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

Mealey's Insurance Bad Faith

September 14, 2023
Triable Issues Exist As To Reasonableness Of Auto Insurer’s Claims Handling

SEATTLE — An auto insurer is not entitled to summary judgment on an insured’s extracontractual claims because the insured raised triable issues of fact as to whether the auto insurer’s investigation and claims handling was reasonable, a Washington federal judge said in partially denying the auto insurer’s motion for summary judgment.
September 13, 2023
Judge Dismisses Elder Abuse Suit Against LTC Insurer, Cites Inadequate Pleading

SAN FRANCISCO — A California federal judge dismissed a breach of contract and elder abuse suit filed against a couple’s long-term care (LTC) insurer for its failure to cover the wife’s claim for benefits, finding that though the amended complaint contains “a bundle of allegations that might constitute plausible causes of action with some additional facts,” the amended complaint does not currently suffice to “allow this case to proceed.”
September 12, 2023
Judge Remands Bad Faith Homeowners Insurance Suit Against Insolvent Insurer

BATON ROUGE, La. — A Louisiana federal judge remanded to state court a bad faith homeowners insurance coverage suit over purported water damage from a plumbing leak, finding that remand is appropriate for lack of subject matter jurisdiction due to the Louisiana Insurance Guaranty Association (LIGA) being added as a defendant after the insurer was placed into liquidation.
September 08, 2023
Home Depot Seeks 6th Circuit Review Of No Coverage Ruling For 2014 Data Breach Losses

CINCINNATI — Home Depot filed a notice of appeal in an Ohio federal court asking the Sixth Circuit U.S. Court of Appeals to review the lower court’s finding that an insurance policy’s electronic data exclusion bars coverage for the retailer’s losses stemming from a 2014 data breach, challenging the lower court’s grant of the insurers’ motions for summary judgment in its breach of contract and bad faith lawsuit seeking damages up to the full collective policy limits of $50 million.
September 08, 2023
Builders Risk Insurer’s JMOL, New Trial Motions Denied; $7.62M Judgment Entered

DENVER — A federal judge in Colorado denied a builders risk insurer’s renewed motion for judgment as a matter of law (JMOL) and motion for a new trial following a jury’s award of $2.54 million in breach of contract damages to its condominium developer insured, rejecting the insurer’s arguments that the developer failed to prove that it suffered “resulting loss” damages and that the jury rendered an inconsistent verdict.
August 31, 2023
Insurance Expert Is Admissible But Cautioned On Limits Of Testimony By Judge

PHILADELPHIA — A federal judge in Pennsylvania denied a motion to exclude an expert on insurance industry standards in a bad faith dispute but ruled that the expert is barred from offering impermissible legal conclusions.
August 31, 2023
Rehearing Denied After 9th Circuit Vacates Medical Payment Class Case Ruling

PORTLAND, Ore. — The Ninth Circuit U.S. Court of Appeals denied a petition for rehearing en banc filed by an insurer accused in a putative class action of bad faith and other violations related to delayed medical payments following vehicle accidents after a panel vacated a summary judgment ruling and directed the trial court to first determine whether it has jurisdiction under the Class Action Fairness Act (CAFA).
August 31, 2023
Condo Owner Is Not Insured; Breach Of Contract, Bad Faith Claims Properly Dismissed

WAUKESHA, Wis. — A condominium owner’s breach of contract and bad faith claims against the condominium association’s insurer were properly dismissed by a trial court because the condominium owner is not an insured or a third-party beneficiary under the policy at issue, the Second District Wisconsin Court of Appeals said in affirming a trial court’s ruling.
August 30, 2023
3rd Circuit Affirms Rulings Against Insured In Greenhouse Coverage Lawsuit

PHILADELPHIA — Upholding rulings in favor of a insurer and reinsurer in a dispute concerning an ozone system failure in a basil-growing greenhouse, a Third Circuit U.S. Court of Appeals panel on Aug. 29 said in part that the trial court did not abuse its discretion in finding two proposed witnesses to be unqualified.
August 28, 2023
Property Insurer Acted In Bad Faith In Handling Hurricane Claims, Judge Says

LAKE CHARLES, La. — A Louisiana federal judge granted an insured’s motion for summary judgment on its bad faith claim against a property insurer after determining that it is undisputed that the insurer acted in bad faith in handling the insured church’s property damage claims arising out of Hurricanes Laura and Delta.
August 28, 2023
Pollution Liability Insurer Says Bad Faith Suit Must Be Heard In Federal Court

SEATTLE — An insured’s complaint alleging claims for breach of contract and bad faith arising out of a commercial general liability and pollution liability insurer’s denial of coverage for underlying bodily injury suits stemming from exposure to chemicals distributed by the insured must be removed to Washington federal court because diversity of citizenship exists and the amount in controversy exceeds the federal jurisdictional minimum of $75,000, the insurer says in a notice of removal.
August 28, 2023
Breach Of Contract, Bad Faith Claims Against Auto Insurer Fail, Judge Says

PHOENIX — An insured’s claims for breach of contract and bad faith cannot proceed against an auto insurer because the insured failed to show that an automobile accident in which he was involved was caused by an uninsured driver and that the auto insurer acted in bad faith in handling the insured’s claim following the accident, an Arizona federal judge said Aug. 25 in granting the auto insurer’s motion for summary judgment.
August 28, 2023
Insurers Tell 5th Circuit $7M Hurricane Ida Dispute Belongs In Arbitration

