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

Mealey's Insurance Bad Faith

October 21, 2025
BlueCross, Excess E&O Insurer Stipulate To Dismiss Bad Faith, Breach Of Contract Suit

HARRISBURG, Pa. — Capital BlueCross and its excess errors and omissions insurer filed a stipulation in a Pennsylvania federal court seeking dismissal with prejudice of Capital BlueCross’ breach of contract and bad faith lawsuit arising from an underlying antitrust multidistrict litigation.
October 21, 2025
Summary Judgment Granted To Insurer; Bad Faith, Fraud Claims Dismissed

JACKSON, Miss. — A Mississippi federal magistrate judge entered final judgment dismissing a pro se employee’s bad faith and fraudulent misrepresentation claims with prejudice after granting an insurer’s summary judgment motion, finding that the state’s statutory workers’ compensation exclusivity provision precludes any recovery, that the employee failed to obtain a Mississippi Workers’ Compensation Commission determination declaring entitlement to disputed temporary total disability (TTD) benefits and that her fraud allegations lacked particularity.
October 20, 2025
Bad Faith Claim Against Insurers In Chemical Exposure Suit Barred By Ohio Precedent

CINCINNATI — A district court did not err in granting summary judgment in favor of two insurers on a bad faith claim in a coverage dispute stemming from the settlement of a chemical exposure lawsuit filed against the insured because the insurers’ settlement of the underlying suit within the policies’ limits bars the insured from asserting a bad faith claim pursuant to Ohio precedent, the Sixth Circuit U.S. Court of Appeals said.
October 20, 2025
Insureds Permitted To Amend Complaint To Add Bad Faith Claim, Federal Judge Says

CONCORD, N.H. — Insureds are permitted to amend their complaint to add a claim for bad faith against a homeowners insurer because the insureds learned of the facts underlying their bad faith claim only after the insurer produced its claim file in discovery, a New Hampshire federal judge said.
October 20, 2025
Mississippi High Court Denies Insurer’s Motion To Rehear Hurricane Katrina Suit

JACKSON, Miss. — The Mississippi Supreme Court declined an insurer’s request to rehear a majority’s ruling that affirmed a jury's $10,457,858.89 damages award against the insurer in a Hurricane Katrina coverage dispute, reversed the lower court’s denial of the insured’s estate’s posttrial motion for attorney fees and rendered $4,500,000 in attorney fees to the estate plus postjudgment interest, standing by its ruling that the lower court’s decision to force the estate to use nearly half of its award to pay attorney fees fails to adequately compensate them for bringing the bad faith action against the insurer.
October 20, 2025
Insured’s Water Damage Coverage Suit Cannot Proceed Based On Failure To Cooperate

HOUSTON — An insured’s breach of contract and extracontractual claims against her homeowners insurer cannot proceed because the insured breached the policy’s duty to cooperate provision by failing to provide the insurer with requested documents needed to adjust her water damage claim, a Texas federal judge said in granting the insurer’s motion for summary judgment.
October 20, 2025
Claims Against State Farm Agent Dismissed; Policyholder’s Remand Motion Denied

OKLAHOMA CITY — An Oklahoma federal judge denied a policyholder’s motion to remand and dismissed without prejudice her claims against a State Farm Fire and Casualty Co. captive agent, ruling that the agent was fraudulently joined because the policyholder received the replacement cost policy she requested, her alleged damages stemmed solely from State Farm’s claim handling and she failed to plead reliance or causation.
October 17, 2025
Insurers, New Orleans Property Owners Settle $7M Hurricane Claim

NEW ORLEANS — A group of foreign and domestic insurers and two New Orleans property owners jointly moved in Louisiana federal court to dismiss with prejudice the property owners’ claims for bad faith and for payment of approximately $7 million in damages to their properties caused by Hurricane Ida under surplus line insurance policies, after the court vacated a prior order compelling arbitration following a Louisiana Supreme Court ruling on the arbitrability of insurance claims.
October 17, 2025
Bad Faith, Financial Elder Abuse Claims Again Dismissed Without Prejudice

FRESNO, Calif. — A California federal judge granted a long-term care insurer’s motion to dismiss bad faith and financial elder abuse claims without prejudice after determining that the insured failed to specifically show how the insurer breached its contract when it denied the insured’s claim for benefits under the policy.
October 17, 2025
Partly Revived COVID Risk Disability Case Is Dismissed Per Joint Stipulation

FRESNO, Calif. — A disability case in which the Ninth Circuit U.S. Court of Appeals revived a breach of contract claim has been dismissed with prejudice by a California federal magistrate judge pursuant to a joint stipulation; an oral surgeon filed the suit after unsuccessfully seeking disability benefits on the grounds that his comorbid conditions and inability to access recommended personal protective equipment (PPE) made it necessary to close his practice early in the COVID-19 pandemic.
October 15, 2025
Texas Insurance Code Violation Claims Against Homeowners Insurer Fail, Judge Says

PECOS, Texas — An insured homeowner failed to present evidence showing that her insurer acted unreasonably in handling a claim for storm damage to her home, a Texas federal judge said in granting the homeowners insurer’s motion for partial summary judgment on claims alleging violations of the Texas Insurance Code.
October 15, 2025
Wisconsin Federal Judge Says Bifurcation Will Not Prejudice Insureds

MILWAUKEE — A Wisconsin federal judge granted a homeowners insurer’s motion to bifurcate a breach of contract claim from bad faith and statutory interest claims in a fire damage coverage dispute after determining that the insureds will not be prejudiced if the claims are bifurcated.
October 15, 2025
California ‘Insurer Of Last Resort’ Sued For Alleged Wrongful Denial Of Claim

