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

Mealey's Insurance Bad Faith

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SEATTLE — The Ninth Circuit U.S. Court of Appeals in a July 18 unpublished opinion affirmed a district court’s ruling in favor of an auto insurer, agreeing with the lower court’s determination that claims alleging violations of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.
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.