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

Mealey's Insurance Bad Faith

January 18, 2024
Bifurcation Of Bad Faith Claims Is Necessary; Stay Of Discovery Not Warranted

MERIDEN, Conn. — Bifurcation of bad faith claims from claims seeking uninsured benefits is necessary to avoid any prejudice to the auto insurer; however, a stay of discovery on the bad faith claims is not warranted, a Connecticut state court judge said in partially granting an auto insurer’s motion to bifurcate and to stay discovery on the bad faith claims.
January 18, 2024
Committee Seeks To Bar Some Claimants In Vesttoo Cases From Liquidation Vote

WILMINGTON, Del. — The Official Committee of Unsecured Creditors on Jan. 17 asked a Delaware federal bankruptcy court to reclassify 49 disputed claims so the joint provisional liquidators (JPLs) that submitted them can’t vote on the committee’s Chapter 11 plan of liquidation for Vesttoo Ltd. and 48 affiliates.
January 17, 2024
Judge: Arbitration Clause, Sovereign Immunity Apply In Crop Insurance Row

GRAND RAPIDS, Mich. — Ruling in part that all claims against a crop insurer must be arbitrated “at least for ‘gateway’ matters” and that the government defendants didn’t waive their sovereign immunity, a Michigan federal judge dismissed a suit over claims that the plaintiffs say have not been adjusted in more than three years.
January 17, 2024
Breach Of Contract, Bad Faith Suit Against Insurer Remanded To State Court

OKLAHOMA CITY — A breach of contract and bad faith suit filed against a homeowners insurer must be remanded to Oklahoma state court because the insurer failed to timely remove the suit within 30 days of learning in a proposed amended complaint that the insureds were seeking more than $75,000 for damages to their home caused by a hailstorm, an Oklahoma federal judge said.
January 17, 2024
Insured’s Bad Faith Claim Cannot Proceed; Insurer Acted Reasonably, Judge Says

SCRANTON, Pa. — A Pennsylvania federal judge granted a homeowners insurer’s motion for partial summary judgment on an insured’s bad faith claim after determining that the insurer acted reasonably in assessing the insured’s roof and mold damages and the insured failed to offer evidence supporting a finding that the insurer acted unreasonably.
January 16, 2024
Insureds Cannot Pursue Consequential Damages On Contract Breach Claim

CEDAR RAPIDS, Iowa — Insureds seeking coverage for mold remediation and property damages caused by a windstorm are not entitled to consequential damages on their breach of contract claim, an Iowa federal judge said Jan. 12 in granting the insurer’s motion for summary judgment.
January 16, 2024
Coverage Owed For Collapse Of Bricks Caused By Hidden Decay, Federal Judge Says

CHATTANOOGA, Tenn. — A Tennessee federal judge determined in a revised opinion that an insurer owes coverage for the collapse of bricks from a wall that occurred during a contractor’s renovations because the collapse was caused by hidden decay, a covered cause of collapse under the policy. However, the judge said questions of fact exist as to whether coverage is owed for the demolition of the remainder of the wall.
January 11, 2024
Unfair Trade Practices Claim Against Disability Insurer Is Not Actionable Claim

ALLENTOWN, Pa. — A insured’s claim for violation of Pennsylvania’s Unfair Trade Practices and Consumer Protection Law (UTPCPL) alleged against a disability insurer must be dismissed because the claim is not actionable under the UTPCPL as it alleges only a refusal to pay a disability insurance claim, a Pennsylvania federal judge said in granting the insurer’s motion to dismiss the claim without prejudice.
January 10, 2024
Reinsurer Tackles Third-Party Beneficiary Theory In Cleanup Costs Coverage Row

PADUCAH, Ky. — Arguing in part that what it calls a newly asserted third-party beneficiary theory fails as a matter of law, a reinsurer filed a reply brief on Jan. 9 urging a Kentucky federal court to grant its summary judgment motion in a dispute over pollution-related cleanup costs.
January 10, 2024
Louisiana Majority Refuses To Review Coverage Suit Over Hurricanes Laura, Delta

NEW ORLEANS — A majority of the Louisiana Supreme Court on Jan. 10 denied an insurer’s petition for a writ of certiorari seeking review of lower court’s rulings following a jury verdict in favor of insureds in a coverage dispute arising from Hurricanes Laura and Delta damage.
January 09, 2024
Alaska Judge Denies Judgment For Insurer In Dispute Over Water Damage Coverage

ANCHORAGE, Alaska — An Alaska federal judge on Jan. 8 denied an insurer’s motion for summary judgment in its suit seeking a declaratory judgment that a homeowners policy does not provide coverage for the insured’s water damage, finding that fact issues remain regarding whether the insured advised the insurer that the second mortgage on his property “was subject to litigation.”
January 09, 2024
Panel Affirms $502,172 Bad Faith Judgment Against Insurer In Hurricane Laura Suit

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals found no reversible error in a jury’s conclusion that an insurer acted in bad faith and underpaid its church insured for property damage that was caused by Hurricane Laura, affirming the trial court’s $502,172.16 award in favor of the insured for damages, penalties and fees.
January 08, 2024
Magistrate: Summary Judgment Not ‘Ideal Vehicle’ For Insurer’s Damages Argument

