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

Mealey's Insurance Bad Faith

July 16, 2024
Federal Judge Rules For Homeowners Insurer In Dispute Over Tornado Damage

DALLAS — A federal judge in Texas granted a homeowners insurer’s motion for summary judgment in a insured’s breach of contract and bad faith lawsuit arising from property damage caused by a 2019 tornado, finding that summary judgment is proper because the insured has already received the benefits she is owed under her insurance policy.
July 15, 2024
Alabama Federal Judge Severs Insurer’s Row With Reinsurer Into 6 Separate Lawsuits

MONTGOMERY, Ala. — Entering judgment in disputes between an insurer and its reinsurer based on rulings dating as far back as 2021, an Alabama federal judge on July 12 ordered the remaining claims and counterclaims severed into six separate cases.
July 15, 2024
Issue Of Fact Exists As To Why Appraisal Was Delayed, Arizona Federal Judge Says

PHOENIX — A homeowners’ breach of contract and bad faith claims stemming from a water damage claim can proceed because a question of fact exists as to why an appraisal proceeding was delayed for two years following the homeowners’ initial demand for appraisal, an Arizona federal judge said in denying the insurer’s motion for summary judgment.
July 15, 2024
Insured Failed To Support Breach Of Contract Claim, Magistrate Judge Says

WACO, Texas — A Texas federal magistrate judge recommended granting a homeowners insurer’s motion for summary judgment on breach of contract and extracontractual claims after determining that the claims cannot proceed because the insured failed to show that the insurer breached its contract in handling the insured’s claim for water damages caused by an overflowing toilet.
July 12, 2024
Question Of Fact Exists On Coverage For Hail Damage; Bad Faith Claim Fails

SAN ANTONIO — A Texas federal judge denied an insurer’s motion for summary judgment on a breach of contract claim after determining that a question of fact exists as to whether hail damage on the roof of an insured building occurred during the applicable policy period; however, the judge granted the insurer’s motion on the claim for bad faith after determining that the bad faith claim could not survive as there is a legitimate dispute over coverage for the insured’s claim.
July 12, 2024
Panel Affirms No Coverage Ruling In Television Producer’s Coronavirus Coverage Suit

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on July 11 affirmed a lower federal court’s grant of an insurer’s motion for judgment on the pleadings in a television series producer insured’s breach of contract lawsuit seeking coverage for its losses incurred from coronavirus-related disruptions and delays in the production of its show, rejecting the insured’s contention that the lower court should have permitted it to present extrinsic evidence before it granted the insurer’s motion.
July 12, 2024
Injured Passenger’s Bad Faith, Negligence Claims Against Auto Insurer Fail

PHOENIX — An Arizona appellate court affirmed a trial court’s dismissal of a negligence and bad faith suit filed against an auto insurer, agreeing with the lower court that the claims fail because the claims are based on the insurance contract to which the passenger in the insured auto was not a party.
July 12, 2024
Federal Judge Refuses To Dismiss Coverage Dispute Over False Advertising Claims

LOS ANGELES — A federal judge in California denied a professional liability insurer’s motion to dismiss insureds’ breach of contract and bad faith lawsuit seeking coverage for an underlying putative class action alleging that they falsely advertised a penis enlargement device, finding that the court is unable to determine as a matter of law that the insureds’ alleged statements and omissions fail to arise out of work performed by the insureds that involves “specialized training, knowledge and skill in the pursuit of urology, including surgery.”
July 11, 2024
5th Circuit Affirms Court’s Refusal To Allow Insured To Amend Hurricane Laura Suit

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on July 10 affirmed a federal court’s ruling that denied an insured’s motion to amend her complaint in a breach of contract and bad faith coverage lawsuit arising from Hurricane Laura damage, finding that the insured did not ask for leave to file an amended complaint until after her claims were dismissed and “well after” her attorney was aware of the deficiencies in her complaint.
July 11, 2024
Insured Sues Insurer For Bad Faith, Seeks Coverage For ‘Hidden Damage’ To Condos

SEATTLE — A condominium owners association sued its property insurer in a Washington federal court for breach of contract, bad faith and violations of the Washington Consumer Protection Act, seeking coverage for the cost of repairing “hidden damage” to its condominiums.
July 11, 2024
Bad Faith Claims Barred By Homeowners Policy’s Suit Limitation Provision

LAKE CHARLES, La. — Bad faith claims alleged against a homeowners insurer by insureds in a coverage dispute over property damages caused by Hurricanes Laura and Delta must be dismissed because the insureds failed to file their suit within two years as required by the policy’s suit limitation provision, a Louisiana federal judge said in granting the insurer’s motion to dismiss.
July 10, 2024
Bad Faith Claim Against Insurer In Water Damage Suit Dismissed Without Prejudice

PHILADELPHIA — A Pennsylvania federal judge on July 9 dismissed an insured’s bad faith claim without prejudice after determining that the insured failed to allege the basis for the insurer’s denial of a claim for water damage and failed to provide sufficient facts to support a finding that the insurer’s handling of the claim was in bad faith.
July 10, 2024
Louisiana Majority Reverses Coverage Ruling In Suit Over Damaged Farm Equipment

