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

Mealey's Insurance Bad Faith

April 18, 2025
Statutory, Common-Law Bad Faith Claims Against Auto Insurer Fail, Judge Says

PHILADELPHIA — An insured’s statutory bad faith claim against an auto insurer is barred by the applicable two-year statute of limitations and the insured’s breach of contract and common-law bad faith claims also are barred from proceeding based on the insured’s acceptance of a settlement offer from the insurer, a Pennsylvania federal judge said in granting the auto insurer’s motion for judgment on the pleadings.
April 17, 2025
Breach Of Contract, Bad Faith Claims In Hurricane Damage Suit Dismissed

NEW ORLEANS — A Louisiana federal judge dismissed an insured’s breach of contract and bad faith suit stemming from a dispute over coverage for property damages sustained during a hurricane to a rental property because the insured failed to show that the damages are covered under a property insurance policy.
April 17, 2025
District Court Erred In Denying Insured’s Motion To Remand, 5th Circuit Says

NEW ORLEANS — A district court erred in denying an insured’s motion to remand because the insured’s claims against a nondiverse insurance agent named as a defendant in the insured’s breach of contract and bad faith suit can proceed because the insurance policy at issue did not require the insured to live in the property’s home rather than a travel trailer located on the property, the Fifth Circuit U.S. Court of Appeal said in reversing the lower court’s ruling on the motion to remand and in vacating the lower court’s order compelling arbitration.
April 16, 2025
Discovery Hearing Canceled In Bad Faith Suit Upon Liquidation Of Insurer

LAS VEGAS — In a docket-only minute order, a Nevada federal magistrate judge canceled a discovery hearing after previously issuing an order staying a bad faith suit against an insurer upon receiving notification that a Kansas state court entered a judgment of liquidation, finding the insurer insolvent.
April 16, 2025
5th Circuit Remands Attorney Fees Issue In Hurricane Laura Coverage Dispute

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals remanded two questions regarding attorney fees to a lower federal court and otherwise affirmed the judgment in favor of the church insured in a bad faith lawsuit arising from Hurricane Laura damage.
April 16, 2025
No E&O Coverage Owed For $262,500 Insured Paid To Hospital, 5th Circuit Affirms

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on April 15 affirmed summary judgment in favor of a managed care organization’s errors and omissions insurer in the insured’s bad faith lawsuit seeking coverage for the $262,500 it paid to a hospital to settle an underlying claim, finding that no coverage exists because the insured paid the underlying claim without the insurer’s prior consent.
April 16, 2025
Insureds Seek Coverage For 11 Suits Alleging Human Trafficking At Red Roof Hotels

COLUMBUS, Ohio — Insured hotel companies sued their general liability insurer in an Ohio federal court for breach of contract and bad faith, alleging that the insurer arbitrarily and capriciously denied coverage for 11 underlying lawsuits alleging that human trafficking occurred at various Red Roof hotels.
April 15, 2025
Settled Asbestos Defendant Blames Dilatory Resolution On Insurer’s Conduct Alone

NEW ORLEANS — An insurer misinterpreted and misrepresented the provisions of its own policy and the insurer’s actions delayed payment after a settlement in an asbestos case and it should not be rewarded for such bad faith conduct, an insured told a federal judge in Louisiana on April 14 in seeking to add a crossclaim for penalties and attorney fees.
April 15, 2025
Bad Faith Suit: CFPA Systematically Failed To Investigate, Pay Wildfire Claims

LOS ANGELES — Plaintiffs sued California Fair Plan Association (CFPA) and its “largest” members for breach of contract and bad faith in a California court, seeking compensation for their losses incurred by the January Los Angeles wildfires and to hold CFPA “accountable for its decade-long, systematic failure to properly investigate and pay wildfire claims.”
April 15, 2025
Skechers Seeks Coverage For Injury Claims Caused By Shoes’ Lack Of Slip-Resistance

LOS ANGELES — Skechers USA Inc. sued its commercial liability insurer in a California court for breach of contract, breach of the implied covenant of good faith and fair dealing and unfair competition, alleging that the insurer has a duty to defend it against an underlying action contending that class members were harmed by actual physical accidents caused by the insured’s shoes’ lack of slip-resistance or by the fact that the shoes were unusable.
April 14, 2025
Dismissal Bid Fought In Dispute Over Disability Policy ‘Age 65’ Language

PHOENIX — Arguing in part that the defendants’ “desired interpretation runs counter to the well-pleaded facts, the parties’ expectations, any reasonable consumer’s expectations, and decisional law,” a plaintiff on April 11 urged an Arizona federal court to deny dismissal of his putative class complaint over whether certain individual long-term disability (LTD) benefits must be paid through eligible insureds’ 65th birthdays.
April 14, 2025
Connecticut State Judge Refuses To Strike Insured’s Bad Faith Claim

BRIDGEPORT, Conn. — An insured’s bad faith claim against a property insurer can proceed because it is not clear from the facts alleged in the complaint if the insurer’s denial of coverage for a water damage claim was reasonable, a Connecticut state judge held in denying the insurer’s motion to strike the bad faith claim.
April 14, 2025
Insured’s Unfair Practices, Bad Faith Claims In Fire Damage Suit Will Proceed

