Mealey's Insurance Bad Faith

  • July 02, 2020

    Panel Won’t Reconsider Revival Of Bad Faith, Punitive Damages Claims In Wildfire Suit

    SAN FRANCISCO — A California appeals panel on July 1 denied a homeowners insurer’s petition to rehear its reversal of a lower court’s grant of summary judgment in favor of the insurer on insureds’ bad faith and punitive damages claims after finding that it cannot determine that it is undisputed that the insurer’s basis for denying the insureds’ supplemental wildfire damage claims was reasonable (Leonard Fadeeff, et al. v. State Farm General Insurance Co., No. A155691, Calif. App., 1st Dist., Div. 2).

  • July 02, 2020

    Insured Cannot Amend Answer To Allege Bad Faith Claim, Magistrate Judge Says

    BUFFALO,  N.Y. — A New York federal magistrate judge on June 18 denied an insured’s motion to amend an answer to add a new cross-claim based on the property insurer’s alleged bad faith failure to indemnify the insured for a judgment in an underlying personal injury suit because the motion to amend was not timely filed (Michely J. Perez v. Foremost Insurance Co., et al., No. 17-997, W.D. N.Y., 2020 U.S. Dist. LEXIS 106815).

  • July 01, 2020

    Dismissal Of Contract, Bad Faith Claims In Disability Insurance Suit Upheld

    ATLANTA — A federal district court did not err in dismissing a claimant’s insurance breach of contract and bad faith claims against a disability insurer because the claims were time-barred under Delaware’s three-year statute of limitations provision, an 11th Circuit U.S. Court of Appeals panel ruled June 30 in a per curiam opinion (Douglas Kuber v. The Prudential Insurance Company of America, No. 19-80151, 11th Cir., 2020 U.S. App. LEXIS 20371).

  • July 01, 2020

    Collapse Provision Is Ambiguous, Virginia Federal Judge Determines

    RICHMOND, Va. — A Virginia federal judge on June 29 partially granted an insured’s motion for summary judgment after determining that the term “decay” as used in a policy’s collapse provision is ambiguous (Derbyshire Baptist Church v. Church Mutual Insurance Co., No. 19-731, E.D. Va., 2020 U.S. Dist. LEXIS 113346).

  • June 30, 2020

    Day Care Sues Insurer For Bad Faith Handling Of Business Interruption Claim

    BOSTON — An operator of day care centers sued its commercial property insurance provider in Massachusetts federal court on June 29, alleging that the insurer breached its contract with the insured and acted in bad faith in failing to provide business interruption coverage after the day care centers were forced to limit their business operations to families of first responders in response to the commonwealth’s implementation of a stay-at-home order in the wake of the novel coronavirus pandemic (Pakachoag Acres Day Care Center Inc. v. Philadelphia Indemnity Insurance Co., No. 20-40083, D. Mass.).

  • June 30, 2020

    Expenses Incurred In Cleaning Up COVID-19 Contamination, Restaurants Argue

    PHILADLEPHIA — Philadelphia restaurants on June 19 sued their insurers for breach of contract and bad faith in a Pennsylvania court, contending that they “have had to incur expenses in cleaning up the pollution and contamination caused by the novel coronavirus and this clean-up continues to the present and likely will continue into the foreseeable future” (The Marathon Grill Inc., et al. v. State Automobile Mutual Insurance Co., et al., No. 200600918, Pa. Comm. Pls., Philadelphia Co.).

  • June 30, 2020

    Connecticut Judge Strikes 2 Bad Faith Claims Alleged Against Auto Insurer

    BRIDGEPORT, Conn. — A Connecticut judge on June 5 granted an auto insurer’s motion to  strike two bad faith claims after determining that the insured failed to sufficiently allege that the auto insurer’s failure to pay an uninsured motorist claim was done in bad faith or was the result of an improper motive (Haggai Lherisson v. Progressive Casualty Insurance Co., No. CV196085707S, Conn. Super., 2020 Conn. Super. LEXIS 617).

