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

Mealey's Insurance Bad Faith

September 26, 2024
Legitimate Dispute Over Coverage For Insureds’ Roof Existed, Federal Judge Says

OKLAHOMA CITY — A bad faith claim alleged against a homeowners insurer that denied coverage for the replacement of the insureds’ roof following a hail storm cannot proceed because the evidence shows that a legitimate dispute over coverage under the policy existed, an Oklahoma federal judge said in granting a homeowners insurer’s motion for summary judgment.
September 26, 2024
Limited Discovery Warranted To Determine Auto Insurer’s State Of Citizenship

OXFORD, Miss. — A Mississippi federal judge denied an auto insurer’s motion to dismiss without prejudice after determining that limited discovery is warranted to determine if complete diversity of citizenship exists between the insurer and the insured.
September 25, 2024
Judge Tosses All Claims In Hurricane Coverage Dispute With Guaranty Association

NEW ORLEANS — “Considering” the parties’ joint dismissal motion, a Louisiana federal judge dismissed with prejudice 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.
September 24, 2024
Federal Magistrate Judge Refuses To Bifurcate Bad Faith Claims In Auto Coverage Suit

LAS CRUCES, N.M. — A New Mexico federal magistrate judge on Sept. 23 denied an auto insurer’s motion to bifurcate and stay discovery of an insured’s bad faith claims after determining that resolution of the insured’s claim for underinsured motorist (UIM) benefits will not result in the resolution of the bad faith claims because the insured alleges bad faith acts that are independent of the insurance contract.
September 24, 2024
Panel Says Insured Failed To Show He Is Disabled From Both Occupations As Required

TRENTON, N.J. — The Third Circuit U.S. Court of Appeals affirmed a district court’s ruling in favor of a disability income insurer, agreeing with the lower court’s determination that the insured failed to show that he cannot perform the substantial and material duties of his occupations as an ophthalmic surgeon and ophthalmologist.
September 20, 2024
Summary Judgment Granted To Insurer For ‘Legal Fraud’ In Insurance Application

TUCSON, Ariz. — An Arizona federal judge granted summary judgment to a homeowners insurer in its suit seeking to rescind its insured’s policy for material misrepresentation in the insurance application, finding that the insured’s misrepresentation that the property was his primary residence and failure to correct the policy’s terms representing this residency “constitute legal fraud,” thereby making rescission “proper.”
September 20, 2024
Issues Of Fact Exist On Insureds’ Breach Of Contract, Bad Faith Claims

OKLAHOMA CITY — A homeowners insurer is not entitled to summary judgment on breach of contract and bad faith claims because issues of fact exist regarding the valuation of the insureds’ claim and whether the insurer acted in bad faith in investigating and evaluating the insureds’ claim for damages caused by a storm to their home.
September 19, 2024
Interpretation Of ‘Direct Physical Loss’ Phrase Was Erroneous, Building Owner Says

CINCINNATI — A district court erred in relying on a definition of the term “direct physical loss” as used in a prior opinion issued by the Sixth Circuit U.S. Court of Appeals when it determined that the collapse of some bricks from a wall within a building did not cause any damage to the wall or building as a whole, the building owner maintains in a Sept. 18 appellant reply brief filed in the Sixth Circuit.
September 18, 2024
Status Conference Sought In Arbitration Awards Row In Reinsurance Dispute

NEW YORK — Months after briefing concluded on pending cross-petitions in an arbitration awards dispute involving attorney fees and whether there was a probability or a possibility of an excess judgment in the underlying case, a reinsurer on Sept. 17 asked a New York federal court for “a status conference to determine whether the parties may supply the Court with any additional materials to resolve this cross-petition.”
September 18, 2024
Magistrate Partly Grants Motion To Quash Discovery On Reinsurance, Reserves

LAKE CHARLES, La. — Partly granting an insurer’s motion to quash in a breach of contract and bad faith suit over home damage purportedly caused by hurricanes, a Louisiana federal magistrate judge cited two other decisions in ruling that that certain reinsurance and reserve information and the requested prior deposition testimony are within the scope of permissible discovery.
September 17, 2024
Parties Dismiss Appeal Following Settlement Of Environmental Coverage Suit

