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

Mealey's Insurance Bad Faith

May 17, 2024
Additional Insured’s Request For Attorney Fees To Proceed In Chemical Coverage Suit

ROCHESTER, N.Y. — An additional insured’s request for attorney fees and costs in a chemical exposure coverage dispute can proceed because the additional insured has alleged sufficient facts in support of its claim for breach of the implied covenant of good faith and fair dealing based on a breach of the insurance contract, a New York federal judge said in denying the insurer’s motion to dismiss and to strike.
May 16, 2024
Judge Cleans Up Docket, Closes Hurricane Coverage Suit Against Insolvent Insurer

LAKE CHARLES, La. — A Louisiana federal judge on May 15 issued an order administratively closing a homeowner’s breach of contract and bad faith suit over Hurricane Laura damage after the case had been stayed for almost a year due to the insurer’s insolvency, finding that “[n]early four years have passed since Hurricane Laura and the court wishes to clean up its docket.”
May 16, 2024
Claims Against Life Insurer Related To Policy Conversion Fail, 3rd Circuit Says

PHILADELPHIA — A district court properly granted summary judgment in favor of a life insurer because there is no evidence that the insurer breached its contract, acted in bad faith or made any misrepresentations regarding the policyholder’s options to convert a term life insurance policy to a whole life or universal life insurance policy, the Third Circuit U.S. Court of Appeals said in affirming the district court’s summary judgment ruling.
May 15, 2024
Additional Insured Failed To Show Specific Jurisdiction Exists Over Insurer

SAN FRANCISCO — A California federal judge on May 14 granted, with leave to amend, an insurer’s motion to dismiss an additional insured’s bad faith complaint arising out of the insurer’s appointment of counsel to represent the additional insured and the insured in an arbitration proceeding in Texas because the additional insured failed to show that specific jurisdiction exists in California over the insurer.
May 15, 2024
New Jersey Panel Reverses Ruling In Insurer’s Favor In Storm Damage Dispute

TRENTON, N.J. — A New Jersey appeals court reversed a lower court’s summary judgment ruling in favor of an insurer in an insured’s breach of contract and bad faith lawsuit arising from storm damage claim, concluding that a construction company’s invoices sufficiently established a prima facie showing of disputed facts as to how much property damage was “causally related” to a fallen tree limb, preventing summary judgment.
May 15, 2024
Insured’s Claim For Breach Of Duty Of Good Faith, Fair Dealing Dismissed

CINCINNATI — An insured’s claim for breach of the duty of good faith and fair dealing alleged against a homeowners insurer cannot proceed because claims for breach of the duty of good faith and fair dealing in Ohio arise only in tort and not under a contract, an Ohio federal judge said May 14 in dismissing the claim.
May 15, 2024
Coverage For Water Damages Limited To $10K Under Homeowners Policy, Panel Says

HOUSTON — No additional coverage is owed under a homeowners policy for water damages caused by water pipes that burst as a result of power outages and freezing temperatures in the wake of Winter Storm Uri in Texas because the policy’s water damage endorsement clearly limits coverage under the policy to $10,000, the First District Texas Court of Appeals said May 14 in affirming a trial court’s ruling on breach of contract and extracontractual claims.
May 14, 2024
Multifamily Housing Lessor Seeks Coverage For Antitrust Conspiracy Claims In MDL

DENVER — A multifamily housing lessor insured sued its primary and excess data protection liability insurers in a Colorado federal court for breach of contract and bad faith, seeking coverage for an underlying multidistrict litigation alleging that it was involved in an antitrust conspiracy when it used a revenue management software to artificially inflate multifamily housing rents above market across the country.
May 14, 2024
Federal Judge Dismisses Lead Insurer From D&O Coverage Dispute Over SEC Subpoena

WASHINGTON, D.C. — A District of Columbia federal judge granted a joint motion filed by Federal Home Loan Mortgage Corp. (Freddie Mac) and its lead insurer to dismiss the insurer from Freddie Mac’s breach of contract and bad faith lawsuit seeking directors and officers liability coverage for underlying expenses it incurred on behalf of its directors, officers and employees who were subpoenaed by the Securities and Exchange Commission during an investigation and subsequent lawsuit.
May 08, 2024
COMMENTARY: Bad Faith As A Substitute For Prejudice In Reinsurance Late Notice Disputes

By Robert M. Hall
May 13, 2024
9th Circuit Affirms No ‘Accident’ In Appeal Of Construction Insurance Dispute

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on May 13 affirmed in an unpublished memorandum a Nevada federal judge’s grant of an insurer’s motion for judgment on the pleadings in a coverage dispute with a contractor and a homeowners association (HOA), finding that the insurer was entitled to a declaratory judgment of no coverage because an “accident” had not occurred while the contractor worked on one of the HOA’s buildings.
May 13, 2024
U.S. High Court Refuses To Review Suit Alleging State Farm Agents Were Negligent

WASHINGTON, D.C. — The U.S. Supreme Court on May 13 denied insureds’ petition for a writ of certiorari seeking review of a Ninth Circuit U.S. Court of Appeals’ ruling that affirmed a lower federal court’s grant of an automobile liability insurer’s motion for summary judgment and denied the insureds’ motion to certify questions to the Montana Supreme Court in their lawsuit alleging that the insurer’s agents were negligent in failing to explain or offer underinsured motorist coverage when they purchased their automobile liability policies.
May 13, 2024
Insured Cannot Reassert Bad Faith Claim In Collapse Coverage Suit, Judge Says