FORT MYERS, Fla. —A federal magistrate judge in Florida on Jan. 5 denied an insurer’s motion for partial summary judgment in a condominium insured’s bad faith lawsuit seeking coverage for property damage caused by Hurricane Irma, finding that “summary judgment is not the ideal vehicle” for addressing the insurer’s arguments against the insured’s claim for damages.
January 08, 2024
Insured Fails To Support Breach Of Contract, Bad Faith Claims, Federal Judge Says

NEW ORLEANS — A Louisiana federal judge dismissed an insured’s breach of contract and bad faith claims against his homeowners insurer after determining that the insured failed to provide sufficient facts showing that the insurer breached its contract and acted in bad faith in its adjustment of the insured’s claim for damages caused by Hurricane Ida.
January 08, 2024
Breach Of Contract Claim Dismissed; Assignee’s Bad Faith Claim Proceeds, Judge Says

PHILADELPHIA — A breach of contract claim against a homeowners insurer cannot proceed because the assignee of the insureds failed to file suit within one year of the insureds’ loss as required by the policy; however, a bad faith claim against the insurer can proceed because the assignee has standing as an injured plaintiff and as a judgment creditor to pursue the bad faith claim, a Pennsylvania federal judge said in partially granting the insurer’s motion to dismiss.
January 05, 2024
Third-Party Bad Faith Claim Cannot Proceed Against Auto Insurer, Judge Says

TAMPA, Fla. — An auto insurer did not act in bad faith in failing to settle a claim on behalf of its insured, a Florida federal judge said after determining that no reasonable jury could conclude that the insurer acted in bad faith because the evidence shows that it made attempts to settle the claim against its insured.
January 05, 2024
Claimant Appeals Ruling On Standing To Bring Claims Against Auto Insurer

KANSAS CITY, Mo. — A third-party claimant filed a notice of appeal to the 10th Circuit U.S. Court of Appeals, seeking review of a Kansas federal judge’s finding that she lacks standing to bring breach of contract and bad faith claims against an auto insurer under a Kansas statute that governs claims against a decedent’s estate.
January 05, 2024
Florida Panel: Trial Court Erred In Finding Insured’s Bad Faith Claim Cannot Proceed

WEST PALM BEACH, Fla. — A trial court erred in finding that an insured’s bad faith claim could not proceed based on the conclusion that no coverage is owed under the policy because the insured’s bad faith claim is based on the failure to properly and timely investigate the insured’s claim, a violation of Florida insurance law, the Fourth District Florida Court of Appeal said in reversing the trial court’s ruling.
January 04, 2024
Contractor’s Insurer Must Show It Was Prejudiced By Timing Of Claim Tender

SEATTLE — An insurer cannot deny coverage to an insured for a professional negligence claim arising out of additional expenses incurred by the insured on a construction project unless the insurer shows that the insured’s failure to tender the claim until after incurring the expenses caused the insurer to suffer actual and substantial prejudice, a Washington federal judge said in denying the insurer’s motion for summary judgment in a breach of contract and bad faith suit filed by the insured.
January 03, 2024
Federal Judge Denies Insureds’ Request For Immediate Appeal Of Bad Faith Ruling

LOS ANGELES — A California federal judge denied a motion to certify a summary judgment ruling on a bad faith claim to allow the insureds to pursue an immediate appeal of the ruling after determining that judicial economy would not be served by allowing an interlocutory appeal.
January 03, 2024
Insureds’ Claims Fail Based On Failure To Satisfy Policy Condition, Judge Says

CINCINNATI — Breach of contract and bad faith claims alleged against a homeowners insurer in a dispute over coverage for fire damages cannot proceed because the insureds refused to submit to an examination under oath as required by the insurance policy, an Ohio federal judge said Jan. 2 in granting the insurer’s motion for judgment on the pleadings.
January 02, 2024
Committee Gets OK For Vote On Liquidation Plan In Vesttoo Chapter 11 Cases

WILMINGTON, Del. — A Delaware federal bankruptcy judge who is allowing the Official Committee of Unsecured Creditors to put its Chapter 11 plan of liquidation for Vesttoo Ltd. and 48 affiliates to a vote also granted its motions for leave to conduct discovery against two banking organizations.
January 02, 2024
Alleging Unpaid Claims, Iowa-Based Insurers Sue Foreign Reinsurer

DES MOINES, Iowa — Asserting a breach of contract claim and a bad faith claim, two members of the GuideOne family of insurance companies sued a China-based reinsurer for what they allege are its refusals to pay some valid claims for reinsurance reimbursement.
December 22, 2023
Ohio Panel Affirms Judgment For Insurer In Dispute Over Voided Homeowners Policy

CLEVELAND — An Ohio appellate court affirmed a lower court’s grant of summary judgment to an insurer, an insurance agent and his agency in a breach of contract and bad faith suit related to the insurer’s voiding of a homeowners policy and refusing to pay a man’s fire damage claim, finding that there are no remaining issues of material fact and that the claims against the agent and his agency are time-barred under the statute of limitations.
December 19, 2023
Coverage Suit Over Faulty Breaker Installation Dismissed After Parties Settle

SAN DIEGO — A federal judge in California has dismissed with prejudice an insured’s breach of contract and bad faith suit against its insurer arising from the insurer’s refusal to indemnify the insured in an underlying property damage lawsuit stemming from the sale and installation of defective circuit breakers, granting the parties’ jointly filed motion for dismissal.