HARTFORD, Conn. — A Connecticut federal judge denied a property insurer’s motion to dismiss an insured’s claims for bad faith and unfair trade practices after determining that the insured sufficiently alleged that the insurer’s conduct in handling a fire damage claim may have been part of a general business practice and may have constituted bad faith.
April 14, 2025
Insureds’ Breach Of Contract, Bad Faith Suit Barred By Doctrine Of Res Judicata

HOUSTON — A breach of contract and bad faith lawsuit filed by insureds against their homeowners insurer must be dismissed based on the doctrine of res judicata because the insureds’ suit is based on the same claims that were brought or could have been brought in a prior lawsuit filed by the insureds.
April 09, 2025
COMMENTARY: The Ultimate Social Inflation Survival Guide: Containing Rising Claims Costs In A World Rife With Economic Inflation, Litigation Funding, Nuclear Verdicts, And Anti-Corporate Sentiment

By Scott M. Seaman
April 11, 2025
Federal Magistrate Judge Says Bad Faith, Breach Claims Against Auto Insurer Fail

DURHAM, N.C. — A North Carolina federal magistrate judge granted an auto insurer’s motion to dismiss claims for breach of contract, bad faith and unfair trade practices after determining that the complaint fails to state sufficient facts to support a finding that the insurer breached its contract or acted in bad faith by failing to settle a claim brought against the insured.
April 09, 2025
Breach Of Contract Suit In Storm Coverage Dispute Is Untimely, Texas Panel Affirms

DALLAS — A Texas appeals court affirmed a lower court’s grant of summary judgment in favor of a homeowners insurer on remand of a coverage dispute arising from property damage caused by a wind and hailstorm, agreeing with the lower court that the insureds’ breach of contract lawsuit was untimely.
April 09, 2025
Bad Faith Refusal-To-Settle Claim Cannot Be Litigated In Garnishment Proceeding

LANSING, Mich. — In an issue of first impression, the Michigan Supreme Court reversed and remanded an appeals court’s ruling that a third-party claimant was permitted to file writs of garnishment against two insurers based on the claimant’s contention that the insurers acted in bad faith by failing to settle the claimant’s suit against an insured after determining that claims for bad faith refusal to settle are not subject to garnishment because there are no liquidated damages that could be collected through garnishment.
April 09, 2025
Bad Faith Claim In Water Damage Coverage Suit To Proceed, Judge Says

LOS ANGELES — An insured’s bad faith claim alleged against a homeowners insurer in a dispute over coverage for water damage in the insured’s home can proceed because dismissal of the bad faith claim would be premature, a California federal judge said in partially denying the insurer’s motion.
April 08, 2025
6th Circuit Refuses To Reconsider No Coverage Ruling In Professional Liability Suit

CINCINNATI — The Sixth Circuit U.S. Court of Appeals denied an appellant’s petition for panel rehearing and rehearing en banc, refusing to reconsider its finding that her declaratory judgment and bad faith claims fail because she did not provide a professional liability insurer with “all reasonably obtainable information” about her potential negligence claim against a dentist insured.
April 07, 2025
Asbestos Exclusions Bar Coverage For Underlying Asbestos Bodily Injury Suits

INDIANAPOLIS — An insured’s breach of contract and bad faith suit filed against its insurer cannot proceed because the insurer has no duty to defend or indemnify the insured in underlying asbestos bodily injury suits based on asbestos exclusions included in the insurer’s policy, an Indiana federal judge said in granting the insurer’s motion to dismiss.
April 07, 2025
Multiple Claims Alleged By Insured In Faulty Work Coverage Suit Dismissed

NEWARK, N.J. — A New Jersey federal judge granted a professional liability insurer’s motion to dismiss an insured’s claims alleging breach of contract, bad faith, unjust enrichment and declaratory judgment after determining that the insured failed to identify a policy provision that was breached and failed to show that the insurer’s denial of coverage for an underlying suit related to the insured’s architectural work was unreasonable.
April 07, 2025
Judgment Denied In Breach Of Contract, Bad Faith Suit Over $70K Life Policy

ALBANY, Ga. — A Georgia federal judge granted in part and denied in part a motion for summary judgment filed by a life insurer in a breach of contract and bad faith suit against it by the beneficiary of a $70,000 life insurance policy, finding in part that a dispute of facts remains as to whether the decedent made misrepresentations in the policy application.
April 04, 2025
California Panel Reverses Judgment For Insurer In HOA’s Suit Over Water Damage

LOS ANGELES — Finding that there are issues of material fact regarding whether the water damage and faulty workmanship exclusions in a condominium homeowners association’s all risks policy preclude coverage for rain damage that occurred during a reroofing project, a California appellate panel reversed a lower court’s grant of summary judgment to the insurer on the association’s breach of contract and bad faith claims.
April 02, 2025
5th Circuit Says No Additional Coverage Owed For Insured’s Hurricane Damage Claims

NEW ORLEANS — An insurer properly adjusted an insured’s claims for hurricane damages based on the actual cash value of the damages to the insured’s properties and did not act in bad faith in handling the claims, the Fifth Circuit U.S. Court of Appeals said in affirming a series of rulings issued by a district court.