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

Mealey's Insurance Bad Faith

August 11, 2025
Insureds’ Breach Of Contract, Bad Faith Suit To Proceed Against Homeowners Insurer

HAMMOND, Ind. — An Indiana federal judge denied a homeowners insurer’s motion to dismiss breach of contract and bad faith claims in a storm damage coverage dispute after determining that the insureds allege sufficient facts to support the breach of contract and bad faith claims.
August 11, 2025
Insured Failed To Support Breach Of Contract Claim In Black Mold Coverage Suit

ABERDEEN, Miss. — A Mississippi federal judge granted a homeowners insurer’s motion for summary judgment on an insured’s claims in a coverage dispute over black mold growth in the insured’s home after determining that the insured failed to show what portion of the policy the insurer allegedly breached and failed to show that the insurer did not have a reasonable basis for its coverage decision.
August 11, 2025
Connecticut Judge Refuses To Strike Bad Faith Claims In Cryptocurrency Loss Suit

MILFORD, Conn.— A Connecticut judge denied a homeowners insurer’s motion to strike two claims for breach of the implied covenant of good faith and fair dealing in a coverage dispute arising from the insured’s cryptocurrency loss, finding that the insured has asserted specific conduct that indicates actions “with conscious bad faith design.”
August 11, 2025
Insureds Failed To Show Coverage Decision In Storm Damage Dispute Was Unreasonable

SAN ANTONIO — A Texas federal magistrate judge granted a homeowners insurer’s motion for summary judgment on extracontractual claims alleged by insureds seeking additional coverage for storm damage to their home after determining that the insureds failed to offer evidence showing that the insurer’s coverage decision was unreasonable.
August 08, 2025
Issues Of Fact Exist As To Cause Of Insureds’ Sagging Subfloor, Judge Says

FLORENCE, S.C. — A mobile home insurer is not entitled to summary judgment on breach of contract and bad faith claims because genuine issues of disputed fact exist regarding the cause of a sagging subfloor in the insureds’ mobile home, a South Carolina federal judge said.
August 08, 2025
Bad Faith, Unfair Trade Practices Claims Cannot Proceed Against Homeowners Insurer

RALEIGH, N.C. — An insured’s claims for bad faith and violations of North Carolina’s laws regulating unfair claims practices and deceptive trade practices cannot proceed against a homeowners insurer because the insured’s complaint asserts only that there was a reasonable disagreement about coverage for wet rot damage caused by a plumbing system leak in the insured’s home, a North Carolina federal magistrate judge said in granting the insurer’s motion for judgment on the pleadings.
August 07, 2025
Insured’s Bad Faith Suit Against Auto Insurer Will Proceed, Federal Judge Says

LOS ANGELES — A California federal judge denied an auto insurer’s motion to dismiss or stay an insured’s bad faith suit after determining that the bad faith claim alleged by the insured is not subject to arbitration and that a stay of the insured’s suit pending completion of the arbitration proceeding is not warranted.
August 07, 2025
Insureds Sufficiently Support Breach Of Contract, Bad Faith Claims, Judge Says

DENVER — Breach of contract and bad faith claims alleged against a homeowners insurer can proceed because the insureds stated sufficient facts to support a finding that the insurer’s refusal to pay for damages sustained to the insureds’ roof was a breach of contract and that the insurer’s conduct was not reasonable, a Colorado federal judge said in denying the insurer’s motion to dismiss.
August 05, 2025
Bifurcation Of Extracontractual Claims In Storm Damage Dispute Not Warranted

SHERMAN, Texas — Bifurcation of an insured’s breach of contract claim from the insured’s extracontractual claims is not warranted because the property insurer failed to meet its burden of showing that bifurcation would be economical or that the insurer would be prejudiced if the claims are tried together, a Texas federal magistrate judge said in denying the insurer’s motion.
August 05, 2025
Insured’s Breach Of Contract, Bad Faith Suit Will Remain In Federal Court

LOS ANGELES — An insured’s breach of contract and bad faith suit stemming from a dispute over coverage for the failure of a sump pump will remain in federal court because the insurer timely removed the suit within 30 days of recognizing that the amount in controversy met the federal jurisdictional minimum requirement, a California federal judge said.
July 31, 2025
Texas Panel Renders Take Nothing Judgment In Hurricane Harvey Coverage Suit

HOUSTON —A Texas appeals panel on July 31 reversed a lower court’s $643,000 final judgment against an insurer following a jury verdict in a coverage dispute over Hurricane Harvey damage and rendered judgment that the insured take nothing on his breach of contract and bad faith counterclaims against the insurer, holding that Ortiz v. State Farm Lloyds forecloses the insured’s counterclaims.
July 29, 2025
Insureds’ Water, Mold Damage Suit Dismissed Following Parties’ Settlement

CHICAGO — An Illinois federal magistrate judge dismissed an insureds’ breach of contract and bad faith lawsuit filed against a homeowners insurer seeking coverage for water and mold damage after the parties notified the court that a settlement was reached.
July 29, 2025
11th Circuit Affirms Judgment For Insurer, Cites Mayoral Affidavit Inconsistency

ATLANTA — The 11th Circuit U.S. Court of Appeals on July 28 affirmed a lower court’s order granting summary judgment to an insurer in a dispute with its insured over purported misrepresentations regarding a claim for vandalism to the insured’s home, finding in part that because the insured’s mayoral candidate affidavit in Brunswick, Ga., regarding his residency there was inconsistent with his insurance application representing Atlanta as his primary residence, “no reasonable jury” could find that these conflicting statements show “anything other than a knowing misrepresentation about his residency.”
July 29, 2025
7th Circuit: Insurer Breached Policy By Failing To Pay Full Appraisal Award

