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Mealey's Insurance Bad Faith

  • July 18, 2025

    Panel: Insurer Has No Duty To Indemnify $58.5M Judgment Over Mishandled Bodies

    PASEDENA, Calif. — The Ninth Circuit U.S. Court of Appeals affirmed a lower federal court’s ruling that a commercial insurer has no duty to indemnify a convicted felon for a $58.5 million underlying state court judgment for his mishandling of donated bodies, finding that the appellants are collaterally estopped from relitigating the issue of the felon’s relationship with the insured company.

  • July 16, 2025

    Portion Of Bad Faith Claim Will Proceed Against Insurer In Hurricane Damage Suit

    NEW ORLEANS — A portion of an insured’s bad faith claim alleged against a homeowners insurer can proceed, a Louisiana federal judge said after determining that questions of fact exist as to what information the insurer possessed regarding damages to the insured’s home when it issued its initial payments under the homeowners policy.

  • July 15, 2025

    Insured Appeals Denial Of Motion For Relief From Judgment In Coronavirus Suit

    ELIZABETH CITY, N.C. —A hotel and restaurant owner insurer notified a North Carolina federal court that it is asking the Fourth Circuit U.S. Court of Appeal to review the court’s recent denial of its motion for relief from a 2021 judgment dismissing its breach of contract and bad faith lawsuit arising from the coronavirus pandemic.

  • July 15, 2025

    2nd Amended Complaint Sufficiently Supports Breach Of Contract, Bad Faith Claims

    LAS VEGAS — A Nevada federal judge on July 14 denied an auto insurer’s motion to dismiss an insured’s breach of contract and bad faith claims alleged in a second amended complaint (SAC) because the insured added additional factual details that support the insured’s claims for breach of contract, bad faith and breach of statutory duties.

  • July 15, 2025

    9th Circuit Revives Breach Claim In Disability Row Involving COVID Risk

    SAN FRANCISCO — In an unpublished July 14 memorandum disposition, the Ninth Circuit U.S. Court of Appeals revived a breach of contract claim, but not a bad faith claim, in a suit an oral surgeon filed after unsuccessfully seeking disability benefits on the grounds that his comorbid conditions and inability to access recommended personal protective equipment (PPE) made it necessary to close his practice early in the COVID-19 pandemic.

  • July 14, 2025

    Mine Workers’ Claims Against Insurer Cannot Proceed, Federal Magistrate Judge Says

    GREAT FALLS, Mont. — Claims alleged against an insurer of the state of Montana by mine workers who were exposed to asbestos cannot proceed because the mine workers are judicially estopped from bringing the claims against the insurer because they admitted in the underlying suit against the state that the insurer had a reasonable basis to deny coverage, a Montana federal magistrate judge said in granting the insurer’s motion to dismiss.

  • July 14, 2025

    Homebuyer Lacks Standing To Sue Insurer For Hurricane Coverage, 5th Circuit Affirms

    NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals affirmed a lower federal court’s summary judgment ruling in favor of a homeowners insurer in a breach of contract and bad faith lawsuit seeking further insurance proceeds to repair property damage caused by hurricanes Laura and Delta, rejecting the appellant’s argument that his house purchase included an assignment of post-loss rights to pursue insurance claims for hurricane damage.

  • July 14, 2025

    Insureds’ Breach Of Contract, Bad Faith Suit Must Be Remanded, Judge Says

    OKLAHOMA CITY — An Oklahoma federal judge granted a motion to remand a breach of contract and bad faith suit filed by insureds after determining that complete diversity of citizenship does not exist because the homeowners insurer failed to meet its burden of showing that the insureds’ claims against a nondiverse insurance agent could not proceed.

  • July 14, 2025

    As Recommended, Disability Claimant Wins Summary Judgment On Contract Breach Claim

    BUFFALO, N.Y. — A claimant who sought summary judgment on three of five counts in his suit over termination of disability benefits was granted it on a single breach of contract claim, with a New York federal judge briefly overruling the defendants’ objections to a report and recommendation he adopted; the ruling leaves claims including breach of the covenant of good faith and fair dealing pending.

  • July 14, 2025

    Insureds Permitted To Amend Complaint To Add Request For Punitive Damages

    PORTLAND, Ore. — An Oregon federal magistrate judge granted insureds leave to file an amended complaint against their homeowners insurer to add a request for punitive damages because the insurer failed to show that amendment would be futile or that it would be prejudiced if an amended complaint is filed.

  • July 11, 2025

    Extracontractual Claims Against Homeowners Insurer Can Proceed, Federal Judge Says

    AUSTIN, Texas — An insured’s extracontractual claims alleged against a homeowners insurer in a dispute over the insured’s claim for hailstorm damages can proceed because the insured states specific facts to support his contention that the insurer acted in bad faith and made misrepresentations regarding the coverage available under the policy, a Texas federal judge said in denying the insurer’s motion to dismiss.

  • July 11, 2025

    Panel: Radioactive Matter Exclusion Bars Coverage For Radiation Exposure Claims

    CHICAGO — A Seventh Circuit U.S. Court of Appeals panel affirmed a district court’s ruling that no coverage is owed by insurers pursuant to policies’ radioactive materialsexclusion for an underlying suit seeking damages for bodily injuries caused by exposure to electromagnetic (EMF) radiation from the insured’s electric transformers because the exclusion bars all claims related to any form of radiation.

