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

Mealey's Insurance Bad Faith

December 18, 2023
Panel Affirms More Than $25M Judgment Against Insurer In Construction Defects Suit

COLUMBIA, S.C. — The South Carolina Court of Appeals affirmed a trial court’s judgment of more than $25 million against a commercial general liability insurer, agreeing with the lower court’s finding that an insured breached its contract and acted in bad faith in refusing to defend its insured subcontractor and a general contractor, named as an additional insured, against underlying construction defects suits arising out of water damage to townhomes because the evidence shows that all of the parties believed that the policies provided coverage for completed operations.
December 15, 2023
Court ‘Wrongly Expanded’ Electronic Data Exclusion, Home Depot Tells 6th Circuit

CINCINNATI — Home Depot Inc. filed an appellant brief in the Sixth Circuit U.S. Court of Appeals challenging an Ohio federal court’s finding that a commercial general liability insurance policy’s electronic data exclusion bars coverage for the retailer’s losses stemming from a 2014 data breach, arguing that the lower court “wrongly expanded the narrow electronic-data exclusion beyond its natural meaning, based on assumed facts outside the record.”
December 15, 2023
No Coverage Owed For $20M Wrongful Death Default Judgment, California Panel Affirms

SAN DIEGO — A California appeals panel held that an insured would not reasonably expect that his son’s conduct that resulted in a fatal shooting would fall under a homeowners insurance policy’s scope of coverage for an “accident” and outside the intentional acts exclusion, affirming a lower court’s ruling in favor of insurers in a breach of contract and bad faith lawsuit seeking coverage for an underlying $20 million wrongful death default judgment.
December 15, 2023
Plaintiffs: Humana Uses Artificial Intelligence, Denies Senior Care In Bad Faith

LOUISVILLE, Ky. — Humana Inc. denies elderly patients Medicare Advantage Plan coverage to which they are entitled through the employment of artificial intelligence in place of actual doctors, plaintiffs claim in a class action filed in a Kentucky federal court.
December 15, 2023
Insureds Breached Terms Of Policy By Failing To Provide Proof Of Loss, Judge Says

SACRAMENTO, Calif. — Insureds’ claims for breach of contract and bad faith against their homeowners insurers in a dispute over damages and losses caused by a California wildfire cannot proceed because the insureds breached the terms of the insurance policy by failing to file a proof of loss for their personal property losses, a California federal judge said in granting the insurers’ motion for summary judgment.
December 15, 2023
Bad Faith, Violations Of New Mexico Law Claims Dismissed Against Auto Insurer

ALBUQUERQUE, N.M. — An insured’s claims for bad faith and violations of New Mexico law must be dismissed because the insured failed to offer sufficient facts in support of the claims alleged against her auto insurer, a New Mexico federal judge said in granting the auto insurer’s motion to dismiss the claims without prejudice.
December 14, 2023
Israeli Law Raised In Feedback On Liquidation Plan For Vesttoo And Its Affiliates

WILMINGTON, Del. — In two Dec. 13 filings citing Israeli law and other issues, Vesttoo Ltd. and its affiliated debtors and a venture capital organization and individual that report significant related interests urge a Delaware federal bankruptcy court not to approve a Chapter 11 plan of liquidation and related arrangements as currently proposed.
December 14, 2023
Bad Faith, Punitive Damages Claims Against Auto Insurer Properly Dismissed

JACKSON, Miss. — A trial court did not err in dismissing insureds’ claims for bad faith and punitive damages against an auto insurer because the insurer met its burden of showing that it had a reasonable basis for denying the insureds’ claim for damages to their vehicle caused by a theft and the insureds failed to prove that the insurer’s denial was unreasonable, the majority of the Mississippi Court of Appeals said in affirming a trial court’s ruling.
December 14, 2023
Louisiana Federal Judge Dismisses Hurricane Coverage Suit After Counsel Suspension

LAFAYETTE, La. — A Louisiana federal judge dismissed a hurricane coverage suit, concurring with a magistrate judge’s report and recommendation to grant a homeowner’s motion for dismissal against his now-insolvent insurer after the judge suspended the homeowner’s legal counsel for purported insurance fraud related to alleged misconduct in filing hurricane-coverage suits.
December 14, 2023
Insured’s Remand Bid Denied In Hurricane Coverage Row With Insurer In Receivership

NEW ORLEANS — A Louisiana federal judge denied a homeowner’s motion to remand to state court his breach of contract and bad faith suit against his now-insolvent insurer alleging that the insurer failed to cover damage from Hurricane Ida, finding that because the homeowner did not amend his complaint to add the Louisiana Insurance Guaranty Association (LIGA) as a defendant, there is still “complete diversity between the parties.”
December 14, 2023
Bifurcation Of Bad Faith Claim In Wildfire Coverage Suit Not Warranted, Judge Says

SAN FRANCISCO — Bifurcation of a bad faith claim from a breach of contract claim in a dispute over coverage for property damages sustained by an insured’s wineries during four California wildfires is not warranted, a California federal judge said after determining that judicial efficiency would not be served through bifurcation and that any potential prejudice to the insurer incurred by trying both claims together could be avoided by issuing clear and limited jury instructions.
December 13, 2023
Washington Panel Remands For New Trial On Insured’s Claims Against Auto Insurer

SEATTLE — A trial court erred in entering a directed verdict on an insured’s claims for breach of contract, bad faith, negligence and violations of Washington law because the trial court failed to consider evidence presented in the insured’s negligence suit against the tortfeasor and failed to account for the evidence presented by the insured in support of her claims against the auto insurer, a panel of the Division I Washington Court of Appeals said in reversing and remanding for a new trial on the claims against the auto insurer.
December 12, 2023
Bad Faith, Negligence Claims Bifurcated For Trial But Not For Discovery, Judge Rules