PHILADELPHIA — A Pennsylvania federal judge denied an insured’s motion for leave to reassert a bad faith claim against its commercial property insurer in a dispute over coverage for the partial collapse of a building because the insured failed to show that the insurer’s reliance on the policy’s faulty workmanship exclusion to deny coverage was unreasonable.
May 13, 2024
Judgment Granted For Guaranty Association In Bad Faith Suit Over Hurricane Damage

LAFAYETTE, La. — A Louisiana federal judge granted the Louisiana Insurance Guaranty’s (LIGA) motion for summary judgment in a bad faith and breach of contract suit filed against a now-insolvent homeowners insurer over purported hurricane damage, finding that LIGA, which was substituted as a defendant for the insurer after it became insolvent, established that it was prejudiced by a lack of notice regarding the alleged damage.
May 10, 2024
Bad Faith Claim Against Homeowners Insurer In Water Damage Suit Cannot Proceed

HOUSTON — A bad faith claim alleged against a homeowners insurer in a water damage coverage dispute cannot proceed because none of the facts supports a finding that the insurer acted in bad faith in handling the insured’s claim for repair costs, a Texas federal judge said in partially granting the insurer’s motion for summary judgment.
May 10, 2024
Vermont Federal Judge Says Bifurcation Of Claims Is Not Warranted

BURLINGTON, Vt. — A Vermont federal judge denied a business auto insurer’s motion to bifurcate a breach of contract claim from a bad faith claim because any prejudicial effect on the insurer caused by trying both claims together will be mitigated if the jury finds that there was no breach of contract regarding the claim for underinsured motorist (UIM) benefits.
May 10, 2024
Defendants Renew Dismissal Arguments In Workers’ Comp Reimbursement Dispute

MONTGOMERY, Ala. — After an Alabama federal judge allowed the plaintiff to file an amended complaint in a dispute over reimbursement for workers’ compensation claims, the defendants started a new round of dismissal briefing regarding breach of contract, bad faith, laches and equitable estoppel claims.
May 09, 2024
Umbrella Insurer Failed To Show No Coverage Owed To Additional Insured, Judge Says

INDIANAPOLIS — An Indiana federal judge on May 8 denied an umbrella insurer’s motion for reconsideration of a summary judgment ruling on a breach of contract claim in a dispute over coverage for an additional insured for underlying lawsuits arising out of a gas explosion because the primary insured’s settlement with the underlying claimants did not extinguish coverage for the additional insured.
May 06, 2024
Insurer, Insureds Settle Water Damage Coverage Suit; Stipulation Of Dismissal Filed

DENVER — A homeowners insurer and its insureds filed a stipulation of dismissal in Colorado federal court following the settlement of the insureds’ breach of contract and bad faith suit arising out of the insureds’ water damage coverage claim.
May 06, 2024
Freddie Mac Dismisses Lead Insurer From D&O Coverage Dispute Over SEC Subpoena

WASHINGTON, D.C. — Federal Home Loan Mortgage Corp. (Freddie Mac) and its lead insurer on May 3 filed a joint stipulation asking a District of Columbia federal court to dismiss the insurer from Freddie Mac’s breach of contract and bad faith lawsuit seeking directors and officers liability coverage for underlying expenses it incurred on behalf of its directors, officers and employees who were subpoenaed by the Securities and Exchange Commission during an investigation and subsequent lawsuit.
May 06, 2024
Motion To Compel Granted In Bad Faith Row With Insurer Making Fraud Counterclaim

SEATTLE — A Washington federal judge on May 3 granted in part an insurer’s motion to compel more complete responses to interrogatories in a bad faith suit filed against the insurer that counterclaimed for a declaration that it has no obligation to cover the insured due to his purported fraudulent misrepresentations about his auto accident injuries, finding that the insurer made reasonable requests, including requests for the insured’s social media postings.
May 06, 2024
Insured Files Notice Of Appeal To 7th Circuit In Radiation Exposure Coverage Suit

MILWAUKEE — An insured filed a notice of appeal to the Seventh Circuit U.S. Court of Appeals, seeking review of a Wisconsin federal judge’s ruling that breach of contract and bad faith claims cannot proceed against two commercial general liability insurers because coverage is barred 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.
May 03, 2024
Federal Judge Finds No Jurisdiction In Construction Insurance Dispute, Remands

SAN FRANCISCO — A federal judge in California remanded to state court a construction insurance dispute brought by a contractor alleging that its insurer acted in bad faith when it refused to pay for most of an arbitration award related to a faulty roof, finding that the insurer failed to join necessary parties when removing the case to federal court.
May 03, 2024
Louisiana Panel Affirms Ruling In Suit Arising From Hurricanes Laura, Delta

LAKE CHARLES, La. — A Louisiana appeals panel affirmed a lower court’s ruling in favor of a church, its attorneys and its property insurer in a pro se litigant’s lawsuit alleging that they settled a hurricanes Laura and Delta property damage action in bad faith, finding that the lower court did not abuse its discretion in denying the appellant’s motion to recuse.
May 03, 2024
Insurer’s Dismissal Bid Granted In Estate’s Suit Seeking $4M Default Judgment

COLUMBIA, S.C. — A South Carolina federal judge dismissed with prejudice an estate’s bad faith suit against an insurer to enforce a $4 million default judgment the estate obtained against a nursing home regarding attempted sexual assault of a former resident, finding that the policy issued to the insured, a health care limited liability company, does not cover claims made against the nursing home, which is a purported subsidiary of the company.