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

Mealey's Insurance Bad Faith

October 01, 2025
Judge: Insurer Properly Asserted Collusion In Case Brought After Defective Work

DENVER — A federal judge in Colorado granted an insurer’s motion for summary judgment of a townhome management company, as subrogee for a contractor’s complaint against it for insurance bad faith regarding the coverage of an underlying action the company brought against a contractor for alleged defective construction work in repairing the townhome community’s buildings’ roofs, gutters and siding; the judge found that the facts establish that a Nunn agreement between the company and the contractor was the result of collusion.
October 01, 2025
Judge: Misappropriation Of Funds Exclusion Bars Professional Liability Coverage

FRESNO, Calif. — A federal judge in California granted a professional liability insurer’s motion for summary judgment in an insured’s breach of contract and bad faith lawsuit seeking coverage for underlying claims alleging that the insured conducted a negligent background check on a client’s potential employee, ruling that the policy exclusion for “misappropriation of funds” unambiguously bars coverage.
September 30, 2025
Insured Appeals Federal Court’s Ruling That Flood Damage Claims Are Time-Barred

LAKE CHARLES, La. — An insured filed a notice appealing a Louisiana federal court’s ruling that her claims for flood damage caused by Hurricane Delta and a separate flood event are time-barred under a Standard Flood Insurance Policy (SFIP) and must be dismissed with prejudice, challenging the court’s grant of the insurer’s motion for summary judgment on her claims for breach of contract and bad faith.
September 29, 2025
Judge Rules For Final Insurer In Bad Faith Suit Arising From Construction Defects

DENVER — A federal judge in Colorado granted the last remaining defendant insurer’s motion for summary judgment in a plaintiff insurer’s breach of contract and bad faith lawsuit seeking recovery of the defense and settlement costs that it paid on behalf of its general contractor insured in an underlying construction defects lawsuit but denied the defendant insurer’s request for attorney fees because the lawsuit was not frivolous.
September 29, 2025
Unit Owner Has No Right Of Action Against Insurer, Louisiana Panel Affirms

GRETNA, La. — The Louisiana appeals panel concluded that a condominium unit owner does not enjoy a third-party beneficiary status and has no right of action against a commercial line insurer, affirming a lower court’s judgment sustaining the insurer’s peremptory exceptions and dismissing the unit owner’s breach of contract and bad faith claims in a Hurricane Ida coverage dispute.
September 29, 2025
N.Y. Federal Judge Tosses Cafe Owner's Bad Faith Claim On Duplicity Grounds

NEW YORK — A New York federal judge granted an insurer’s partial motion to dismiss a cafe owner’s breach of the covenant of good faith and fair dealing claim against it, finding that it is duplicative of the cafe owner’s breach of contract claim because both are based on the same alleged refusal by the insurer to pay business interruption losses following a gas services shutdown.
September 24, 2025
Tractor Damage Not Covered; Breach Of Contract, Bad Faith Claims Fail, Panel Says

BOISE, Idaho — A trial court did not err in granting summary judgment to a homeowners insurer in a breach of contract and bad faith suit stemming from a dispute over coverage for a damaged tractor because the tractor was not damaged as a result of an impact with a vehicle as required under the policy, the Idaho Court of Appeals said.
September 24, 2025
Insureds Fail To Support Bad Faith Claims Alleged Against Insurer, Judge Says

DENVER — A Colorado federal judge determined that common-law and statutory bad faith claims alleged against a property insurer in a hail damage coverage dispute must be dismissed without prejudice because the insureds failed to include sufficient factual material in support of the claims.
September 23, 2025
Insurer Answers Bad Faith Complaint In California Storm Damage Coverage Suit

LOS ANGELES — Following a California court’s ruling that overruled its demurrer to an insured’s claim for breach of the implied covenant of good faith and fair dealing and denied its motion to strike all references to punitive damages, an insurer filed its answer to the insured’s first amended complaint in a coverage dispute over storm damage.
September 23, 2025
Jury Properly Instructed On Causation In Bad Faith Suit Against Insurer, Panel Says

TAMPA, Fla. — A trial court did not err in instructing a jury that to find that an auto insurer acted in bad faith, the jury must find that the insurer’s bad faith conduct was the cause of a $13.5 million excess verdict entered against an insured, the Second District Florida Court of Appeals said.
September 22, 2025
Appellants Argue Reinsurer Was ‘De Facto Insurer’ In $844M Crash Coverage Appeal

MIAMI — Survivors of a 2016 plane crash and representatives of the deceased filed a brief in a Florida appellate court, arguing that a reinsurer acted as a “de facto insurer” and that state law accordingly permits them to pursue independent bad faith and coverage claims despite a trial court’s dismissal of their amended complaint that sought to enforce approximately $844 million in consent judgments.
September 22, 2025
Following Mediation, Parties In D&O Excess Coverage Dispute Reach ‘Total Impasse’

MIAMI — A mediator told a Florida federal court on Sept. 19 that an excess directors and officers liability insurer and a law firm participated in mediation and failed to resolve the law firm’s lawsuit seeking payment for its legal representation of the insured in underlying criminal and civil lawsuits.
September 18, 2025
Fla. Company’s Bad Faith Claim Dismissed, Breach Of Contract Claim Continues

