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

Mealey's Insurance Bad Faith

September 18, 2024
Magistrate Partly Grants Motion To Quash Discovery On Reinsurance, Reserves

LAKE CHARLES, La. — Partly granting an insurer’s motion to quash in a breach of contract and bad faith suit over home damage purportedly caused by hurricanes, a Louisiana federal magistrate judge cited two other decisions in ruling that that certain reinsurance and reserve information and the requested prior deposition testimony are within the scope of permissible discovery.
September 17, 2024
Parties Dismiss Appeal Following Settlement Of Environmental Coverage Suit

SOUTH BEND, Ind. — An insured and its insurers filed a stipulation of voluntary dismissal of all appeals and cross-appeals in the Seventh Circuit U.S. Court of Appeals on Sept. 16 following the settlement of the insured’s suit seeking coverage for the cleanup of polychlorinated biphenyls (PCBs).
September 17, 2024
Insured Says District Court Erred In Interpreting Radioactive Materials Exclusion

CHICAGO — A district court erred in finding that no coverage is owed by insurers pursuant to the policies’ radioactive materials exclusion for an underlying suit seeking damages for bodily injuries caused by exposure to electromagnetic (EMF) radiation from the insured’s electric transformers because a reasonable insured would interpret the exclusion as providing coverage for the EMF exposure claims, the insured maintains in an appellant brief filed in the Seventh Circuit U.S. Court of Appeals.
September 16, 2024
Panel Majority Reverses Ruling On Vexatious Litigation Claims Against Auto Insurer

HARTFORD, Conn. — The majority of the Connecticut Appellate Court partially reversed a trial court’s ruling in favor of an auto insurer after determining that the insured properly asserted claims for common-law and statutory vexatious litigation against the insurer based on the insured’s allegations that the insurer allegedly provided false answers to the insured’s complaint in a prior action.
September 16, 2024
Drug, Narcotics Exclusions Bar Claims Under Accidental Death Policy, Panel Says

DENVER — A district court properly dismissed a breach of contract and bad faith suit filed by the beneficiaries of accidental death insurance policies because the policies’ drug and narcotics exclusions bar coverage for the insured’s death, caused by taking a combination of hydrocodone and mitragynine, the 10th Circuit U.S. Court of Appeals said.
September 16, 2024
Claims Against Auto Insurer Fail; No Coverage Owed Under Policy, Judge Says

LAS VEGAS — An insured’s claims for breach of contract, bad faith and violation of Nevada law cannot proceed because the insurer met its burden of showing that the insured is not entitled to uninsured motorist (UM) benefits under the auto policy, a Nevada federal judge said in granting the auto insurer’s motion for summary judgment.
September 13, 2024
Insured’s Bad Faith Counterclaim Cannot Proceed, Alaska Federal Judge Says

ANCHORAGE, Alaska — A bad faith counterclaim filed against an auto insurer cannot proceed because the insurer’s filing of a declaratory judgment suit regarding its coverage obligations to its insured who was involved in an auto accident while working for a rideshare service company does not constitute bad faith as there was uncertainty regarding whether coverage is afforded under the policy, an Alaska federal judge said.
September 13, 2024
Trial Court Properly Found Insured’s Complaint Against Auto Insurer Cannot Proceed

MADISON, Wis. — The Second District Wisconsin Court of Appeals affirmed a trial court’s summary judgment ruling in favor of an auto insurer on the insured’s breach of contract and bad faith claims because the trial court properly found that the insured’s complaint fails to allege the existence of a contract and fails to show that the auto insurer’s settlement of a suit filed against the insured was not reasonable.
September 13, 2024
Settlement Reached Between Insurer, Insureds In Water Damage Coverage Suit

CHEYENNE, Wyo. — A homeowners insurer and its insureds notified the U.S. District Court for the District of Wyoming that a settlement of the insureds’ breach of contract and bad faith suit stemming from a clam for water damages has been reached.
September 12, 2024
Auto Insurer Must Produce Documents Created Prior To Counteroffer, Judge Says

BURLINGTON, Vt. — An auto insurer is required to produce documents that were requested by insureds in a breach of contract and bad faith suit because the documents were produced prior to the date on which the insurer believed litigation was likely, a Vermont federal judge said in partly granting and partly denying a motion to compel, noting that the insurer may have believed that litigation was likely when it made a counteroffer to the insureds on their claim for underinsured motorist benefits.
September 12, 2024
Insureds’ Suit Against Homeowners Insurer Remanded; Damages Do Not Exceed $75K

GREENVILLE, S.C. — A South Carolina federal judge remanded a breach of contract and bad faith lawsuit filed against a homeowners insurer because it is not apparent from the face of the insureds’ complaint that the amount in controversy exceeds the minimum federal jurisdictional amount of $75,000 and because the insureds filed a stipulation stating that the damages will not exceed $75,000.
September 11, 2024
Judge Denies Service-Focused Dismissal Motion In Reinsurance Dispute

DES MOINES, Iowa — Citing a 1998 U.S. Supreme Court decision, an Iowa federal judge denied a service-focused motion to dismiss a dispute over reinsurance reimbursement, ruling that the plaintiffs “have made the necessary prima facie showing of service upon . . . the Defendants’ appointed agent.”
September 11, 2024
2nd Circuit Affirms Finding That Claims Against Long-Term Care Insurer Are Barred

