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Mealey's Insurance Bad Faith

  • 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.

  • 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.

  • 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.

  • 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.

  • 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.

  • 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.

  • 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.

  • 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.

  • 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.

  • 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.

  • 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.

  • 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.

  • 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.

  • 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.

  • 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.

  • 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.

  • 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.

  • 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.

  • 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.”

  • 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.

  • 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.