insured’s motion to remand.
May 21, 2024
Insured Is Not Entitled To 2 Monthly Disability Payments, Massachusetts Panel Says

BOSTON — A trial court properly found that an insured is not entitled to both total disability benefits and lifetime total disability benefits under a disability income policy because the policy clearly provides that lifetime total disability benefits are not payable until the maximum amount of total disability benefits is paid or until the insured’s 65th birthday, the Massachusetts Appeals Court said May 21 in affirming the trial court’s summary judgment order in favor of the insurer on breach of contract and bad faith claims.
May 21, 2024
Insured Failed To Show Disability Insurer Acted With Reckless Disregard, Judge Says

LOUISVILLE, Ky. — A Kentucky federal judge granted a disability insurer’s motion to dismiss an insured’s claims for violation of the Kentucky Unfair Claims Settlement Practices Act (KUCSPA) and breach of the covenant of good faith and fair dealing because the insured failed to show that the insurer acted with reckless disregard when it determined that the insured was entitled to only residual disability benefits and not total disability benefits.
May 17, 2024
Connecticut Judge Strikes Claims Filed Against Insurer In Mold Damage Suit

VERNON, Conn. — A Connecticut judge granted an insurer’s motion to strike bad faith, unfair trade practices and unjust enrichment claims because an additional insured who seeks coverage for mold and property damages related to the collapse of a hallway floor failed to sufficiently support the claims.
May 17, 2024
Colorado Panel Says Trial Court Properly Applied Case Law In Auto Coverage Suit

DENVER — A trial court properly applied Colorado case law when it denied an auto insurer’s request to contest the liability of its own insured during a default judgment hearing involving an uninsured motorist because the insurer failed to make the required showing that its participation in the hearing was necessary to determine the issue of liability, the Colorado Division 7 Court of Appeals said May 16.
May 17, 2024
Insured Seeks Damages Other Than Attorney Fees For Alleged Bad Faith, Judge Says

SALT LAKE CITY — A Utah federal judge denied an auto insurer’s motion for partial summary judgment on a breach of the implied covenant of good faith and fair dealing claim, rejecting the insurer’s argument that the claim must be dismissed because the insured is seeking only attorney fees as damages.
May 17, 2024
Additional Insured’s Request For Attorney Fees To Proceed In Chemical Coverage Suit

ROCHESTER, N.Y. — An additional insured’s request for attorney fees and costs in a chemical exposure coverage dispute can proceed because the additional insured has alleged sufficient facts in support of its claim for breach of the implied covenant of good faith and fair dealing based on a breach of the insurance contract, a New York federal judge said in denying the insurer’s motion to dismiss and to strike.