NEW ORLEANS — A group of foreign and domestic insurers tells the Fifth Circuit U.S. Court of Appeals in an appellee brief that it should affirm a Louisiana federal court’s ruling compelling arbitration of property owners’ claims for $7 million in damages caused by Hurricane Ida and for bad faith, writing that the arbitration is required under the insureds’ policies and the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the Convention).
August 25, 2023
6th Circuit Affirms Finding That Insurer Couldn’t Void Policy In Fire Coverage Row

CINCINNATI — The Sixth Circuit U.S. Court of Appeals affirmed a district court’s determination that a homeowners insurer could not void a policy after a jury returned a verdict in favor of the Tennessee homeowner and their insurance agency in a fire coverage dispute, finding that the insurer failed to prove that the homeowners’ misrepresentation about not having automatic water sprinklers in their home increased the risk of loss needed to void an insurance policy pursuant to Tennessee law.
August 25, 2023
Reinsurer Wins Permission To Seal 2 Agreements In Cleanup Costs Coverage Row

PADUCAH, Ky. — A Kentucky federal magistrate judge on Aug. 24 granted a motion to seal a third-party administrative services agreement (ASA) and a reinsurance agreement, saying the entities involved have a compelling interest that “outweighs the public’s interest in accessing” the documents and that redaction would be “impractical.”
August 24, 2023
Bad Faith Claim Against Homeowners Insurer Fails, Louisiana Federal Judge Says

SHREVEPORT, La. — A bad faith claim against a homeowners insurer cannot proceed because the insureds failed to meet their burden of showing that the insurer acted arbitrarily and capriciously in handling their claim for damages sustained to their home by hail, a Louisiana federal judge said in granting the insurer’s motion for partial summary judgment.
August 23, 2023
Illinois Law, Not New Jersey Law, Governs Travel Insurance Policies, Judge Says

NEWARK, N.J. — A New Jersey federal judge granted an insurer’s motion to dismiss a putative class action complaint alleging claims for violations of New Jersey law, breach of contract and bad faith based on the insurer’s denial of claims for the reimbursement of premiums paid for travel insurance policies following trip cancellations caused by the coronavirus pandemic because the master policy, which governs the travel insurance policies, is governed by Illinois law and not New Jersey law.
August 22, 2023
Judge Grants Remand After Guaranty Association Added To Hurricane Coverage Row

NEW ORLEANS — A Louisiana federal judge granted a homeowner’s motion to remand in a breach of contract and bad faith suit filed against a now-insolvent insurer over its purported failure to cover damages related to Hurricane Ida, finding that because the homeowner added the Louisiana Guaranty Association (LIGA) as a defendant, diversity jurisdiction is defeated.
August 21, 2023
Alaska Federal Judge Limits Testimony Of Expert In Insurance Coverage Spat

ANCHORAGE, Alaska — An insurance industry standards expert is not qualified to opine on building codes or construction, an Alaska federal judge ruled, also finding that testimony that constitutes a legal conclusion in a dispute over insurance coverage for a damaged roof is excluded.
August 21, 2023
California High Court Agrees To Review Tribe’s Coronavirus Coverage Dispute

SAN FRANCISCO — The California Supreme Court granted an Indian tribe insured’s petition to review a state appellate court’s finding that the insured and its experts failed to present sufficient evidence to demonstrate that the coronavirus caused property damage to the tribe’s casino and resort.
August 17, 2023
Judge: Electronic Data Exclusion Bars Coverage For Home Depot’s Data Breach Loss

CINCINNATI — A federal judge in Ohio held Aug. 16 that an insurance policy’s electronic data exclusion bars coverage for Home Depot’s losses stemming from a 2014 data breach, granting the insurers’ motions for summary judgment in Home Depot’s breach of contract and bad faith lawsuit seeking damages up to the full collective policy limits of $50 million.
August 17, 2023
Reinsurer Seeks Leave To Seal Agreements In Cleanup Costs Coverage Row

PADUCAH, Ky. — Arguing that “the agreements are riddled with the sensitive competitive information,” a reinsurer in a coverage dispute filed an unopposed motion in Kentucky federal court seeking leave to seal redacted versions of a third-party administrative services agreement (ASA) and a reinsurance agreement.
August 15, 2023
All-Risk Policies Provide Coverage For Wind-Driven Rain, Federal Judge Says

SEATTLE — A Washington federal judge granted an insured condominium association’s motion for summary judgment in a coverage dispute over millions of dollars of hidden water damage sustained by the association’s buildings by wind-driven rain after determining that coverage is owed under two sets of policies for wind-driven rain when interpreting the policies’ language based on an ensuing loss provision and the efficient proximate rule.
August 15, 2023
Insurer Says District Court’s Ruling On Misrepresentations Must Be Reversed

ATLANTA — A district court’s ruling that an insurer could not demonstrate reliance upon its insureds’ fraudulent misrepresentations regarding mold damage in an insured hotel must be reversed because the district court failed to view the evidence in the insurer’s favor as the nonmoving party, an insurer argues in a cross-appeal reply brief filed in the 11th Circuit U.S. Court of Appeals.
August 14, 2023
Auto Insurer’s Motion To Transfer Breach Of Contract, Bad Faith Suit Granted

PITTSBURGH — A putative class action filed by an insured who alleges that his auto insurer breached its contract and acted in bad faith by relying on the auto policy’s regular use exclusion to deny underinsured motorist (UIM) benefits must be transferred to the U.S. District Court for the Eastern District of Pennsylvania where a similar suit against the same auto insurer is pending because the similar suit was filed first, a federal judge in Pennsylvania said in granting the auto insurer’s motion to transfer.