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

Mealey's Insurance Bad Faith

August 20, 2024
Hurricane Coverage Row With Guaranty Association Dismissed With Reopening Provision

NEW ORLEANS — After being advised that the parties reached a compromise agreement, a Louisiana federal judge dismissed a breach of contract suit over damages from Hurricane Ida filed against the Louisiana Insurance Guaranty Association (LIGA), which was substituted for an insolvent homeowners insurer, finding that the claims must be dismissed without prejudice only as to the right to reopen the case if the settlement is not completed within 60 days.
August 19, 2024
Homeowners Say Insurer Wrongfully Denied Coverage For Mine Subsidence Damages

OWENSBORO, Ky. — An insured couple claims that an insurer breached its contract and acted in bad faith by denying their claim for damages to their home caused by mine subsidence because the damages were documented and clearly caused by mine subsidence and not by earth movement or wear and tear as the insurer maintained in its coverage denial letter.
August 19, 2024
District Court’s Collapse Ruling Was Not Clearly Erroneous, Insurer Says

CINCINNATI — A district court’s 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 was not clearly erroneous because the wall remained standing and did not collapse as required for coverage to be afforded under the policy, the insurer says in its Aug. 16 appellee brief filed in the Sixth Circuit U.S. Court of Appeals.
August 19, 2024
Homeowners Insurer Did Not Breach Contract, Act In Bad Faith In Denying Claim

DENVER — A district court properly entered judgment in favor of a homeowners insurer on breach of contract and common-law and statutory bad faith claims because the insured did not reside at her home, as required by the policy, when the home was damaged as the result of a fire, the 10th Circuit U.S. Court of Appeals said.
August 16, 2024
Statutory Bad Faith Claim Fails Based On Assignment Of Rights Contract, Judge Says

BATON ROUGE, La. — An assignee’s statutory bad faith claim against a commercial property insurer cannot proceed because the assignment of rights contract between the insured and a construction company did not include language pertaining to bad faith penalty statutes, a Louisiana federal judge said in granting the insurer’s motion to dismiss.
August 15, 2024
Statutory Bad Faith Claim Alleged Against Auto Insurer Fails, Federal Judge Says

CAMDEN, N.J. — An insured’s bad faith claim brought under New Jersey’s Insurance Fair Conduct Act (IFCA) cannot proceed because the law was enacted almost two years after the insured’s claim for underinsured motorist (UIM) benefits was denied; however, the insured’s common-law bad faith claim may be able to proceed if the insured is successful in proving that amending the claim would not be futile, a New Jersey federal judge said Aug. 14 in granting an auto insurer’s motion to dismiss.
August 15, 2024
Building Owner Appeals No Coverage Ruling In Suit Over Structural Damage

PHOENIX — A building owner insured filed a notice in an Arizona federal court indicating that it is appealing the court’s July 26 ruling that granted a commercial property insurer’s motion for summary judgment in its breach of contract and bad faith lawsuit seeking coverage for structural damage to its building, challenging the court’s conclusion that its loss was reasonably foreseeable and almost certain to occur and, as a result, the risk was not covered.
August 14, 2024
Bad Faith Claims Against Auto Insurer Are Barred By Claim Preclusion, Judge Says

DENVER — An insured’s bad faith suit arising out of a dispute over uninsured motorist (UM) benefits cannot proceed because the bad faith claims are barred by claim preclusion as they could have been brought against the insurer in a prior breach of contract suit filed against the insurer by the insured, a Colorado federal judge said Aug. 13.
August 14, 2024
Insured: Insurer Acted In Bad Faith In Denying Claim For Damage Caused By Collapse

PHILADELPHIA — An insured sued its commercial property insurer for breach of contract and bad faith in a Pennsylvania federal court, seeking coverage for damage caused by the partial collapse of the façade of a seven-story residential rental building.
August 13, 2024
Questions Of Fact Exist On Auto Insurer’s Handling Of Insured’s Claim, Judge Says

DENVER — A Colorado federal judge denied an auto insurer and an insured’s motions for summary judgment on bad faith claims after determining that questions of fact exist regarding whether the insurer acted reasonably in handling the insured’s claim for underinsured motorist benefits.
August 12, 2024
Breach Of Contract Claim Proceeds Against Life Insurer; Bad Faith Claim Fails

OKLAHOMA CITY — A breach of contract claim against a life insurer can proceed because the beneficiary sufficiently established proof of the insured’s death; however, a bad faith claim cannot proceed because the beneficiary failed to show how the life insurer acted unreasonably in handling the claim for beneficiary benefits, an Oklahoma federal judge said in partially granting the life insurer’s motion for judgment on the pleadings.
August 12, 2024
Homeowners Insurer Failed To Meet Burden Of Proving Bad Faith Claim Cannot Proceed

SAN ANTONIO — A Texas federal judge denied a homeowners insurer’s motion for partial summary judgment on claims alleging bad faith, misrepresentation and violation of the Texas Insurance Code after determining that the insurer failed to meet its burden of showing that the dispute over storm damage coverage was nothing more than a bona fide coverage dispute.
August 09, 2024
Panel Reverses, Tosses Claims Against Guaranty Association In Coverage Dispute