CHICAGO — The Seventh Circuit U.S. Court of Appeals concluded that a business insurer breached an insurance policy when it declined to pay the full appraisal award for the insured’s roof damage caused by a hailstorm, affirming a federal court’s grant of summary judgment in favor of the insured on its breach of contract claim.
July 29, 2025
Remand Denied In Breach Of Contract, Bad Faith Suit Against Homeowners Insurer

WILMINGTON, Del. — A federal judge in Delaware denied an insured’s motion to remand a breach of contract and bad faith suit arising out of a homeowners insurer’s denial of a water damage claim after determining that the insurer met its burden of showing that complete diversity of citizenship exists and that the federal jurisdictional amount-in-controversy requirement has been met.
July 28, 2025
Delaying Discovery In Bad Faith Suit Not Warranted, Utah Federal Judge Says

SALT LAKE CITY — A Utah federal judge denied an insurer’s motion to stay discovery until an opinion is issued on the insurer’s motion for summary judgment after determining that staying discovery will cause prejudice to the plaintiffs and will delay the resolution of the plaintiffs’ breach of contract and bad faith suit stemming from a claim for underinsured motorist (UIM) benefits.
July 25, 2025
Insureds Sufficiently Support Bad Faith Claim In Water Damage Suit, Judge Says

PHILADELPHIA — A bad faith claim alleged by insureds in a water damage coverage dispute can proceed because the insureds’ amended complaint alleges that the homeowners insurer’s denial of coverage was not reasonable based on the lack of evidence that the water damage was caused by a continuous leak, an excluded cause of loss, a Pennsylvania federal judge said July 24 in denying the insurer’s motion to dismiss the bad faith claim.
July 24, 2025
Bad Faith Claim Cannot Proceed In Collapse Coverage Suit, Federal Judge Says

PHILADELPHIA — An insured’s bad faith claim against a homeowners insurer in a dispute over coverage for the collapse of a floor within the insured’s home cannot proceed because the insurer’s reliance on its engineering reports in denying the insured’s claim was reasonable, a Pennsylvania federal judge said in granting the insurer’s motion for summary judgment.
July 24, 2025
Insured Not Permitted To Add Bad Faith Claim Against Auto Insurer

DENVER — A Colorado federal magistrate judge denied an insured’s motion to file an amended complaint to allege a bad faith claim against an auto insurer after determining that the insured failed to show good cause for the late request, filed less than two months before trial is scheduled to begin on the insured’s breach of contract claim.
July 24, 2025
8th Circuit Refuses To Reconsider Ruling In Storm Damage Dispute

ST. LOUIS —The Eighth Circuit U.S. Court of Appeals denied an insured’s assignee motion to rehear an earlier ruling that affirmed a lower federal court’s grant of summary judgment in favor of an insurer in the insured’s breach of contract and bad faith lawsuit arising from storm damage.
July 24, 2025
Bad Faith Claim Against Property Insurer In Hurricane Damage Suit Will Not Proceed

NEW ORLEANS — A Louisiana federal judge on July 23 granted a property insurer’s motion for summary judgment on an insured’s bad faith claim in a dispute over coverage for hurricane damages after determining that the insurer reasonably questioned the scope and cause of the insured’s damages.
July 23, 2025
Insurer Seeks Rehearing After 4th Circuit Finds Some Coverage Of Stucco Claims

RICHMOND, Va. — A commercial general liability insurer sought rehearing in the Fourth Circuit U.S. Court of Appeals after a panel of the Fourth Circuit found that the insurer owed no coverage to a general contractor for costs incurred repairing faulty stucco but that the trial court erred in dismissing as moot the contractor’s breach of contract and bad faith claims, arguing that the evidence does not support vacating the lower court’s denial of the contractor’s motion for partial summary judgment.
July 22, 2025
11th Circuit Affirms $1.75M Judgment For Insured In Bad Faith Storm Damage Row

ATLANTA — The 11th Circuit U.S. Court of Appeals on July 21 affirmed a $1.75 million judgment for an insured church in its bad faith and breach of contract dispute with its insurer over storm damage coverage, finding “no basis to revisit the evidentiary ruling” in which the lower court excluded evidence of alleged misrepresentation by the insured.
July 22, 2025
No Coverage Owed To Insured, Judgment Properly Entered For Insurer, Panel Says

SEATTLE — A district court properly entered summary judgment in favor of an insurer on breach of contract and extracontractual claims because no coverage is owed to the insured for an underlying property damage and environmental cleanup suit as the underlying suit did not arise out of an occurrence as required by the policies at issue, the Ninth Circuit U.S. Court of Appeals said July 21.
July 22, 2025
No Coverage Owed For Damaged AC Units Because Hotel Was Vacant, Panel Affirms

CHICAGO — The Seventh Circuit U.S. Court of Appeals determined that a lower federal court’s discovery sanctions against a hotel owner insured were “an appropriate, proportionate response” to the insured’s failure to produce requested documents as to the hotel’s occupancy and not an abuse of discretion, affirming a lower court’s ruling that there was no coverage owed for the hotel’s damaged air conditioner units because the hotel was vacant at the time of the vandalism and the insurer did not act in bad faith.