Mealey's Insurance Bad Faith

  • May 29, 2024

    Bad Faith, Breach Of Contract Suit Stayed Until Appraisal Proceeding Is Completed

    HOUSTON — A Texas federal judge granted a motion to compel appraisal and to abate a lawsuit filed by insureds who claim that their homeowners insurer acted in bad faith and breached its contract in denying their claim for storm damages to their home because an appraisal proceeding will resolve the amount of the loss sustained by the insureds regardless of whether the loss was caused by the storm or by an excluded cause of loss.

  • May 29, 2024

    Winemaker Adds Bad Faith Claim In Washington Coverage Suit Over Defective Wine

    SEATTLE — A wine producer amended its complaint in a Washington court adding claims against its insurer for breach of the duty of good faith and fair dealing and violations of Washington’s Consumer Protection Act and the Insurance Fair Conduct Act in its lawsuit seeking coverage for the “tragic damage to 320,922 cases of premium Washington wine” that resulted in a loss of more than $8 million.

  • May 28, 2024

    Contractor, Insurer Seek Dismissal Of Coverage Claims After Settlement

    LOS ANGELES — A contractor and an insurer filed a joint stipulation of dismissal on May 24, seeking to bring an end to their dispute in a California federal court stemming from the contractor’s alleged failure to properly secure a building under construction in advance of a hurricane after they agreed to a settlement.

  • May 28, 2024

    Questions Of Fact Exist As To Cause Of Damaged Floor, Magistrate Judge Says

    MILWAUKEE — A Wisconsin federal magistrate judge denied an insured’s motion for partial summary judgment in a coverage suit stemming from the collapse of the insured’s roof because questions of fact exist regarding the cause of a heaved floor, discovered after the collapse, and whether any of the policy’s exclusions, including those pertaining to earth movement, subsurface water and defects, bar coverage for the damaged floor.

  • May 24, 2024

    Bad Faith Claims Proceed; Fact Issue Exists On Whether Additional Covered Is Owed

    LAKE CHARLES, La. — A homeowners insurer is not entitled to partial summary judgment on its insureds’ bad faith claims arising out of a dispute over coverage for hurricane damages because a question of fact exists as to whether additional payments were owed and withheld under the policy by the insurer, a Louisiana federal judge said.

  • May 24, 2024

    Suit Limitation Provision Bars Insureds’ Breach Of Contract, Bad Faith Suit

    PHILADELPHIA — Breach of contract and bad faith claims alleged against a homeowners insurer and based on the insurer’s handling of a claim for fire damages cannot proceed because the insureds failed to file suit within one year of the loss as required by the policy’s one-year suit limitation, a Pennsylvania federal judge said May 23 in dismissing the claims without prejudice.

  • May 24, 2024

    California Jury Awards Sisters $18M In Bad Faith Suit Over Flood Damage

    SAN BERNARDINO, Calif. — A California jury awarded two sisters $6 million in past noneconomic losses and $12 million in punitive damages after finding that insurers committed breach of contract and acted in bad faith in their handling of the insureds’ property damage claim arising from a 2019 flood.

  • May 23, 2024

    Insured’s Claim For Damages Cannot Succeed Without Breach Of Contract, Judge Says

    CHICAGO — An Illinois federal judge granted a commercial liability insurer’s motion for judgment on the pleadings after determining that the insured’s claim for damages under Illinois law based on an alleged unreasonable delay in handling the insured’s claim for underinsured motorist benefits cannot proceed because the insured’s breach of contract claim fails.

  • May 23, 2024

    Failure To Settle Medical Malpractice Claim Was Not Bad Faith, Federal Judge Says

    ROCKFORD, Ill. — A bad faith claim brought against a professional liability insurer for failing to settle an underlying medical malpractice claim prior to the entry of jury verdict award that was in excess of the policy limits must be dismissed because the evidence does not support a finding that the insurer acted in bad faith, an Illinois federal judge said in granting the insurer’s motion for summary judgment.

  • May 23, 2024

    Guaranty Association Answers Hurricane Damage Claims, Says Allegations Lack Facts

    NEW ORLEANS — The Louisiana Insurance Guaranty Association (LIGA) responded to a homeowner’s petition for damages by stating that the allegations against LIGA are not factual but are legal conclusions regarding the homeowner’s claims that his now-insolvent homeowners insurer, for which LIGA is successor in interest, failed to adequately compensate him for alleged losses related to Hurricane Ida.

  • May 22, 2024

    Parties In Bad Faith Suit Over Water Damage Report Unspecified Settlement

    PHOENIX — After an insured, insurer and reinsurer reported an unspecified settlement in a bad faith suit over water damage, an Arizona federal judge ordered that the case be dismissed with prejudice unless the notice of settlement is withdrawn or a stipulation to dismissal is filed by June 17.

  • May 22, 2024

    Insured’s Suit Remanded For Failure To Show Adjuster Was Fraudulently Joined

    OAKLAND, Calif. — Remand of an insured’s breach of contract and bad faith suit is warranted because the homeowners insurer and its adjuster failed to meet their burden of showing that the insured’s negligent misrepresentation claim against the adjuster is frivolous, a California federal judge said in granting the insured’s motion to remand.

  • May 21, 2024

    Insured Is Not Entitled To 2 Monthly Disability Payments, Massachusetts Panel Says

    BOSTON — A trial court properly found that an insured is not entitled to both total disability benefits and lifetime total disability benefits under a disability income policy because the policy clearly provides that lifetime total disability benefits are not payable until the maximum amount of total disability benefits is paid or until the insured’s 65th birthday, the Massachusetts Appeals Court said May 21 in affirming the trial court’s summary judgment order in favor of the insurer on breach of contract and bad faith claims.