  • July 10, 2025

    District Court Properly Excluded Portions Of Expert Witness Testimony, Panel Says

    ATLANTA — A district court did not err in excluding portions of an expert’s witness testimony because the expert witness’s opinions on the cause of the insured’s water and mold damages and the insurer’s alleged bad faith conduct were not disclosed before the insurer’s deposition of the expert witness as required under Federal Rule of Civil Procedure 26(a)(2)(B), the 11th Circuit U.S. Court of Appeals said July 9 in affirming the district court’s ruling.

  • July 09, 2025

    Bad Faith, Unfair Insurance Practices Claims Dismissed In Remediation Coverage Suit

    LAS CRUCES, N.M. — A New Mexico federal judge granted an insurer’s motion to dismiss claims alleging bad faith and violations of New Mexico Unfair Insurance Practices Act (NMUIPA) after determining that the insureds, which are seeking coverage for environmental contamination remediation costs related to the release of a waste byproduct from a gas pipeline, failed to show that the insurer’s reservation of its right to deny coverage was arbitrary or unreasonable.

  • July 09, 2025

    4th Circuit Finds Some Coverage Possible in Suit Over Faulty Stucco Claims

    RICHMOND, Va. — A panel of the Fourth Circuit U.S. Court of Appeals found that a commercial general liability insurer owned no coverage to a general contractor for the costs incurred in repairing faulty stucco, but said the trial court erred in dismissing as moot the contractor’s breach of contract and bad faith claims because the court didn’t assess whether the costs associated with the property damage were covered under the policy.

  • July 09, 2025

    Claims Against Long-Term Care Insurer Fail But Insured Permitted To Amend Complaint

    FRESNO, Calif. — A California federal judge granted a long-term care insurer’s motion to dismiss breach of contract, bad faith and financial elder abuse claims without prejudice after determining that the insured failed to specifically show how the long-term care insurer breached its contract when it denied the insured’s claim for benefits under the policy.

  • July 09, 2025

    Auto Insurer Failed To Show Handling Of UIM Claim Was Reasonable, Judge Says

    SAN DIEGO — A California federal judge refused to dismiss an insured’s bad faith claim against an auto insurer after determining that the insurer failed to show that it acted reasonably in handling the insured’s claim for underinsured motorist (UIM) benefits.

  • July 08, 2025

    Surplus Lines Insurer, Insured File Notice Of Settlement In Water Damage Suit

    ATLANTA — A surplus lines insurer and its insured filed a notice of settlement in Georgia federal court, agreeing to settle the insured’s breach of contract and bad faith suit stemming from the insured’s claim for coverage for a number of insured apartment units damaged as a result of frozen water pipes that burst.

  • July 08, 2025

    Misrepresentation, Fraud Claims Will Not Proceed In Mold, Water Damage Suit

    SALT LAKE CITY — A Utah federal judge determined that misrepresentation and fraud claims alleged against a homeowners insurer and an engineer hired by the insurer cannot proceed because no party or entity actually relied on any alleged misrepresentation in the engineer’s report regarding the cause of water and mold damage sustained at the insureds’ home.

  • July 07, 2025

    Judge Dismisses Bad Faith Suit Against Employment Practices Liability Insurer

    BUTTE, Mont. — A federal judge in Montana granted an employment practices liability insurer’s motion to dismiss with prejudice a bad faith coverage lawsuit arising from claims that a hospital insured and its employees wrongfully harassed and retaliated against other employees for reporting patient abuse and neglect.

  • July 03, 2025

    California Federal Judge Sanctions Lawyer For AI-Faked Cites In Disability Case

    SANTA ANA, Calif. — A California federal judge imposed sanctions including a $500 payment on a plaintiff’s attorney who told the court that he “failed to scrutinize and oversee the preparation of” memoranda “filed with erroneous case citations that were invented by AI”; the breach of contract suit over termination of total disability benefits is headed toward a jury trial after the judge last month granted summary judgment for the insurer on a bad faith claim.

  • July 02, 2025

    Fungus Coverage Provision Does Not Provide Coverage For Water Loss Claim

    MILWAUKEE — A commercial property insurer did not breach its contract and act in bad faith in refusing to pay an insured’s claim for water damage under the policy’s additional coverage provision for fungus, rot and bacteria because the water damage was caused by repeated seepage or leakage of water, an excluded cause of loss, a Wisconsin federal magistrate judge said July 1 in granting the insurer’s motion to dismiss.

  • July 02, 2025

    No Coverage Owed For Roof Damage; Defective Materials Exclusion Precludes Coverage

    GALVESTON, Texas — No coverage is owed under a homeowners policy for roof damage because the homeowners insurer met its burden of showing that the damage was caused by defective roof shingles, an excluded cause of loss, and the insured failed to meet his burden of showing that some of the damage was caused by a hailstorm, a Texas federal magistrate judge said in granting the insurer’s motion for summary judgment on the breach of contract and extracontractual claims.

  • July 02, 2025

    Breach Of Contract, Extracontractual Claims Against Insurer Are Time-Barred

    WACO, Texas — An insured’s breach of contract and extracontractual claims alleged against a homeowners insurer cannot proceed because the claims are barred by the applicable two-year statute of limitations, which began to run when the insurer denied the insured’s claim for damages to his home incurred during a storm, a Texas federal magistrate judge said in recommending that the insurer’s motion for summary judgment be granted.

  • June 30, 2025

    Earth Movement Exclusion Bars Coverage For Foundation Damage, Judge Says

    SIOUX CITY, Iowa — An earth movement exclusion clearly applies to bar coverage for foundation damage to an insured home even if the cause of the foundation damage was an excess amount of water flowing from a burst pipe within the home, an Iowa federal judge said in granting a homeowners insurer’s motion for summary judgment on breach of contract and bad faith claims.