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

Mealey's Insurance Bad Faith

May 16, 2025
8th Circuit Affirms Ruling In Insurer’s Favor In Bad Faith Suit Over Storm Damage

ST. LOUIS — The Eighth Circuit U.S. Court of Appeals affirmed a lower federal court’s grant of summary judgment in favor of an insurer in an insured’s assignee’s breach of contract and bad faith lawsuit arising from storm damage, concluding that the insured sought “to advance a novel agency theory on appeal” but there is no reason for the insured’s failure to raise this argument in the lower court and “no manifest injustice in this court declining to entertain the argument for the first time on appeal.”
May 16, 2025
Professional Liability Insurer’s Defense Withdrawal Was Not Breach Of Contract

PHILADELPHIA — A professional liability insurer did not breach its contract or act in bad faith in withdrawing its defense of an insured in an underlying wrongful death suit because the policy clearly precludes coverage as the underlying claims arose out of the actions of a doctor who is specifically excluded from coverage under the policy, a Pennsylvania federal judge said in granting the insurer’s motion to dismiss.
May 16, 2025
Hospital Indemnity Insurer Did Not Breach Contract Based On Payment To Insured

NEW ORLEANS — A district court properly dismissed breach of contract and bad faith claims against a group hospital indemnity insurer because the insurer ultimately paid the insured’s claim for an overnight hospital stay and the insurer did not act in bad faith in handling the insured’s claim, the Fifth Circuit U.S. Court of Appeals said.
May 15, 2025
Panel Reverses Bad Faith Ruling, Says Title Insurer Failed To Act In Good Faith

SAN JOSE, Calif. — The California Sixth District Court of Appeal reversed a trial court’s ruling in favor of a title insurer on an insured’s bad faith claim after determining that the insurer breached its implied covenant of good faith and fair dealing when it refused to defend the insured because the insurer failed to consider all of the available facts related to the insured’s claim before denying a defense.
May 15, 2025
Special Master Imposes $31,100 In Costs After Attorneys’ AI Briefing Errors

LOS ANGELES — Two firms for plaintiffs in a bad faith insurance suit must pay $26,100 in special master fees and another $5,000 for defense costs after submitting an artificial intelligence-assisted supplemental brief with nine erroneous cites across 10 pages, a special master appointed in a federal court in California said while striking the brief and denying the plaintiffs any requested discovery relief.
May 14, 2025
Wisconsin Panel Affirms Judgment For Insurer In Fire Coverage Dispute With Insured

WAUSAU, Wis. — A Wisconsin Court of Appeals on May 13 affirmed a lower court’s grant of summary judgment to a homeowners insurer in a dispute over coverage for wood stove-related fire damage and alleged misrepresentations about the usability of the stove, finding that the insured breached his insurance policy by not sitting for an examination under oath (EUO) before suing his insurer.
May 14, 2025
Insured’s Bad Faith Suit To Remain In Washington Federal Court, Judge Says

SEATTLE — An insured’s breach of contract and bad faith suit arising out of a dispute over the insured’s claim for water damages in her home will stay in federal court because the homeowners insurer timely filed a notice of removal after learning that the amount in controversy exceeds the federal jurisdictional amount of $75,000.
May 14, 2025
Bad Faith Claims Bifurcated From Breach Of Contract Claim In Disability Suit

LOUISVILLE, Ky. — A Kentucky federal judge granted a disability income insurer’s motion to bifurcate an insured’s breach of contract claim from the insured’s bad faith claims after determining that bifurcation will promote judicial efficiency because the bad faith claims are dependent on the success of the breach of contract claim.
May 14, 2025
Breach Of Contract, Bad Faith Claims Proceed In Storm Damage Suit

OKLAHOMA CITY — An insured’s breach of contract, bad faith and punitive damages claim against a homeowners insurer can proceed because questions of fact exist regarding whether the insured’s roof was damaged by hail during a storm, whether coverage exists for the damage and whether the insurer’s conduct in handling the claim was reasonable, an Oklahoma federal judge said in denying the insurer’s motion for summary judgment.
May 13, 2025
Deal Reported After Partial Summary Judgment Bids Fail In LTD Row

SANTA ANA, Calif. — Days after a California federal judge denied competing motions for partial summary judgment in a lawsuit asserting bad faith and breach of contract claims over calculation of long-term disability (LTD) benefits, the parties told the court they reached an unspecified settlement.
May 13, 2025
Bad Faith, Breach Of Contract Claims Permitted Against Excess Insurers, Judge Says

SAN FRANCISCO — An insured seeking coverage for the seizure of its crude oil tanker by Iranian military forces is permitted to amend and supplement a counterclaim against its excess insurers to assert claims for breach of contract and bad faith because good cause for the amendment exists based on the excess insurers’ belated production of discovery documents, a California federal judge said in granting the insured’s motion to amend and supplement its counterclaim.
May 13, 2025
Judge: Reinsurance Info Is Relevant In Cyberattack Coverage Lawsuit

BALTIMORE — A media company that sued excess insurers it alleges owe millions in connection with an October 2021 cyberattack has obtained a mixed ruling on discovery disputes, with a Maryland federal magistrate judge concluding in part that “reinsurance policies, as well as related documents and communications, are relevant to [the plaintiff’s] bad faith claim and should be produced.”
May 12, 2025
Federal Judge Denies Insurer’s Motion For Judgment In Bad Faith, Lead Injury Suit

ST. LOUIS — In a May 9 docket note, a Missouri federal judge overruled an insurer’s motion for judgment as a matter of law submitted at the close of evidence in a jury trial on an insured’s claim for bad faith refusal to settle in a coverage dispute over underlying personal injury claims stemming from the insured’s lead-smelting operations.
May 12, 2025
Production Of Reinsurance Agreement Ordered In Disability Benefits Dispute

JACKSON, Miss. — Days after a Mississippi federal magistrate judge ordered a workers’ compensation insurer to produce a reinsurance agreement, the magistrate judge granted the insurer’s motion to stay the production deadline until seven days after a ruling is issued on its forthcoming motion for a protective order as part of a broader conflict involving disputed temporary total disability (TTD) benefits.
May 09, 2025
Justice Refuses To Dismiss Archdiocese’s Claims In Sexual Abuse Coverage Dispute

NEW YORK — A New York justice denied general and excess liability insurers’ motion to dismiss the Archdiocese of New York’s claims for breach of the covenant of good faith and fair dealing and violations of New York General Business Law Section 348 in a coverage dispute arising from close to 1,700 underlying sexual abuse lawsuits, rejecting the insurers’ contention that the breach of the covenant of good faith and fair dealing claim is duplicative of the breach of contract claim.
May 09, 2025
Recommendation To Remand Adopted In Hurricane Ida Dispute With Insolvent Insurer

BATON ROUGE, La. — After review and because no objection was filed to a magistrate judge’s report, a Louisiana federal judge adopted the magistrate’s recommendation to remand to state court for lack of subject matter jurisdiction a bad faith suit filed against a now-insolvent homeowners insurer over its purported failure to pay for damages caused by Hurricane Ida.
May 07, 2025
Texas Supreme Court Finds Deposition In UIM Suit Not Proportional At Present Stage

AUSTIN, Texas — Granting a petition for mandamus relief filed by State Farm Mutual Automobile Insurance Co., the Texas Supreme Court found that a policyholder that sued for underinsured motorist (UIM) benefits was not entitled to depose the insurer’s corporate representative while declaratory claims are still pending so as to avoid duplications of discovery and unnecessary expenses at this stage of the proceedings.
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.