  • May 21, 2024

    Insured Failed To Show Disability Insurer Acted With Reckless Disregard, Judge Says

    LOUISVILLE, Ky. — A Kentucky federal judge granted a disability insurer’s motion to dismiss an insured’s claims for violation of the Kentucky Unfair Claims Settlement Practices Act (KUCSPA) and breach of the covenant of good faith and fair dealing because the insured failed to show that the insurer acted with reckless disregard when it determined that the insured was entitled to only residual disability benefits and not total disability benefits.

  • May 17, 2024

    Connecticut Judge Strikes Claims Filed Against Insurer In Mold Damage Suit

    VERNON, Conn. — A Connecticut judge granted an insurer’s motion to strike bad faith, unfair trade practices and unjust enrichment claims because an additional insured who seeks coverage for mold and property damages related to the collapse of a hallway floor failed to sufficiently support the claims.

  • May 17, 2024

    Colorado Panel Says Trial Court Properly Applied Case Law In Auto Coverage Suit

    DENVER — A trial court properly applied Colorado case law when it denied an auto insurer’s  request to contest the liability of its own insured during a default judgment hearing involving an uninsured motorist because the insurer failed to make the required showing that its participation in the hearing was necessary to determine the issue of liability, the Colorado Division 7 Court of Appeals said May 16.

  • May 17, 2024

    Insured Seeks Damages Other Than Attorney Fees For Alleged Bad Faith, Judge Says

    SALT LAKE CITY — A Utah federal judge denied an auto insurer’s motion for partial summary judgment on a breach of the implied covenant of good faith and fair dealing claim, rejecting the insurer’s argument that the claim must be dismissed because the insured is seeking only attorney fees as damages.

  • May 17, 2024

    Additional Insured’s Request For Attorney Fees To Proceed In Chemical Coverage Suit

    ROCHESTER, N.Y. — An additional insured’s request for attorney fees and costs in a chemical exposure coverage dispute can proceed because the additional insured has alleged sufficient facts in support of its claim for breach of the implied covenant of good faith and fair dealing based on a breach of the insurance contract, a New York federal judge said in denying the insurer’s motion to dismiss and to strike.

  • May 16, 2024

    Judge Cleans Up Docket, Closes Hurricane Coverage Suit Against Insolvent Insurer

    LAKE CHARLES, La. — A Louisiana federal judge on May 15 issued an order administratively closing a homeowner’s breach of contract and bad faith suit over Hurricane Laura damage after the case had been stayed for almost a year due to the insurer’s insolvency, finding that “[n]early four years have passed since Hurricane Laura and the court wishes to clean up its docket.”

  • May 16, 2024

    Claims Against Life Insurer Related To Policy Conversion Fail, 3rd Circuit Says

    PHILADELPHIA — A district court properly granted summary judgment in favor of a life insurer because there is no evidence that the insurer breached its contract, acted in bad faith or made any misrepresentations regarding the policyholder’s options to convert a term life insurance policy to a whole life or universal life insurance policy, the Third Circuit U.S. Court of Appeals said in affirming the district court’s summary judgment ruling.

  • May 15, 2024

    Additional Insured Failed To Show Specific Jurisdiction Exists Over Insurer  

    SAN FRANCISCO — A California federal judge on May 14 granted, with leave to amend, an insurer’s motion to dismiss an additional insured’s bad faith complaint arising out of the insurer’s appointment of counsel to represent the additional insured and the insured in an arbitration proceeding in Texas because the additional insured failed to show that specific jurisdiction exists in California over the insurer.

  • May 15, 2024

    New Jersey Panel Reverses Ruling In Insurer’s Favor In Storm Damage Dispute

    TRENTON, N.J. — A New Jersey appeals court reversed a lower court’s summary judgment ruling in favor of an insurer in an insured’s breach of contract and bad faith lawsuit arising from storm damage claim, concluding that a construction company’s invoices sufficiently established a prima facie showing of disputed facts as to how much property damage was “causally related” to a fallen tree limb, preventing summary judgment.

  • May 15, 2024

    Insured’s Claim For Breach Of Duty Of Good Faith, Fair Dealing Dismissed

    CINCINNATI — An insured’s claim for breach of the duty of good faith and fair dealing alleged against a homeowners insurer cannot proceed because claims for breach of the duty of good faith and fair dealing in Ohio arise only in tort and not under a contract, an Ohio federal judge said May 14 in dismissing the claim.

  • May 15, 2024

    Coverage For Water Damages Limited To $10K Under Homeowners Policy, Panel Says

    HOUSTON — No additional coverage is owed under a homeowners policy for water damages caused by water pipes that burst as a result of power outages and freezing temperatures in the wake of Winter Storm Uri in Texas because the policy’s water damage endorsement clearly limits coverage under the policy to $10,000, the First District Texas Court of Appeals said May 14 in affirming a trial court’s ruling on breach of contract and extracontractual claims.

  • May 14, 2024

    Multifamily Housing Lessor Seeks Coverage For Antitrust Conspiracy Claims In MDL

    DENVER — A multifamily housing lessor insured sued its primary and excess data protection liability insurers in a Colorado federal court for breach of contract and bad faith, seeking coverage for an underlying multidistrict litigation alleging that it was involved in an antitrust conspiracy when it used a revenue management software to artificially inflate multifamily housing rents above market across the country.

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