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

Mealey's Insurance Bad Faith

April 30, 2025
Residents Sue State-Mandated Insurer ‘Of Last Resort’ Over Los Angeles Wildfires

LOS ANGELES — California residents sued the California Fair Plan Association (CFPA) and its largest members in a state court seeking damages for the defendants’ alleged bad faith breach of their property insurance policies following the Los Angeles wildfires in January.
April 30, 2025
Auto Insurer Owes Full Medical Payment Limit, S.C. Appeals Panel Reiterates

COLUMBIA, S.C. — The South Carolina Court of Appeals denied petitions for rehearing filed by an insured and an auto insurer in a breach of contract and bad faith suit and reissued its unpublished opinion affirming a lower court’s finding that the auto insurer breached its contract but did not act in bad faith in handling the insured’s medical payments claim.
April 30, 2025
Fact Issues Remain On Insured’s Extracontractual Claims In Water Damage Dispute

SEATTLE — An insurer is not entitled to summary judgment on an insured condominium association’s extracontractual claims because questions of fact exist regarding the reasonableness of the insurer’s interpretation of the policy language, the adequacy of the insurer’s claim investigation and the manner in which the insurer maintained the claim file, a Washington federal judge said in denying the insurer’s motion for summary judgment in a water damage coverage dispute.
April 30, 2025
Breach Of Contract, Bad Faith Claims Will Proceed Only On Insured’s Total Damages

NEW YORK — A New York justice determined that an insured is entitled to summary judgment on breach of contract and bad faith claims on the issue of the insurer’s liability under the policy; however, the justice said the insured is not entitled to summary judgment on the breach of contract and bad faith claims on the issue of the total damages owed to the insured following a fire because questions of fact exist regarding whether all or only some of the damages are covered under the property insurance policy.
April 29, 2025
Insurer Asks 5th Circuit To Reconsider Ruling In Bad Faith Suit Over Hurricane Laura

NEW ORLEANS — An insurer on April 28 asked the Fifth Circuit U.S. Court of Appeals to reconsider the part of its ruling that affirmed a lower federal court’s judgment in favor of a church insured in a bad faith lawsuit arising from Hurricane Laura damage, challenging the appellate court’s findings as to jurisdiction, appraisal and policy valuation and bad faith.
April 29, 2025
Questions Of Fact Exist On Damage In Water Leak Suit, Federal Judge Says

GALVESTON, Texas — A Texas federal magistrate judge recommended denying a homeowners insurer’s motion for summary judgment on breach of contract and bad faith claims after determining that questions of fact exist regarding the scope of damage caused by plumbing leaks in an insured home and whether the insurer’s denial of coverage was reasonable.
April 28, 2025
Former Surgeon, Insurer Stipulate To Dismissing Suit For LTD Benefits

TYLER, Texas — After previously reporting that they were “working on finalizing” an unspecified settlement, the parties in a former surgeon’s suit for long-term disability (LTD) benefits and relief for alleged mishandling of her claim on April 25 filed a joint stipulation of dismissal with prejudice in a Texas federal court.
April 28, 2025
Judge Dismisses Bad Faith Suit Over ‘Hidden Damage’ To Condos Following Settlement

SEATTLE — A federal judge in Washington dismissed with prejudice a condominium owners association insured’s breach of contract and bad faith lawsuit seeking coverage for the cost of repairing “hidden damage” to its condominiums after the insured and its property insurer announced that they reached a settlement.
April 23, 2025
On Remand, Judge Rules For Professional Liability Insurer On Bad Faith Claim

SALT LAKE CITY — On remand from the 10th Circuit U.S. Court of Appeals, a federal judge in Utah granted a professional liability insurer’s motion for summary judgment on the remaining bad faith claim in a coverage dispute arising from a medical malpractice lawsuit.
April 22, 2025
Discovery Spat In Bad Faith Indemnity Row Involves Reserve, Reinsurance Information

STATESVILLE, N.C. — In a reply brief urging a North Carolina federal court to compel certain discovery, the plaintiff in a bad faith suit over an excess liability insurer’s alleged duty to indemnify argues, among other things, that the insurer “makes bare assertions that reserve information and communications with reinsurers are subject to attorney-client privilege or attorney work product protection on a categorical basis.”
April 22, 2025
Citing No Diversity, Judge Remands Hurricane Ida Coverage Dispute To State Court

NEW ORLEANS — A Louisiana federal judge granted a homeowner’s motion to remand to state court a Hurricane Ida coverage dispute after the Louisiana Guaranty Association (LIGA) was added as a defendant, finding that due to the absence of complete diversity, “remand to state court is appropriate.”
April 21, 2025
Majority Reverses Ruling In Insurer’s Favor In Bad Faith Suit Over Fatal Shooting

ATLANTA — A majority of the 11th Circuit U.S. Court of Appeals on April 18 reversed a lower federal court’s grant of summary judgment in favor of an insurer in a lawsuit alleging that the insurer acted in bad faith when it failed to make a settlement offer in an estate’s lawsuit alleging negligent security against the insured, finding that a jury could reasonably find that the insurer knew or should have known that the insured’s liability was clear.
April 18, 2025
Statutory, Common-Law Bad Faith Claims Against Auto Insurer Fail, Judge Says