SOUTH BEND, Ind. — An insured and its insurers filed a stipulation of voluntary dismissal of all appeals and cross-appeals in the Seventh Circuit U.S. Court of Appeals on Sept. 16 following the settlement of the insured’s suit seeking coverage for the cleanup of polychlorinated biphenyls (PCBs).
September 17, 2024
Insured Says District Court Erred In Interpreting Radioactive Materials Exclusion

CHICAGO — A district court erred in finding that no coverage is owed by insurers pursuant to the policies’ radioactive materials exclusion for an underlying suit seeking damages for bodily injuries caused by exposure to electromagnetic (EMF) radiation from the insured’s electric transformers because a reasonable insured would interpret the exclusion as providing coverage for the EMF exposure claims, the insured maintains in an appellant brief filed in the Seventh Circuit U.S. Court of Appeals.
September 16, 2024
Panel Majority Reverses Ruling On Vexatious Litigation Claims Against Auto Insurer

HARTFORD, Conn. — The majority of the Connecticut Appellate Court partially reversed a trial court’s ruling in favor of an auto insurer after determining that the insured properly asserted claims for common-law and statutory vexatious litigation against the insurer based on the insured’s allegations that the insurer allegedly provided false answers to the insured’s complaint in a prior action.
September 16, 2024
Drug, Narcotics Exclusions Bar Claims Under Accidental Death Policy, Panel Says

DENVER — A district court properly dismissed a breach of contract and bad faith suit filed by the beneficiaries of accidental death insurance policies because the policies’ drug and narcotics exclusions bar coverage for the insured’s death, caused by taking a combination of hydrocodone and mitragynine, the 10th Circuit U.S. Court of Appeals said.
September 16, 2024
Claims Against Auto Insurer Fail; No Coverage Owed Under Policy, Judge Says

LAS VEGAS — An insured’s claims for breach of contract, bad faith and violation of Nevada law cannot proceed because the insurer met its burden of showing that the insured is not entitled to uninsured motorist (UM) benefits under the auto policy, a Nevada federal judge said in granting the auto insurer’s motion for summary judgment.
September 13, 2024
Insured’s Bad Faith Counterclaim Cannot Proceed, Alaska Federal Judge Says

ANCHORAGE, Alaska — A bad faith counterclaim filed against an auto insurer cannot proceed because the insurer’s filing of a declaratory judgment suit regarding its coverage obligations to its insured who was involved in an auto accident while working for a rideshare service company does not constitute bad faith as there was uncertainty regarding whether coverage is afforded under the policy, an Alaska federal judge said.
September 13, 2024
Trial Court Properly Found Insured’s Complaint Against Auto Insurer Cannot Proceed

MADISON, Wis. — The Second District Wisconsin Court of Appeals affirmed a trial court’s summary judgment ruling in favor of an auto insurer on the insured’s breach of contract and bad faith claims because the trial court properly found that the insured’s complaint fails to allege the existence of a contract and fails to show that the auto insurer’s settlement of a suit filed against the insured was not reasonable.
September 13, 2024
Settlement Reached Between Insurer, Insureds In Water Damage Coverage Suit

CHEYENNE, Wyo. — A homeowners insurer and its insureds notified the U.S. District Court for the District of Wyoming that a settlement of the insureds’ breach of contract and bad faith suit stemming from a clam for water damages has been reached.
September 12, 2024
Auto Insurer Must Produce Documents Created Prior To Counteroffer, Judge Says

BURLINGTON, Vt. — An auto insurer is required to produce documents that were requested by insureds in a breach of contract and bad faith suit because the documents were produced prior to the date on which the insurer believed litigation was likely, a Vermont federal judge said in partly granting and partly denying a motion to compel, noting that the insurer may have believed that litigation was likely when it made a counteroffer to the insureds on their claim for underinsured motorist benefits.
September 12, 2024
Insureds’ Suit Against Homeowners Insurer Remanded; Damages Do Not Exceed $75K

GREENVILLE, S.C. — A South Carolina federal judge remanded a breach of contract and bad faith lawsuit filed against a homeowners insurer because it is not apparent from the face of the insureds’ complaint that the amount in controversy exceeds the minimum federal jurisdictional amount of $75,000 and because the insureds filed a stipulation stating that the damages will not exceed $75,000.
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.”
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.
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.
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.
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.