GRETNA, La. — A Louisiana appeals court reversed a lower court’s judgment denying the Louisiana Insurance Guaranty Association’s (LIGA) exception of no cause of action and dismissed homeowners’ claims in a dispute over their now-insolvent insurer’s alleged failure to cover damage from Hurricane Ida, finding that the petition fails to state a claim for statutory damages against LIGA.
August 08, 2024
Insured Failed To Show Property Damage Was Caused By Vandalism, Not Wear, Tear

PHILADELPHIA — A Pennsylvania federal judge granted a property insurer’s motion for summary judgment on breach of contract and bad faith claims after determining that the insured failed to offer any evidence that damages to a rental property were caused by vandalism, a covered cause of loss, as opposed to wear and tear, an excluded cause of loss.
August 07, 2024
Insureds Failed To Show Homeowners Insurer Unreasonably Denied Coverage, Judge Says

PHILADELPHIA — A Pennsylvania federal judge on Aug. 6 dismissed without prejudice a bad faith claim against a homeowners insurer after determining that the insureds failed to plead sufficient facts in support of their contention that the insurer unreasonably denied their claim for storm damage to their home.
August 07, 2024
Insurers, Claims Administrator Seek Dismissal Of Lawsuit Over Asbestos Judgment

NEW YORK — Sparring with a man who obtained a multimillion-dollar asbestos exposure judgment against a dissolved manufacturer, a third-party claims administrator urges a New York federal court to grant its dismissal motion, arguing in its reply brief that it “has located no legal precedent to support” the man’s theory that he is “an ‘implied assignee’” of the manufacturer.
August 02, 2024
Insured’s Breach Of Contract, Bad Faith Claims Against Insurer Are Untimely

MUSKOGEE, Okla. — An Oklahoma federal magistrate judge granted a homeowners insurer’s motion for summary judgment on breach of contract and bad faith claims because the policy’s one-year suit limitation bars the breach of contract claim and the two-year statute of limitations for bad faith claims bars the insured’s bad faith claim.
August 01, 2024
Insurer Files Counterclaim Against Homeowners, Appraiser In Hurricane Coverage Row

NEW ORLEANS — After homeowners sued their insurer for breach of contract and bad faith related to the insurer’s alleged failure to cover their loss related to Hurricane Ida, the insurer filed a counterclaim against them and a third-party complaint against their appraiser, seeking damages for the homeowners’ and appraiser’s alleged scheme to defraud the insurer by inflating the damages estimate and improperly attributing costs to upgrade the property to hurricane damages.
August 01, 2024
Panel Denies Rehearing, Allows Ruling To Stand In Dispute Over Medical Payments

ATLANTA — The 11th Circuit U.S. Court of Appeals denied an insured’s motion for panel rehearing, refusing to reconsider its ruling that the insured’s breach of contract and bad faith claims against an auto insurer were properly dismissed because the auto policy clearly states that the insurer will pay only for medical expenses deemed necessary and reasonable.
July 31, 2024
Questions Of Fact Exist On Timeliness Of Homeowners Insurer’s Payment

SHERMAN, Texas — A Texas federal judge denied a homeowners insurer’s motion for summary judgment after finding that questions of fact exist regarding whether the insurer timely paid the insured’s claim for damages to his home caused by a winter storm.
July 31, 2024
Reconsideration Denied In Dispute Over Misrepresentation As To $2M Life Policies

MACON, Ga. — A Georgia federal judge on July 30 denied a life insurance beneficiary’s motion for reconsideration of a summary judgment ruling for the insurer regarding the beneficiary’s bad faith claim related to the insurer’s attempted rescission of two $1 million life insurance policies, finding that the insurer “had reasonable grounds to contest” the beneficiary’s claim given that the insured made misrepresentations in his insurance applications regarding his alcohol use.
July 31, 2024
9th Circuit Reverses Judgment In Insurance Row Over Application Misrepresentation

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals reversed and remanded a district court’s grant of summary judgment to insurers in their insureds’ suit seeking coverage for expenses in defending another suit regarding fraud-based claims, finding that the district court erred in applying Nevada law, rather than Texas law, and that pursuant to Texas law, reversal is required because material facts remain in dispute regarding alleged material misrepresentations in the insureds’ application for policy renewal.
July 29, 2024
Bad Faith Claim Against Disability Insurer Cannot Proceed, Judge Says

FORT SMITH, Ark. — A bad faith claim alleged against a disability insurer cannot proceed because the disability claimant fails to allege sufficient facts in support of the claim and the complaint alleges only that a disagreement exists over the insurer’s denial of his long-term disability (LTD) claim, an Arkansas federal judge said.
July 29, 2024
Disability Claimant’s Suit Fails; Policy Rider Clearly Stated Terms, Judge Says

LOS ANGELES — A California federal judge granted a disability insurer’s motion for summary judgment and dismissed a breach of contract and bad faith suit filed against a disability income insurer after determining that the insurer’s termination of cost-of-living benefits was proper pursuant to the terms of the policy rider and its termination provision.
July 29, 2024
Judge: Insured’s Structural Building Damage Was Not ‘Fortuitous’; No Coverage Owed

PHOENIX — A federal judge in Arizona on July 26 granted a commercial property insurer’s motion for summary judgment in a building owner insured’s breach of contract and bad faith lawsuit seeking coverage for structural damage to its building, finding that the insured’s loss was reasonably foreseeable and almost certain to occur and, as a result, the risk was not covered.