PHILADELPHIA — An insured’s statutory bad faith claim against an auto insurer is barred by the applicable two-year statute of limitations and the insured’s breach of contract and common-law bad faith claims also are barred from proceeding based on the insured’s acceptance of a settlement offer from the insurer, a Pennsylvania federal judge said in granting the auto insurer’s motion for judgment on the pleadings.
April 17, 2025
Breach Of Contract, Bad Faith Claims In Hurricane Damage Suit Dismissed

NEW ORLEANS — A Louisiana federal judge dismissed an insured’s breach of contract and bad faith suit stemming from a dispute over coverage for property damages sustained during a hurricane to a rental property because the insured failed to show that the damages are covered under a property insurance policy.
April 17, 2025
District Court Erred In Denying Insured’s Motion To Remand, 5th Circuit Says

NEW ORLEANS — A district court erred in denying an insured’s motion to remand because the insured’s claims against a nondiverse insurance agent named as a defendant in the insured’s breach of contract and bad faith suit can proceed because the insurance policy at issue did not require the insured to live in the property’s home rather than a travel trailer located on the property, the Fifth Circuit U.S. Court of Appeal said in reversing the lower court’s ruling on the motion to remand and in vacating the lower court’s order compelling arbitration.
April 16, 2025
Discovery Hearing Canceled In Bad Faith Suit Upon Liquidation Of Insurer

LAS VEGAS — In a docket-only minute order, a Nevada federal magistrate judge canceled a discovery hearing after previously issuing an order staying a bad faith suit against an insurer upon receiving notification that a Kansas state court entered a judgment of liquidation, finding the insurer insolvent.
April 16, 2025
5th Circuit Remands Attorney Fees Issue In Hurricane Laura Coverage Dispute

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals remanded two questions regarding attorney fees to a lower federal court and otherwise affirmed the judgment in favor of the church insured in a bad faith lawsuit arising from Hurricane Laura damage.
April 16, 2025
No E&O Coverage Owed For $262,500 Insured Paid To Hospital, 5th Circuit Affirms

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on April 15 affirmed summary judgment in favor of a managed care organization’s errors and omissions insurer in the insured’s bad faith lawsuit seeking coverage for the $262,500 it paid to a hospital to settle an underlying claim, finding that no coverage exists because the insured paid the underlying claim without the insurer’s prior consent.
April 16, 2025
Insureds Seek Coverage For 11 Suits Alleging Human Trafficking At Red Roof Hotels

COLUMBUS, Ohio — Insured hotel companies sued their general liability insurer in an Ohio federal court for breach of contract and bad faith, alleging that the insurer arbitrarily and capriciously denied coverage for 11 underlying lawsuits alleging that human trafficking occurred at various Red Roof hotels.
April 15, 2025
Settled Asbestos Defendant Blames Dilatory Resolution On Insurer’s Conduct Alone

NEW ORLEANS — An insurer misinterpreted and misrepresented the provisions of its own policy and the insurer’s actions delayed payment after a settlement in an asbestos case and it should not be rewarded for such bad faith conduct, an insured told a federal judge in Louisiana on April 14 in seeking to add a crossclaim for penalties and attorney fees.
April 15, 2025
Bad Faith Suit: CFPA Systematically Failed To Investigate, Pay Wildfire Claims

LOS ANGELES — Plaintiffs sued California Fair Plan Association (CFPA) and its “largest” members for breach of contract and bad faith in a California court, seeking compensation for their losses incurred by the January Los Angeles wildfires and to hold CFPA “accountable for its decade-long, systematic failure to properly investigate and pay wildfire claims.”
April 15, 2025
Skechers Seeks Coverage For Injury Claims Caused By Shoes’ Lack Of Slip-Resistance

LOS ANGELES — Skechers USA Inc. sued its commercial liability insurer in a California court for breach of contract, breach of the implied covenant of good faith and fair dealing and unfair competition, alleging that the insurer has a duty to defend it against an underlying action contending that class members were harmed by actual physical accidents caused by the insured’s shoes’ lack of slip-resistance or by the fact that the shoes were unusable.
April 14, 2025
Dismissal Bid Fought In Dispute Over Disability Policy ‘Age 65’ Language

PHOENIX — Arguing in part that the defendants’ “desired interpretation runs counter to the well-pleaded facts, the parties’ expectations, any reasonable consumer’s expectations, and decisional law,” a plaintiff on April 11 urged an Arizona federal court to deny dismissal of his putative class complaint over whether certain individual long-term disability (LTD) benefits must be paid through eligible insureds’ 65th birthdays.
April 14, 2025
Connecticut State Judge Refuses To Strike Insured’s Bad Faith Claim

BRIDGEPORT, Conn. — An insured’s bad faith claim against a property insurer can proceed because it is not clear from the facts alleged in the complaint if the insurer’s denial of coverage for a water damage claim was reasonable, a Connecticut state judge held in denying the insurer’s motion to strike the bad faith claim.
April 14, 2025
Insured’s Unfair Practices, Bad Faith Claims In Fire Damage Suit Will Proceed

HARTFORD, Conn. — A Connecticut federal judge denied a property insurer’s motion to dismiss an insured’s claims for bad faith and unfair trade practices after determining that the insured sufficiently alleged that the insurer’s conduct in handling a fire damage claim may have been part of a general business practice and may have constituted bad faith.