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

Mealey's Insurance Bad Faith

March 24, 2025
Nevada Federal Judge Says Bad Faith Claims Fail To Allege Sufficient Facts

LAS VEGAS — A Nevada federal judge dismissed an insured’s bad faith claims against an auto insurer after determining that the insured failed to allege sufficient facts in support of the claims, however, the judge said the dismissal is without prejudice, allowing the insured to file an amended complaint to attempt to correct the deficiencies.
March 24, 2025
District Court Properly Found Employee’s Bad Faith Claim Cannot Proceed, Panel Says

CHICAGO — A district court properly granted a commercial liability insurer’s motion for judgment on the pleadings because the insurer was not vested with the discretion to investigate and settle the insured employee’s claim, the Seventh Circuit U.S. Court of Appeals said.
March 21, 2025
Auto Insurer’s Failure To Settle Was Not Unreasonable, Panel Majority Says

PASADENA, Calif. — The majority of the Ninth Circuit U.S. Court of Appeals on March 20 affirmed a district court’s summary judgment ruling in favor of an auto insurer after determining that the auto insurer did not act in bad faith in failing to settle a claim on behalf of its insured because the third-party claimant failed to turn over his medical records despite numerous requests from the auto insurer.
March 20, 2025
Insureds’ Failure To Provide Proof Of Loss Forms Relieves Insurer Of Coverage Duty

NEW YORK — A property insurer does not owe coverage to its insureds for a missing boat dock because the insureds’ failure to provide requested proof of loss forms within 60 days of receiving the request from the insurer constitutes a violation of the insurance policy’s terms and relieves the insurer of its duty to pay the insureds’ claim, the Second Circuit U.S. Court of Appeals said March 19 in affirming a district court’s ruling on the insureds’ breach of contract and bad faith claims.
March 20, 2025
Split Louisiana Panel Affirms Order To Pay $50,000 To Life Policy Beneficiary

GRETNA, La. — A split Louisiana appellate court panel on March 19 affirmed in part a lower court order requiring a life insurer to pay a policy beneficiary $50,000, the face value of a life insurance policy, finding that the lower court did not err in its determination that the insurer failed to show that the decedent “made material misrepresentations with an intent to deceive” in the policy application.
March 18, 2025
Insurer Seeks Take-Nothing Judgment After Jury Awards Insured $39.9M In Storm Suit

TYLER, Texas — A commercial property insurer moved for full judgment as a matter of law and alternatively a new trial after a jury in a Texas federal court unanimously awarded its insured $4,838,747 in damages for its breach of contract and $35 million in exemplary damages for its breach of the duty of good faith and fair dealing in a coverage dispute arising from property damage that was caused by an April 12, 2020, wind and hailstorm.
March 17, 2025
6th Circuit Asked To Rehear No Coverage Ruling In Professional Liability Dispute

CINCINNATI — An appellant filed a petition for panel rehearing and rehearing en banc asking the Sixth Circuit U.S. Court of Appeals to reconsider its finding that her declaratory judgment and bad faith claims fail because she did not provide a professional liability insurer with “all reasonably obtainable information” about her potential negligence claim against a dentist insured, arguing that the panel opinion misapplied insurance law, failed to hold the insurer accountable “for its shifting justifications” and created “an insurmountable burden for third parties attempting to report claims.”
March 17, 2025
Mississippi Federal Judge Dismisses Extracontractual Claims Against Auto Insurer

JACKSON, Miss. — An insured’s bad faith claims against an auto insurer cannot proceed because the auto insurer offered evidence that the only dispute at issue between the insured and the insurer was a dispute over the amount owed for the insured’s underinsured motorist (UIM) claim, a Mississippi federal judge said in granting the auto insurer’s unopposed motion for summary judgment.
March 13, 2025
Judge: N.Y. Law Governs Insured’s Coverage Suit Arising From Hurricane Ida Damage

NEW YORK — A federal judge in New York concluded that under the state’s choice-of-law rules, a property insurance policy’s choice-of-law clause is valid and, as a result, New York law governs an insured’s declaratory judgment, breach of contract and bad faith lawsuit seeking coverage for property damage to its Louisiana restaurant and warehouse that was caused by Hurricane Ida.
March 12, 2025
Judge Withdraws Earlier Ruling In Policy Row Over Criminal History Information

HOUSTON — A Texas federal judge on March 12 withdrew a ruling issued nine days earlier that denied summary judgment to a life insurance policy beneficiary in her suit against the insurer for its failure to pay benefits under the policy, finding that failure to withdraw the earlier ruling was in error because after the insurer filed its amended answer, the judge issued a March 6 ruling that also denied summary judgment to the insured.
March 11, 2025
Insured Says Reimbursement Owed For Underlying Water Contamination Complaints

LOS ANGELES — An insured company filed suit in California federal court against its general liability insurer, claiming that the insurer’s refusal to defend it or reimburse it for costs incurred in defending itself against two water contamination suits was a breach of contract and a breach of the implied covenant of good faith and fair dealing.
March 11, 2025
Bad Faith Claim To Proceed; Insureds Have Shown Special Relationship Exists

