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

Mealey's Insurance Bad Faith

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.
July 29, 2024
Magistrate Refuses To Bifurcate Bad Faith Claim From Breach Of Contract Claim

DENVER — A federal magistrate judge in Colorado denied a defendant insurer’s motion to bifurcate the plaintiff insurer’s bad faith claim from a breach of contract claim in its lawsuit seeking recovery of the defense and settlement costs that it paid on behalf of its general contractor insured in an underlying construction defects lawsuit, finding that the issues of bad faith and the defendant insurer’s duty to defend “are inseparable.”
July 26, 2024
Complaint Alleges Sufficient Facts To Support Bad Faith Claim Against Auto Insurer

SALT LAKE CITY — An insured’s bad faith claim against an auto insurer can proceed because the insured’s complaint alleges sufficient facts in support of a claim for bad faith and because it is not appropriate at the motion-to-dismiss stage to determine whether the insurer’s conduct was fairly debatable as a matter of law, a Utah federal judge said in denying the insurer’s motion to dismiss the bad faith claim.
July 25, 2024
Bad Faith Claim Against Homeowners Insurer Fails, Utah Federal Judge Says

SALT LAKE CITY — A bad faith claim against a homeowners insurer in a coverage dispute over roof damage cannot proceed because the insureds failed to support the claim with sufficient facts and evidence, a Utah federal judge said in partially granting the insurer’s motion for summary judgment.
July 24, 2024
9th Circuit Says No Coverage Owed For Water Damage; Extracontractual Claims Fail

SEATTLE — A district court did not err in granting a homeowners insurer’s motion for summary judgment in a water damage coverage dispute because no coverage is afforded under the policy regardless of the actual cause of the damage and because no reasonable juror could find that the insurer’s denial of coverage was unreasonable, the Ninth Circuit U.S. Court of Appeals said July 23.
July 23, 2024
California High Court Denies Request To Publish Opinion In Wildfire Coverage Suit

SAN FRANCISCO — The California Supreme Court denied a homeowners insurer’s petition to publish an appeals court’s opinion that ruled that it did not breach the policy or the implied covenant of good faith and fair dealing and did not commit financial elder abuse because it paid the proper insureds “all (if not more than)” it had a duty to pay under the policy coverages for dwelling repairs, personal property damage and temporary additional living expenses for their property damage caused by the Woolsey Fire.
July 22, 2024
5th Circuit Panel Refuses To Reconsider No Coverage Ruling In Hailstorm Suit

NEW ORLEANS — A per curiam panel of the Fifth Circuit U.S. Court of Appeals on July 19 denied insureds’ petition to reconsider its earlier finding that a lower federal court correctly determined that under Texas Supreme Court precedent, an insurer is entitled to summary judgment on insureds’ bad faith and statutory damages claims in a hailstorm coverage dispute.
July 19, 2024
Bad Faith Claims Related To Initial Denial Of Hurricane Claim Cannot Proceed

MONROE, La. — A homeowners insurer is entitled to summary judgment on bad faith claims related to the insurer’s initial denial of coverage for hurricane damages because there is no evidence to support a finding that the initial denial of coverage was unreasonable; however, the insurer is not entitled to summary judgment on the bad faith claims related to the insurer’s post-litigation conduct because the record is not clear as to when the insurer received additional information in support of the insured’s claim for damages, a Louisiana federal judge said July 18 in partially granting the insurer’s motion for summary judgment.
July 19, 2024
Ruling Affirmed On Bad Faith, Unfair Trade Practices Claims Against Auto Insurer

SEATTLE — The Ninth Circuit U.S. Court of Appeals in a July 18 unpublished opinion affirmed a district court’s ruling in favor of an auto insurer, agreeing with the lower court’s determination that claims alleging violations of Montana’s Unfair Trade Practices Act (UTPA) and bad faith cannot proceed because the insurer did not violate the UTPA or act in bad faith by enclosing an optional release when it tendered its insured’s bodily injury limits to claimants following a motorcycle accident for which its insured was liable.
July 19, 2024
Claim For Breach Of Contractual Duty Of Good Faith To Proceed Against Auto Insurer

PHILADELPHIA — A Pennsylvania federal judge dismissed claims alleging negligence and violation of Pennsylvania's Unfair Trade Practices and Consumer Protection Law (UTPCPL) against an auto insurer but allowed a claim for breach of the contractual duty of good faith and fair dealing to proceed against the insurer because the insureds are seeking damages for losses caused by the insurer’s alleged failure to settle the claim in good faith rather than seeking policy benefits for which they already were paid.
July 18, 2024
Allegations Support Bad Faith Claims Against Homeowners Insurer, Judge Says

PROVIDENCE, R.I. — Breach of contract and bad faith claims alleged against a homeowners insurer can proceed because the complaint’s allegations support an inference that the insurer did not act reasonably in handling the insureds’ claim for water damages in their home and because the insurer is estopped from enforcing the policy’s two-year suit limitation provision based on the insurer’s continued negotiations with the insureds, a Rhode Island federal judge said in denying the insurer’s motion to dismiss.
July 18, 2024
Reinsurer Communication, ‘Apex Doctrine’ Discovery Disputes Decided In Coverage Row

SAN FRANCISCO — In separate orders resolving two discovery disputes in a breach of contract and bad faith suit over coverage for property damages wineries sustained during California wildfires, a California federal magistrate judge granted a motion to compel production of the insurer’s communications with reinsurers regarding the claims and denied an “apex doctrine” request to bar one of insurer’s employees from deposition.
July 17, 2024
Parties In Reinsurance Row Dispute Proper Service For China-Based Defendants

DES MOINES, Iowa — Service of process on China-based defendants is the focus of the latest dismissal filings in Iowa federal court in a dispute over reinsurance reimbursement, with the defendants and two members of the GuideOne family of insurance companies taking opposing positions regarding whether Iowa courts have embraced the “closely related party doctrine.”
July 17, 2024
Fact Issues Remain On Whether Pollution Exclusion Applies To Coronavirus Losses

SANTA ANA, Calif. — A California federal judge denied an insurer’s motion for summary judgment on the issue of the applicability of a pollution and contamination exclusion after determining that questions of fact exist as to whether the exclusion bars coverage for business losses sustained by an insured in the wake of the COVID-19 pandemic; however, the judge granted the insurer’s motion on a bad faith claim after determining that the claim cannot survive because a legitimate coverage dispute exists.
July 17, 2024
Stay Granted In Hurricane Coverage Row After Guaranty Association Substitution

LAKE CHARLES, La. — A Louisiana federal judge granted a motion to stay filed by defendant Louisiana Insurance Guaranty Association (LIGA), which was substituted for a now-insolvent insurer in a hurricane coverage dispute, finding the stay appropriate due to the possibility of the restoration company that intervened in federal court intervening in a similar state court suit.
July 16, 2024
Judge Orders Arbitration Of Coverage Dispute Over Hurricane Ida Damages

BATON ROUGE, La. — A Louisiana federal judge granted a group of insurers’ motion to compel arbitration of claims brought against them by a commercial property owner seeking payment for damages from Hurricane Ida, finding under principles of equitable estoppel that the arbitration agreement is enforceable as to the domestic insurer as well as the foreign insurers.