ANCHORAGE, Alaska — An Alaska federal judge determined that claims for bad faith and negligent claims adjustment should be bifurcated for trial purposes but determined that a stay of discovery on the claims for bad faith and negligent claims adjustment is not warranted.
December 12, 2023
Magistrate Grants Motion To Compel In Bad Faith Suit Over $4M STOLI Policy

LINCOLN, Neb. — A Nebraska federal magistrate judge granted an insurer’s motion to compel the production of documents in a breach of contract and bad faith suit filed against the insurer by Wells Fargo Bank, the securities intermediary for an account holder of a purported stranger originated life insurance (STOLI) policy, finding that even if the insurer’s “conduct was inequitable,” the insurer is “entitled to discover evidence of” purported “inequitable conduct” by Wells Fargo.
December 07, 2023
COMMENTARY: Fire & Rain: 2023 Key Decisions & Developments Impacting The Wide World Of Insurance

By Scott M. Seaman, Pedro E. Hernandez and Lisa M. Roccanova
December 08, 2023
Home Inspector Can Testify In Dispute Over Insurance Payout, Repairs

TULSA, Okla. — A federal magistrate judge in Oklahoma on Dec. 7 denied an insured couple’s motion to exclude expert testimony by a property inspector who was hired by the insurer to review work done on a home damaged by a storm after the couple filed a breach of contract suit against the insurer.
December 08, 2023
Elder Abuse Suit Against LTC Insurer Tossed For Not Following Reimbursement Terms

SAN FRANCISCO — A California federal judge dismissed without leave to amend a bad faith, breach of contract, anticipatory breach of contract and elder abuse suit filed against a couple’s long-term care (LTC) insurer for its failure to cover the wife’s claim for benefits, finding that “[t]he fundamental problem with their claims is that the insurance policy in question is a reimbursement policy” and the couple failed to incur or submit covered expenses for reimbursement.
December 08, 2023
Faulty Work Isn’t An Accident, Doesn’t Trigger Policy, Insurer Says

LAS VEGAS — An insurer told the Ninth Circuit U.S. Court of Appeals that neither a contractor found by an arbitrator to have breached a contract nor the homeowner association to which it assigned its rights was entitled to coverage for faulty work and that contrary to their arguments, there was nothing ambiguous about the term “accident.”
December 08, 2023
Limitation In Disability Income Policy Is Ambiguous, Claimant Tells 9th Circuit

SAN FRANCISCO — A district court erred in finding that a disability income insurer correctly reduced the claimant’s disability income benefits according to the terms of the disability income policy because the policy’s monthly benefit limitation is ambiguous and, therefore, must be construed in favor of the claimant, a disability claimant says in an appellant brief filed in the Ninth Circuit U.S. Court of Appeal.
December 06, 2023
Federal Judges Tosses D&O Coverage Suit After Parties Move For Dismissal

WILMINGTON, Del. — A federal judge in Delaware dismissed a directors and offices coverage dispute arising from an underlying investigation by the Securities and Exchange Commission after the insured and the insurer stipulated to dismissal of the entire action.
December 04, 2023
Insureds’ Motion To Remand Breach Of Contract, Bad Faith Suit Denied

BATON ROUGE, La. — A Louisiana federal judge adopted a report recommending the denial of a motion to remand a hurricane damage coverage suit filed by insureds against a homeowners insurer, agreeing with the magistrate judge’s finding that complete diversity of citizenship exists because the insureds’ claims against a non-diverse, Louisiana insurance agent fail.
December 04, 2023
Insureds’ Amendments To Breach Of Contract, Bad Faith Claims Permitted

HAMMOND, Ind. — An Indiana federal magistrate judge granted a motion for leave to file a second amended complaint against excess insurers in a dispute over coverage for an underlying negligence suit after determining that amending the complaint to add additional facts in support of breach of contract and bad faith claims would not be futile.
December 04, 2023
Questions Of Fact Regarding Cause Of Water Damage Exist, Calif. Federal Judge Says

LOS ANGELES — An insured’s claims for breach of contract and bad faith can proceed against a homeowners insurer because questions of fact exist as to whether water damage in the insured’s home was caused by wear and tear, an excluded cause of loss, and whether the insurer’s investigation of the claim was reasonable, a California federal judge said in denying the insurer’s motion for summary judgment.
December 01, 2023
Delaware Judge Denies Assignees’ Motion To Compel In Wrongful Death Coverage Suit

NEW CASTLE, Del. — A Delaware judge refused to compel a homeowners insurer to produce the claim file of a convicted murderer’s parents in a breach of contract and bad faith lawsuit seeking coverage for an underlying wrongful death lawsuit that resulted in a $15,816,580 arbitration award, finding that the murderer’s assignees failed to demonstrate that the parents’ claim file is relevant to the coverage lawsuit.
November 30, 2023
Appraisal Award In Remediation Suit Was Not Valid, Texas Panel Says In Reversing

AMARILLO, Texas — While “dancing with oneself may have been acceptable to Billy Idol,” two appraisers “needed to tango together to have a viable appraisal award,” the Seventh District Texas Court of Appeals said in finding that a trial court erred in entering summary judgment for a homeowners insurer on a breach of contract claim in a remediation coverage suit because the appraisal award was not valid as both appraisers did not agree on the award.