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

Mealey's Insurance Bad Faith

March 03, 2025
Bad Faith Claim Fails Based On Waiver Of UM/UIM Coverage, Judge Says

LAFAYETTE, La. — A bad faith claim against an employer’s auto insurer cannot proceed because no uninsured motorist (UM) coverage is owed to the employee based on the employer’s waiver of uninsured/underinsured motorist (UM/UIM) coverage, a Louisiana federal judge said in granting the auto insurer’s motion for summary judgment.
March 03, 2025
Choice-Of-Law Ruling Issued In Disability Insurance Suit In Federal Court

NEW HAVEN, Conn. — Granting an insurer’s motion for partial judgment on the pleadings in a suit challenging the discontinuation of long-term disability (LTD) benefits, a Connecticut federal judge ruled that the “tort, equity, and contract claims under the common law are not governed by California law” and that three California and North Carolina statutory claims fail as a matter of law.
March 03, 2025
Bad Faith Claim Cannot Proceed Because Genuine Dispute Exists On Coverage

LAS VEGAS — A bad faith claim alleged against an auto insurer cannot proceed because a genuine dispute exists over whether coverage is afforded for an underinsured motorist (UIM) benefits claim, a Nevada federal judge said in granting the auto insurer’s motion for summary judgment on the claim.
March 03, 2025
Homeowner Amends Complaint Against Insurer In Black Mold Coverage Suit

ABERDEEN, Miss. — Consistent with a Mississippi federal judge’s order, an insured homeowner filed an amended complaint against her homeowners insurer, clarifying the date on which the insured was forced to move out of her home as a result of black mold growth.
February 27, 2025
Breach Of Contract, Bad Faith Claims Proceed In Storm Damage Coverage Suit

LOS ANGELES — Summary judgment in favor of a homeowners insurer on breach of contract and bad faith claims is not warranted in a dispute over coverage for storm damages because the parties have not conducted any discovery, a California federal judge said in denying the insurer’s motion.
February 27, 2025
Fact Issue Precludes Summary Judgment In Disability Claimant’s Favor, Judge Says

PHOENIX — Summary judgment in favor of a disability claimant on a breach of contract claim is not warranted because the claimant killed his own motion with “factual friendly fire” by introducing evidence that questions whether the disability insurer terminated the claimant’s benefits based on the available medical evidence or purposefully withheld evidence to prevent its reviewing physicians from finding that the claimant remained disabled, an Arizona federal judge said.
February 25, 2025
Louisiana High Court Refuses To Review Ruling In Hurricane Ida Coverage Dispute

NEW ORLEANS — The Louisiana Supreme Court on Feb. 25 denied an insured’s application for writ of certiorari seeking review of a First Circuit Louisiana Court of Appeal panel majority’s holding that a lower court properly interpreted the state Legislature's amendment of Louisiana Revised Statutes Section 22:1892(H) by Act 290 to be a procedural change that applied retroactively and, as a result, eliminated any class action for damages, including bad faith penalties, brought against the state’s insurer of last resort.
February 24, 2025
Judge Refuses To Dismiss Construction Company’s Cross-Claims Against CGL Insurer

SACRAMENTO, Calif. — A federal judge in California denied a commercial general liability insurer’s motion to dismiss a construction company insured’s cross-claims for breach of contract, breach of the implied covenant of good faith and fair dealing and equitable contribution as assignee of an excess insurer that funded its $2,250,000 settlement of an underlying construction defects lawsuit.
February 20, 2025
Rhode Island High Court Says Judgment Properly Entered For Homeowners Insurer

PROVIDENCE, R.I. — A lower court properly entered summary judgment in favor of a homeowners insurer because the insureds’ assignee failed to offer sufficient evidence showing that the insurer’s handling of its insureds’ storm damage claim constituted a breach of contract or bad faith, the Rhode Island Supreme Court said in affirming the lower court’s ruling.
February 18, 2025
Federal Judge Dismisses Subcontractor’s Suit Against Insurer After Parties Settle

OAKLAND, Calif. — A federal judge in California dismissed with prejudice a subcontractor insured’s breach of contract and bad faith lawsuit against its commercial liability insurer one day after the parties indicated that they have executed their settlement agreement.
February 18, 2025
Insured Permitted To Amend Complaint In Black Mold Coverage Suit

ABERDEEEN, Miss. — A Mississippi federal judge granted an insured’s motion for leave to file an amended complaint against a homeowners insurer to clarify the date on which the insured was forced to move out of her home as a result of black mold growth because the date is necessary to clarify before a decision can be made as to whether the insured’s claims against the insurer are barred by the applicable statute of limitations.
February 18, 2025
Oral Arguments Set In Dispute Over Applicability Of Radioactive Materials Exclusion

CHICAGO — The Seventh Circuit U.S. Court of Appeals will hear oral arguments on April 10 in an insured’s appeal of a district court’s ruling that no coverage is owed by insurers 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.
February 18, 2025
10th Circuit Rejects Condo Developer’s Petion For Panel Rehearing

DENVER — The 10th Circuit U.S. Court of Appeals denied a condominium developer’s petition seeking a panel rehearing of the court’s grant of a new trial following its reversal of a $2.54 million jury award in favor of the developer after finding that the developer cannot recover under a builders risk insurance policy for repair costs of a cracked concrete slab that it has not paid and has no obligation to pay.
February 13, 2025
COMMENTARY: The Top Twelve Insurance Coverage Decisions Of 2024