OKLAHOMA CITY — A breach of contract claim against two insurers cannot stand because the insureds failed to prove that the insurers are parties to the homeowners insurance policy; however, a bad faith claim against the two insurers can proceed because the insureds allege sufficient facts to show that a special relationship exists between the insurers and the insureds, an Oklahoma federal judge said in partially granting the insurers’ motion to dismiss.
March 11, 2025
Trial Court Properly Found Insurer Was Prevailing Party In Water Damage Suit

FRANKFORT, Ky. — A trial court did not err in determining that a homeowners insurer was the prevailing party in a water damage coverage dispute because the insureds agreed to dismiss their breach of contract claim prior to trial and the insureds failed to prove their claims for bad faith and violation of the Kentucky Consumer Protection Act (KCPA), the Kentucky Court of Appeals said.
March 10, 2025
COMMENTARY: Sustainability Recalibration: What Insurers And Policyholders Should Know About ESG (Environmental, Social, and Governance Considerations) Under Trump 2.0, Part 2

By Scott M. Seaman
March 10, 2025
Magistrate Dismisses Bad Faith Suit Over Hurricane Irma Damage After Parties Settle

FORT MYERS, Fla. — A federal magistrate judge in Florida signed an order of dismissal one day after a condominium insured voluntary dismissed with prejudice its bad faith lawsuit seeking coverage for property damage caused by Hurricane Irma.
March 06, 2025
Magistrate Recommends Denying Dismissal Bid In Former Surgeon’s Disability Case

TYLER, Texas — Concluding that several issues raised could not properly be resolved at this stage, a Texas federal magistrate judge recommended denial of a dismissal motion in a suit where a former surgeon seeks long-term disability (LTD) benefits and relief for alleged mishandling of her claim.
March 05, 2025
Judgment Denied To Life Policy Beneficiary Over No Incarceration Disclosure

HOUSTON — A Texas federal judge denied a life insurance policy beneficiary’s motion for summary judgment in her breach of contract suit against an insurer for its failure to pay benefits under the policy, finding that the insurer is entitled to cancel the policy due to the beneficiary’s failure to accurately represent the insured’s criminal history in the policy application.
March 04, 2025
Furniture Delivery Company Asks 9th Circuit To Rehear UCL Coverage Dispute

PASADENA, Calif. — A furniture delivery company insured has asked the Ninth Circuit U.S. Court of Appeals to reconsider its ruling that an insurer has no duty to defend it against an underlying misappropriation of trade secrets and unfair competition lawsuit brought by a competitor, challenging the appeal court’s affirmation of a lower federal court’s grant of the insurer’s motion for summary judgment in its breach of contract and bad faith lawsuit.
March 04, 2025
6th Circuit Affirms Ruling In Favor Of Dentist’s Professional Liability Insurer

CINCINNATI — The Sixth Circuit U.S. Court of Appeals held that because an appellant did not provide a professional liability insurer with “all reasonably obtainable information” about her potential negligence claim against a dentist insured, the insurer had no contractual duty to the insured and, as a result, the appellant’s bad faith claim fails.
March 04, 2025
COMMENTARY: Sustainability Recalibration: What Insurers And Policyholders Should Know About ESG (Environmental, Social, and Governance Considerations) Under Trump 2.0, Part 1

By Scott M. Seaman
March 03, 2025
Bad Faith Claim Fails Based On Waiver Of UM/UIM Coverage, Judge Says

LAFAYETTE, La. — A bad faith claim against an employer’s auto insurer cannot proceed because no uninsured motorist (UM) coverage is owed to the employee based on the employer’s waiver of uninsured/underinsured motorist (UM/UIM) coverage, a Louisiana federal judge said in granting the auto insurer’s motion for summary judgment.
March 03, 2025
Choice-Of-Law Ruling Issued In Disability Insurance Suit In Federal Court

NEW HAVEN, Conn. — Granting an insurer’s motion for partial judgment on the pleadings in a suit challenging the discontinuation of long-term disability (LTD) benefits, a Connecticut federal judge ruled that the “tort, equity, and contract claims under the common law are not governed by California law” and that three California and North Carolina statutory claims fail as a matter of law.
March 03, 2025
Bad Faith Claim Cannot Proceed Because Genuine Dispute Exists On Coverage

LAS VEGAS — A bad faith claim alleged against an auto insurer cannot proceed because a genuine dispute exists over whether coverage is afforded for an underinsured motorist (UIM) benefits claim, a Nevada federal judge said in granting the auto insurer’s motion for summary judgment on the claim.
March 03, 2025
Homeowner Amends Complaint Against Insurer In Black Mold Coverage Suit

ABERDEEN, Miss. — Consistent with a Mississippi federal judge’s order, an insured homeowner filed an amended complaint against her homeowners insurer, clarifying the date on which the insured was forced to move out of her home as a result of black mold growth.
February 27, 2025
Breach Of Contract, Bad Faith Claims Proceed In Storm Damage Coverage Suit

LOS ANGELES — Summary judgment in favor of a homeowners insurer on breach of contract and bad faith claims is not warranted in a dispute over coverage for storm damages because the parties have not conducted any discovery, a California federal judge said in denying the insurer’s motion.