Mealey's Insurance Bad Faith
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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.”
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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August 29, 2024
Suit Limitation Provision Bars Insured’s Hurricane Harvey Coverage Suit
CORPUS CHRISTI, Texas — A trial court did not err in granting a homeowners insurer’s motion for summary judgment in a coverage dispute over Hurricane Harvey damages because the policy’s two-year suit limitation provision clearly bars the insured’s suit, the 13th District Texas Court of Appeals said Aug. 28.
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August 29, 2024
Subcontractor Must Supplement Responses; Insurer’s Motion To Bifurcate Granted
LOUISVILLE, Ky. — A Kentucky federal judge ordered a subcontractor to supplement a number of its responses to an insurer’s requests for admissions and bifurcated the insureds’ bad faith claims from the insurer’s coverage claim in a suit filed by an insurer against its insured contractor and subcontractor because bifurcation would avoid any potential prejudice to the insurer by a jury.
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August 28, 2024
Woman Sues Long-Term Care Insurer On Breach Of Contract, Bad Faith Theories
OKLAHOMA CITY — A long-term care (LTC) insurer “intentionally, by design, conducted an inadequate investigation in order to avoid the facts that would further substantiate coverage,” a woman with cognitive impairment whose benefits were terminated claims in a complaint filed in a federal court to recover LTC benefits on breach of contract and bad faith theories.
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August 28, 2024
Suit Against Auto Insurer Remanded For Lack Of Diversity Of Citizenship
OKLAHOMA CITY — An Oklahoma federal judge remanded an insured’s breach of contract and bad faith suit against an auto insurer after determining that complete diversity of citizenship does not exist because a conversion claim alleged against the mother of a minor who allegedly stole the insured’s car can proceed.
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August 28, 2024
Insureds Failed To Comply With Policy; Bad Faith, Breach Of Contract Claims Fail
HOUSTON — A Texas federal judge granted a property insurer’s motion for summary judgment on breach of contract and bad faith claims because the insureds failed to comply with their duty to cooperate under the policy when they disposed of personal property before the insurer was able to inspect the damaged property.
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August 27, 2024
Breach Of Contract, Bad Faith Claims To Proceed Against Auto Insurer
SCRANTON, Pa. — Breach of contract and bad faith claims will proceed against an auto insurer in a dispute over the insurer’s right to reimbursement for personal injury protection (PIP) benefits because the damages sought by the claimant are more than the amount of PIP benefits that were eventually paid to the claimant, a Pennsylvania federal judge said in denying the insurer’s motion to dismiss.
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August 27, 2024
Only Direct Claim Survives Dismissal Bids In Lawsuit Over Asbestos Judgment
NEW YORK — Saying that amending those claims would be futile, a New York federal judge granted dismissal of bad faith, negligence and tortious interference claims against an insurer and a third-party claims administrator in a suit over a multimillion-dollar asbestos exposure judgment.
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August 26, 2024
Insurer Failed To Show Water Leak Did Not Cause Asbestos Contamination, Judge Says
SEATTLE — A Washington federal judge denied an insurer’s motion for summary judgment in a dispute over coverage for asbestos contamination that was discovered after a water leak in an insured cabin because the insurer failed to show that the water leak was not the efficient proximate cause of the asbestos contamination.
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August 26, 2024
Policy Excludes Coverage For New Construction, 9th Circuit Affirms
SEATTLE — The Ninth Circuit U.S. Court of Appeals on Aug. 23 affirmed a lower federal court’s ruling that an insurer did not breach its duty to defend its subcontractor insured against homeowners’ underlying construction defects claims, finding that the underlying claims are barred from coverage because they involve new construction.
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August 22, 2024
Reinsurer Takes Timely Notice, Other Issues To 5th Circuit In Indemnity Row
NEW ORLEANS — Fighting a $2,866,423.97 judgment that includes attorney fees, a reinsurer told the Fifth Circuit U.S. Court of Appeals that the challenged decision “appears to be the first case to vest virtually unfettered discretion with an insured (or ceding company in this case) to decide when to notify its insurer (or reinsurer) of a claim.”
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August 21, 2024
Asbestos Plaintiffs Claim BNSF, Insurer Use ‘Float’ To Profit Off Asbestos Claims
GREAT FALLS, Mont. — BNSF Railway Co. and its insurer Zurich American Insurance Co., which were recently held liable for $8 million in asbestos-related damages by a jury, commodify asbestos claims and trade on “human suffering” by delaying payment and refusing to settle in an effort to profit off the “float” between the time when they receive claims and when they make payments, plaintiffs allege in a complaint in Montana federal court.