TAMPA, Fla. — A federal judge in Florida granted in part and denied in part a commercial general liability insurer’s motion to dismiss a concrete paver company’s complaint against it for not defending it in an arbitration regarding defective pavers, finding that the concrete paver’s breach of contract claim was not premature but that its bad faith claim was premature because a determination of coverage in the underlying action has not been made.
September 18, 2025
Policyholder’s Remand Motion Denied, Claims Against State Farm Agent Dismissed

OKLAHOMA CITY — An Oklahoma federal judge denied a policyholder’s motion to remand and dismissed without prejudice her claims against her insurance agent and agency, ruling that they were fraudulently joined in her complaint because she received the replacement cost policy she requested, her alleged damages arose only from a claim denial and her fraud-based claims against the agent failed as a matter of law.
September 17, 2025
Parties Reach Settlement To Resolve All Remaining Claims In Reinsurance Dispute

SACRAMENTO, Calif. — The two remaining parties in a suit involving reinsurance and related agreements notified a California federal court that they have reached a final settlement, resolving all outstanding claims and providing for the distribution of funds held by the court.
September 16, 2025
After Settlement Negotiations, Magistrate Orders Conference In Coverage Dispute

INDIANAPOLIS — After being advised of ongoing settlement negotiations in an underlying case, an Indiana federal magistrate judge ordered the parties to attend a telephonic status conference to discuss the suit filed by an insurer now in rehabilitation seeking a declaration that specified directors and officers (D&O) policies apply to cover claims in underlying litigation.
September 16, 2025
Countertop Manufacturer Seeks Coverage For Underlying Silica Bodily Injury Suits

LOS ANGELES — An insured manufacturer and distributor of countertops and countertop products filed suit in California state court, claiming that its insurers breached their contracts of insurance and acted in bad faith in relying on their policies’ pollution and silica exclusions to deny coverage for underlying silica-exposure bodily injury suits in which the insured is named as a defendant.
September 15, 2025
Summary Judgment Denied For Insurer In Fabric Water Damage Coverage Dispute

BALTIMORE — A Maryland federal judge denied summary judgment to an insurer in a breach of contract and bad faith suit filed against it by its insured, a “high-end” fabric retailer seeking coverage for water damage, finding that “summary judgment is not appropriate” in part because of remaining questions as to whether the insured voided the policy pursuant to a fraud provision regarding alleged “bogus” estimates of damage.
September 15, 2025
Insured’s Bad Faith Claims Tossed, But Breach Of Contract Allegation To Continue

DENVER — A Colorado federal judge held that a homeowner failed to plead sufficient facts to support statutory and common law bad faith claims against his insurer but found that the breach of contract claim can proceed because the homeowner adequately stated that all premiums were paid and that the policy provides coverage for accidental water damage.
September 15, 2025
Third-Party Bad Faith Claims Not Recognized Under Ohio Law, Panel Says

COLUMBUS, Ohio — A trial court properly determined that an amended complaint against a tortfeasor’s auto insurer cannot proceed because the plaintiff is not an insured under the policy and because third-party bad faith claims are not recognized under Ohio law, the 10th District Ohio Court of Appeals said.
September 15, 2025
Homeowners’ Bad Faith, Breach Of Contract Claims To Proceed, Magistrate Judge Says

DALLAS — A Texas federal magistrate judge denied a homeowners insurer’s motion to dismiss claims for breach of contract and bad faith brought by insureds seeking coverage for water damage in their home after determining that the insureds sufficiently allege facts in their amended complaint to support the claims.
September 15, 2025
Trial Court’s Post-Offer Interest Ruling Reversed By Nevada High Court Majority

LAS VEGAS — The majority of the Nevada Supreme Court affirmed a jury’s verdict on breach of contract, unfair insurance practices and bad faith claims at issue in an auto coverage dispute; however, the majority reversed the jury verdict on the issue of post-offer interest on a punitive damages award after determining that post-offer interest differs from prejudgment interest and that the trial court applied the incorrect precedent in refusing to assess post-offer interest.
September 15, 2025
Fact Issues Exist On Value Of UIM Claims And Insurer’s Offers To Settle, Judge Says

LAS VEGAS — An insured’s breach of contract and bad faith claims against an auto insurer will proceed, a Nevada federal judge said, because questions of fact exist regarding the value of the insured’s underinsured motorist (UIM) claims and the reasonableness of the offers made by the auto insurer to settle the insured’s claims.
September 12, 2025
Parties Advise Court Of Settlement In Hurricane Ida Coverage Dispute

NEW ORLEANS — Parties involved in a Hurricane Ida coverage dispute filed a joint notice of settlement in a Louisiana federal court, advising the court that they resolved the dispute between the Louisiana Insurance Guaranty Association (LIGA), a flood insurer and its insured related to the insured’s purported losses from the hurricane.
September 11, 2025
Claims Against Homeowners Insurer In Water Leak Suit Cannot Proceed, Judge Says

PHOENIX — A homeowners insurer is entitled to summary judgment on breach of contract, bad faith and unfair settlement practices claims because the insureds failed to show that the insurer breached any portion of the insurance policy or acted in bad faith in handling the insureds’ claim for additional living expenses after the insureds were forced to leave their home because of a water leak in the home’s slab, an Arizona federal judge said.