LOS ANGELES — A homeowner whose property is covered by the California FAIR Plan sued the insurance pool in state court, alleging that the state’s “insurer of last resort” unlawfully denied coverage for fire, smoke and contamination damage in violation of California insurance law after his home was damaged in the Eaton Fire.
October 14, 2025
6th Circuit Majority Affirms Class Certification Order In Suit Against Auto Insurer

CINCINNATI — A Sixth Circuit U.S. Court of Appeals majority affirmed a district court’s class certification order in a suit alleging that an auto insurer breached its contract and acted in bad faith in determining a vehicle’s total loss value after determining that the insured had standing to bring the suit and met the necessary requirements to certify a class.
October 13, 2025
Judgment Granted For Insurer In Dispute Over $500K Life Policy For Homicide Victim

WILMINGTON, Del. — A Delaware federal judge on Oct. 10 granted summary judgment for an insurer in a life insurance policy beneficiary’s breach of contract suit against the insurer for failure to pay out the proceeds of a $500,000 life insurance policy after the insured’s murder, finding that the insurer “successfully” rescinded the policy.
October 08, 2025
High Court Asks Insurer To Respond To Insured’s Petition In PFAS Exposure Suit

WASHINGTON, D.C. — The U.S. Supreme Court requested that an insurer file a response brief to an insured’s petition for a writ of certiorari seeking review of the Sixth Circuit U.S. Court of Appeals’ finding that a district court erred in remanding a declaratory judgment claim and retaining jurisdiction over breach of contract and bad faith claims in a dispute over coverage for underlying per- and polyfluoroalkyl substances (PFAS) exposure suits.
October 08, 2025
Federal Judge Says Law Firm, Insurer Have Settled Cyber Crime Coverage Dispute

SEATTLE — A federal judge in Washington reported that a settlement has been reached in a law firm insured’s lawsuit seeking commercial cyber insurance coverage for a breach of the firm’s security measures, striking the June 1, 2026, trial date and ordering that dismissal and settlement papers be submitted by Dec. 5.
October 07, 2025
Judge Enters Dismissal After Parties Settle Hurricanes Laura, Delta Coverage Suit

LAKE CHARLES, La. — Seven days after a federal judge in Louisiana granted an insurer’s motion for partial summary judgment, the judge entered a 60-day judgment of dismissal after the parties filed a joint notice of settlement of the insureds’ breach of contract, bad faith and negligence lawsuit seeking coverage for property damage that was caused by Hurricanes Laura and Delta.
October 07, 2025
No Coverage For Drain Line Piping That Could Fail In Future, Judge Says

SAN ANTONIO — A Texas federal judge granted an insurer’s motion for summary judgment on a portion of an insured’s breach of contract claim related to coverage for repair costs incurred following a water leak at an insured restaurant because the policy at issue does not require the insurer to pay for drain line piping that may fail in the future.
October 07, 2025
Insureds Appeal Take-Nothing Judgment In Coverage Dispute Arising From Storm Damage

TYLER, Texas — Insureds filed a notice indicating that they are appealing a Texas federal court’s take-nothing judgment in favor of a commercial property insurer in a coverage dispute arising from property damage that was caused by a wind and hailstorm.
October 06, 2025
Common-Law Bad Faith Claim In Storm Damage Suit Will Proceed, Judge Says

SAN ANTONIO — An insured’s common-law bad faith claim alleged against a homeowners insurer can proceed because a question of fact exists regarding the reasonableness of the insurer’s investigation of the storm damage incurred at the insured’s home; however, a portion of the insured’s claim alleging violation of the Texas Insurance Code cannot proceed because the insured failed to show that the insurer made a misrepresentation on which the insured relied, a Texas federal judge said in partially granting and partially denying the insurer’s motion for summary judgment.
October 03, 2025
Federal Judge: Insurer Entitled To Rescission, Would Have Breached Duties Otherwise

CHICAGO — A federal judge in Illinois determined that an insurer was entitled to rescind a directors, officers and corporate liability insurance policy in a telecommunications business insured’s breach of contract and bad faith lawsuit arising from underlying allegations under the Illinois False Claims Act (IFCA), concluding that the insurer would have breached its duties to defend and indemnify the insured had it not been entitled to rescission.
October 03, 2025
Bad Faith Coverage Case Dismissed After Insurer Granted Summary Judgment

ABILENE, Texas — A Texas federal judge adopted a magistrate judge’s recommendation to grant summary judgment to an insurer and dismiss with prejudice a policyholder’s breach of contract, bad faith and statutory claims arising from a hail damage coverage dispute, finding that the policyholder failed to distinguish covered hail damage from noncovered causes under Texas’ concurrent causation doctrine.
October 03, 2025
Insured Fails To Show How Auto Insurer’s Conduct Constitutes Bad Faith, Judge Says

SCRANTON, Pa. — A Pennsylvania federal judge dismissed without prejudice a bad faith claim alleged against an auto insurer after determining that the insured’s complaint fails to provide sufficient facts detailing how the insurer’s refusal to tender the policy limit constitutes bad faith.
October 02, 2025
11th Circuit Says Auto Insurer Did Not Act In Bad Faith In Handling Insured’s Claim

ATLANTA — A district court properly entered summary judgment in favor of an auto insurer because the insured’s assignee failed to show that the insurer acted in bad faith in investigating an auto accident in which its insured was involved or in handling settlement negotiations on behalf of its insured, the 11th Circuit U.S. Court of Appeals said.