SHREVEPORT, La. — A majority of a Louisiana appeals court reversed a lower court’s ruling that an insurance policy provided coverage for damaged farm irrigation equipment but affirmed the lower court’s ruling in favor of the insurer on the insured’s claims for detrimental reliance and bad faith penalties.
July 09, 2024
Panel Affirms District Court’s Bad Faith Ruling, Judgment In Water Damage Suit

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeal affirmed a district court’s $125,000 judgment in favor of an insured in a water damage dispute after determining that the lower court did not abuse its discretion in denying the insured’s request for appraisal or in entering partial summary judgment on the insured’s bad faith claim because there is no evidence that the parties agreed to arbitrate the dispute and no evidence that the insurer acted in bad faith in handling the insured’s claim.
July 09, 2024
Judge: Insureds Failed To Show Their Damage Was Not Caused By Defect, Deterioration

LOS ANGELES — A federal judge in California held that damages to insureds’ property “were caused by a defect, weakness, inadequacy, fault, or unsoundness in design, repair, construction, or materials — which in turn caused wear, tear, . . . deterioration, and wet or dry rot” and that, as a result, their loss is excluded from coverage under their homeowners insurance policy.
July 03, 2024
Constructive Trust Claims Deadline Set In Liquidation Of Vesttoo And Affiliates

WILMINGTON, Del. — In the Chapter 11 liquidation of Vesttoo Ltd. and its dozens of affiliates, a Delaware federal bankruptcy judge set a July 22 deadline for asserting constructive trust claims and overruled the liquidating trustee’s objection regarding compensation for special counsel retained by the debtors.
July 02, 2024
Appeal Over Confirmation Of Vesttoo’s Liquidation Is Voluntarily Dismissed

WILMINGTON, Del. — An appeal of the order confirming the Chapter 11 plan of liquidation for Vesttoo Ltd. and its dozens of affiliates has been voluntarily dismissed pursuant to a joint stipulation.
June 28, 2024
Beneficiary’s Claims Fail Based On Proper Rescission Of Policy, Judge Says

SACRAMENTO, Calif. — A beneficiary’s breach of contract and bad faith claims cannot proceed against a life insurer because the beneficiary’s wife made a material misrepresentation on the policy application that justified the insurer’s rescission of the policy, a California federal judge said in granting the insurer’s motion for summary judgment.
June 27, 2024
Insured’s Appeal In Bad Faith Suit Dismissed For Lack Of Jurisdiction

KANSAS CITY, Mo. — An insured’s appeal arising out of a trial court’s ruling that noneconomic damages are not available under a bad faith failure-to-settle claim alleged against an auto insurer must be dismissed for lack of jurisdiction because the trial court’s ruling was not a final judgment, the Western District Missouri Court of Appeals said in dismissing the insured’s appeal.
June 27, 2024
Bifurcation Of Breach Of Contract, Bad Faith Claims Not Warranted, Judge Says

DAYTON, Ohio — Bifurcation of an insured’s breach of contract claim from the insured’s bad faith claim in a dispute over coverage for damages caused by a windstorm is not warranted because the homeowners insurer failed to meet its burden of showing that it would be prejudiced if both claims are tried together, an Ohio federal judge said in denying the insurer’s motion to bifurcate.
June 27, 2024
Breach Of Contract, Bad Faith Claims Based On Hurricane Delta Summarily Dismissed

MONROE, La. — A Louisiana federal judge summarily dismissed an insured’s claims for breach of contract and bad faith as those claims applied to coverage for damages by Hurricane Delta because the insured’s heir, who was substituted as the plaintiff following the insured’s death, testified that Hurricane Delta did not damage the insured’s home.
June 27, 2024
4th Circuit Says Breach Of Contract, Bad Faith Claims Against Auto Insurer Fail

RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals affirmed a district court’s dismissal of breach of contract and bad faith claims alleged against an auto insurer, agreeing with the lower court’s determination that the claims cannot survive because the insured did not obtain a judgment against the tortfeasor before settling her claim with the tortfeasor, as required under Virginia law, and because the insured failed to allege any facts that would support a bad faith claim under Virginia law.
June 27, 2024
Insureds’ Claim For Breach Of Covenant Of Good Faith, Fair Dealing Can Proceed

LAS VEGAS — A Nevada federal judge denied an auto insurer’s motion to dismiss a breach of the covenant of good faith and fair dealing claim because the insureds allege more than just a failure to comply with their demand for uninsured motorist (UM) benefits; however, the judge said the insureds’ bad faith claim brought under the Nevada Unfair Claims Practices Act (UCPA) cannot proceed because it is not clear how the insurer failed to timely acknowledge the insureds’ claim.
June 26, 2024
Panel Affirms Ruling In Insurer’s Favor As To Bad Faith Claim In Hailstorm Suit

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on June 25 held 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.
June 26, 2024
Special Discovery Master Does In Camera Review In Indemnification Case

TRENTON, N.J. — Following in camera review in New Jersey federal court in a dispute between insurers and reinsurers over indemnification for asbestos bodily injury claims, a special discovery master directed insurers to produce all or part of roughly two-thirds of the sample documents he considered.