NEW YORK — The Second Circuit U.S. Court of Appeals affirmed a district court’s dismissal of an insured’s breach of contract and bad faith suit arising out of the denial of home health care aide services under a long-term care insurance policy because the insured forfeited any argument that his claims against the insurer are not barred by the applicable statute of limitations.
September 10, 2024
Question Of Fact Exists On Whether Additional Coverage For Water Damage Is Owed

NEWARK, N.J. — A New Jersey federal judge on Sept. 9 granted a homeowners insurer’s motion for summary judgment on an insured’s bad faith claim because a question of fact exists as to whether the insured is entitled to additional coverage under the policy for water damage in his home.
September 10, 2024
Panel Refuses To Reconsider Ruling In Insurer’s Favor In Suit Prompted By Pandemic

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals refused to reconsider its ruling that affirmed a federal court’s grant of summary judgment in favor of an insured in its breach of contract and bad faith lawsuit arising from the COVID-19 pandemic.
September 09, 2024
8th Circuit Affirms Ruling In Insurer’s Favor In Bad Faith Suit Arising From Derecho

ST. LOUIS — The Eighth Circuit U.S. Court of Appeals on Sept. 6 affirmed a lower federal court’s summary judgment ruling in favor of an insurer in Iowa insureds’ breach of contract and bad faith lawsuit arising from their property damage caused by a derecho, rejecting the insurers’ contention that the lower court lacked subject matter jurisdiction and finding that the insurer did not breach the contract when it refused to pay the insureds the remaining replacement cost value.
September 05, 2024
Panel Reverses Ruling In Professional Liability Insurer’s Favor On Bad Faith Claim

DENVER — The 10th Circuit U.S. Court of Appeals on Sept. 4 reversed a lower federal court’s summary judgment ruling in favor of a professional liability insurer on a claim for bad faith in a coverage dispute arising from a medical malpractice lawsuit, finding that the lower court erred in concluding that the bad faith claim was time-barred.
September 05, 2024
Breach Of Contract, Bad Faith Suit Against Disability Insurer Remanded

MILWAUKEE — A Wisconsin federal magistrate judge remanded an insured’s breach of contract and bad faith suit against a disability insurer and an independent insurance agent after determining that the agent was not fraudulently joined as a defendant to defeat the diversity of citizenship requirement because the insured’s negligent misrepresentation claim against the agent alleges sufficient facts in support of the claim.
September 05, 2024
Reinsurer Files Suit Over TPA’s Alleged Mishandling Of Insurance Claims

BILLINGS, Mont. — Seeking declaratory judgment and damages for claims that it alleges were mishandled and misallocated, a Bermuda-based reinsurer sued an insurer and third-party administrator (TPA) in Montana federal court.
September 03, 2024
No Reasonable Juror Could Find Water Damage Was Sudden, Accidental, Panel Says

SAN FRANCISCO — The First District California Court of Appeal affirmed a trial court’s judgment in favor of a homeowners insurer after determining that the trial court did not err in instructing the jury regarding the cause of the loss because no reasonable jury could have found that the cause of a burst water pipe was sudden and accidental and, therefore, covered under the policy.
September 03, 2024
Discovery Issues Derail Summary Judgment Bid In Cleanup Costs Coverage Row

PADUCAH, Ky. — After a report of discovery issues prompted denial of a summary judgment motion without prejudice in a dispute over pollution-related cleanup costs, a Kentucky federal magistrate judge has set new discovery deadlines and given the plaintiff leave to move to compel production.
August 30, 2024
Disability Insurer’s Alleged Conduct Does Not Support Request For Punitive Damages

RIVERSIDE, Calif. — An insured’s request for punitive damages against a disability insurer must be dismissed because the insured’s complaint does not allege conduct that supports punitive damages, a California federal judge said in granting the insurer’s motion to dismiss the request without prejudice.
August 29, 2024
Breach Of Contract, Bad Faith Suit Against Rental Car Insurer Dismissed

LAS VEGAS — A Nevada federal judge dismissed a breach of contract and bad faith suit filed against the auto insurer of a rental company because the assignees of the rental car driver failed to show that the rental car driver was an insured under the rental car company’s insurance policy.
August 29, 2024
Third-Party Bad Faith Claim Will Proceed Under Kentucky Law, Judge Says

FRANKFORT, Ky. — After establishing that Kentucky law applies to a dispute over an auto accident claim, a Kentucky federal judge determined that a third-party bad faith claim brought against the tortfeasor’s insurer can proceed because the third party alleged sufficient facts in support of the bad faith claim.
August 29, 2024
Sexual Misconduct Exclusion Ambiguous, Nevada Federal Judge Determines

LAS VEGAS — An insured’s assignee, who is seeking to satisfy a $20 million judgment entered against the insured, is entitled to summary judgment on a breach of contract claim because the policy’s sexual misconduct exclusion is ambiguous and must be construed in favor of coverage, a Nevada federal judge said in granting the assignee’s motion.