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

Mealey's Insurance Bad Faith

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.
June 13, 2024
Dismissal Of Bad Faith Claim Denied In Estate Row With Insurer Over ‘Total Loss’

SCRANTON, Pa. — A Pennsylvania federal judge on June 12 denied a homeowners insurer’s motion to dismiss a bad faith claim in a suit filed against it by the estate of a woman alleging that the insurer’s failure to pay a claim for water damage resulted in the property being “a total loss,” finding dismissal inappropriate at this point in the litigation.
June 13, 2024
Failure To Timely Submit Proof-Of-Loss Forms Is Fatal To Insured’s Bad Faith Suit

WHITE PLAINS, N.Y. — A New York federal judge granted a homeowners insurer’s motion for summary judgment after determining that the insured’s breach of contract and bad faith suit cannot proceed because the insured failed to submit proof-of-loss statements regarding the water damage in his home within 60 days as required by the policy.
June 13, 2024
Insurers’ Motion For Summary Judgment Denied In Row Over Jet Insurance Coverage

SAN DIEGO — A California federal judge denied summary judgment to insurers in their suit seeking rescission of a policy covering a private jet but granted in part the jet owners’ motion for partial summary judgment regarding their reliance “on a misrepresentation theory,” finding that the insurers failed to show that the insureds made misrepresentations about the identity of the jet’s pilots.
June 13, 2024
Judge Sustains Insurer’s Demurrer As To Bad Faith Claim In Suit Over Netflix Show

LOS ANGELES — A California judge sustained an insurer’s demurrer without leave to amend as to a breach of the implied covenant of good faith and fair dealing brought by the producers of the Netflix show “House of Cards” and overruled the insurer’s remaining demurrers in a coverage dispute arising from the insureds’ claims that the revised final season of House of Cards was not as successful as was anticipated before Kevin Spacey's departure from the show.
June 13, 2024
Auto Insurer’s Motion To Dismiss Breach Of Contract, Bad Faith Claims Granted

LAS VEGAS — A Nevada federal judge granted an auto insurer’s motion to dismiss an insured’s claims alleging bad faith and unfair claims practices because the insured failed to allege sufficient facts showing that the insurer’s handling of the claim was unreasonable; however, the judge said the insured will be provided one last opportunity to amend the complaint.
June 13, 2024
Third-Party Claimant Is Entitled To Depose Insurer’s Attorney In Bad Faith Suit

TAMPA, Fla. — A Florida federal magistrate judge determined that a third-party claimant who alleges that an auto insurer acted in bad faith by failing to settle a claim against its insured is entitled to depose an attorney from the firm that represents the insurer because the financial relationship between the insurer and the law firm is relevant based on the insurer’s advice-of-counsel defense.
June 13, 2024
Insureds Failed To Show Auto Insurer Acted In Bad Faith In Handling Claim

PHILADELPHIA — A bad faith claim alleged against an auto insurer cannot proceed because the insureds failed to show that the dispute over the insureds’ claim for uninsured motorist benefits is anything more than a dispute over the value of the claim, a Pennsylvania federal judge said in granting the insurer’s motion to dismiss the bad faith claim.
June 13, 2024
Insurer’s Refusal To Pay All Medical Bills Was Not Breach Of Contract, Panel Says

ATLANTA — A district court did not err in dismissing breach of contract and bad faith claims against an auto insurer based on the insurer’s failure to pay all of the insured’s medical expenses incurred after an auto accident because the policy clearly states that the insurer will pay only for medical expenses deemed necessary and reasonable, the 11th Circuit U.S. Court of Appeals said in affirming the district court’s dismissal of the insured’s amended complaint.
June 12, 2024
Texas Federal Magistrate Judge Severs Bad Faith Claim In Auto Coverage Dispute

AUSTIN, Texas — A Texas federal magistrate judge granted an auto insurer’s motion to sever a bad faith claim from a claim for underinsured motorist (UIM) benefits, agreeing with the insurer that severing contractual claims from extracontractual claims is the preferred approach under Texas law.