By Robert D. Chesler, Seán McCabe, Madilynne Lee and James A. Goodridge
February 14, 2025
Insurer’s Dismissal Motion Partially Denied In Suit Alleging It Illegally Employs AI

MINNEAPOLIS — A federal magistrate judge in Minnesota on Feb. 13 granted in part and denied in part an insurer’s motion to dismiss a class complaint alleging it illegally uses artificial intelligence (AI) to deny elderly insureds medically necessary care based on a model that the insurer knows “has a 90% error rate,” allowing breach of contract and breach of implied covenant of good faith and fair dealing claims to proceed.
February 14, 2025
Panel: No Coverage For Unfair Competition Suit Against Furniture Delivery Company

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals determined that an insurer has no duty to defend its furniture delivery company insured against an underlying misappropriation of trade secrets and unfair competition lawsuit brought by a competitor, affirming a lower federal court’s grant of the insurer’s motion for summary judgment in the insured’s breach of contract and bad faith lawsuit.
February 14, 2025
Reconsideration Of Order On Extracontractual Claims Is Warranted, Insurer Says

SEATTLE — A Washington federal judge should reconsider a decision that found that the insureds’ extracontractual claims are timely because the extracontractual claims are moot based on the insurer’s payment of an appraisal award, a homeowners insurer maintains in a motion for reconsideration.
February 13, 2025
Breach Of Fiduciary Duty Claim Against Insurer Is Duplicative Of Bad Faith Claim

SEATTLE — An insured’s claim for breach of fiduciary duty against a homeowners insurer must be dismissed because the claim is duplicative of the insured’s claim for breach of the duty of good faith and fair dealing, a Washington federal judge said in granting the insurer’s motion to dismiss the claim.
February 13, 2025
Insurer’s Payment Forecloses Bad Faith Claims, Not TPPCA Claims, Panel Says

NEW ORLEANS — A district court’s judgment in favor of an insurer on an insured’s claim for violation of the Texas Prompt Payment of Claims Act (TPPCA) must be vacated because the insurer is not absolved from liability under the TPPCA simply because it paid an appraisal award in full; however, the district court’s judgment in favor of the insurer on the insured’s bad faith claims must be affirmed because the insured’s payment of the appraisal award forecloses the insured’s bad faith claims, the Fifth Circuit U.S. Court of Appeals said.
February 13, 2025
Suit Tossed For No Jurisdiction Absent Evidence Of Website Targeting Residents

JACKSON, Miss. — A Mississippi federal judge dismissed a breach of contract and bad faith suit against an international travel insurer and its purported agent over the insurer’s failure to reimburse medical expenses, finding that because the insured failed to provide evidence showing that the insurer’s website was designed to specifically target Mississippi residents, the court lacks personal jurisdiction over the insurer.
February 13, 2025
Negligent Misrepresentation Claim Cannot Proceed Against Insurance Agency

SAN JOSE, Calif. — A California federal judge granted an insurance agency’s motion to dismiss a negligent misrepresentation claim in a breach of contract and bad faith suit arising out of the denial of a fire damage claim because the insureds failed to provide any specific information regarding the agent who allegedly made a misrepresentation and failed to provide any details regarding the insureds’ interaction with the agent.
February 12, 2025
Partial Dismissal Granted In Hail Damage Coverage Row Over Roof Tile Replacement

DENVER — A Colorado federal judge on Feb. 11 granted in part homeowners’ motion to dismiss a misrepresentation counterclaim in a breach of contract suit against their homeowners insurer over the cost to repair their hail-damaged roof, finding that though the counterclaim failed to allege knowing misrepresentation, the homeowners failed to provide any argument to support their request for dismissal with prejudice.
February 12, 2025
Panel Reverses Attorney Fees Award In Octogenarian’s Bad Faith Suit Over Hail Damage

FORT WORTH, Texas — A Texas appeals panel reversed and remanded a trial court’s award of appellate attorney fees in favor of an octogenarian insured in her bad faith lawsuit seeking coverage for her roof damage caused by hail and wind and affirmed the remainder of the lower court’s judgment, finding that the evidence was sufficiently strong to support the jury's conclusion that the insurer knowingly took advantage of the insured’s “‘lack of knowledge, ability, experience, or capacity . . . to a grossly unfair degree.’”
February 11, 2025
Reinsurer Voluntarily Dismisses Suit Concerning Alleged Claims Mishandling

BILLINGS, Mont. — A Bermuda-based reinsurer that sought declaratory judgment and damages for claims that it alleged were mishandled and misallocated has filed a notice of dismissal without prejudice in Montana federal court regarding its suit against an insurer and third-party administrator (TPA).
February 11, 2025
Insurer Maintains No Coverage Owed For Remediation Costs

ALBUQUERQUE, N.M. — No coverage is owed for investigation and remediation costs as a result of contamination discovered at and near the site of an insured dry cleaning business because no suit has been filed against the insured and because the policy pollution exclusion bars coverage, an insurer says in its reply in support of its motion for summary judgment filed in New Mexico federal court.