  • June 30, 2020

    Insurer Failed To Show Prejudice As A Result Of Late Jury Demand In Bad Faith Suit

    BROOKLYN, N.Y. — A New York federal judge on June 22 granted an estate’s motion to file a jury demand in a bad faith suit after determining that the auto insurer failed to prove that it will be prejudiced by the late request (Government Employees Insurance Co. v. Diane Saco, et al., Nos. 12-5633, 15-634, E.D. N.Y., 2020 U.S. Dist. LEXIS 108931).

  • June 29, 2020

    Homeowners’ Insurer Seeks Dismissal Of All Claims In Bad Faith Lawsuit

    WEST PALM BEACH, Fla. — Dismissal of insureds’ claims for homeowners insurance coverage in an insurance breach of contract and bad faith lawsuit stemming from a home fire is warranted because the insureds have failed to sufficiently state a cause of action for any of their claims, an insurer argues in a June 25 motion to dismiss filed in Florida federal court (Nick Maounis, et al. v. AIG Property Casualty Co., No. 20-80730, S.D. Fla.).

  • June 29, 2020

    Insurer: No Exception Absolving Reinsurers From Bad Faith Claims

    MONTGOMERY, Ala. — An insurer argues in a June 25 brief that an Alabama federal court should deny a reinsurer’s request to dismiss claims for bad faith refusal to pay and “decline to create an exception that preemptively absolves reinsurers from bad faith claims” (Alabama Municipal Insurance Corporation v. Munich Reinsurance America, Inc., No. 20-300, M.D. Ala.).

  • June 29, 2020

    No Coverage Owed For Rot, Termite Damage, Texas Federal Judge Says

    HOUSTON — A homeowners insurer owes no coverage for the collapse of a home’s joists as a result of termite and rot damage because there was no entire collapse of the home as required by the policy, a Texas federal judge said June 24 (Beatrice Stewart v. Metropolitan Lloyds Insurance Company of Texas, No. 19-5008, S.D. Texas, 2020 U.S. Dist. LEXIS 111527).

  • June 26, 2020

    JPMDL To Hear Oral Arguments In COVID-19 Business Interruptions Suits

    WASHINGTON, D.C. —The U.S. Judicial Panel on Multidistrict Litigation on June 26 issued an order indicating that it will hear oral arguments on July 30 to determine whether the U.S. District Court for the Eastern District of Pennsylvania or the Northern District of Illinois is the better forum to transfer lawsuits seeking business interruption coverage for losses arising from governmental closure orders prompted by the coronavirus pandemic (In re:  COVID-19 Business Interruption Insurance Coverage Litigation, No. 2942, JPMDL).

  • June 26, 2020

    Restaurant Seeks To Stay COVID-19 Coverage Suit Pending JPMDL Ruling

    HARRISBURG, Pa. — A self-proclaimed “mom and pop” South Carolina restaurant owner on June 25 moved a Pennsylvania federal court to stay its class action breach of contract, bad faith and unjust enrichment complaint against its all-risk commercial insurer for “swiftly” denying its claim for coverage for its closure due to the COVID-19 pandemic, arguing that the insurer will suffer no prejudice if the lawsuit is stayed pending the U.S. Judicial Panel on Multidistrict Litigation’s resolution of two motions to transfer “this and nearly 200 other related cases in 38 federal districts” “for centralized pretrial proceedings” (Richard Kahn, et al. v. Pennsylvania National Mutual Casualty Insurance Company, No. 20-00781, M.D. Pa.).

  • June 24, 2020

    No Coverage Owed For Water Damage Caused By Sump Pump Failure, Panel Says

    JERSEY CITY, N.J. — The Appellate Division of the New Jersey Superior Court on June 22 affirmed a trial court’s ruling that no coverage is owed for water damage incurred as a result of the failure of a sump pump because the policy excluded water damage caused by a sump pump failure and the insurer had no duty to inform the insured on an annual basis of the available supplemental coverage for sump pump failure (Tony Ping Yew v. FMI Insurance Co., No. A-4947-18T3, N.J. Super., App. Div., 2020 N.J. Super. Unpub. LEXIS 1200).

  • June 23, 2020

    Federal Judge Dismisses Bad Faith Claim Without Prejudice Against Auto Insurer

    PHILADELPHIA — A Pennsylvania federal judge on June 22 granted an auto insurer’s motion to dismiss an insured’s bad faith claim without prejudice after determining that the insured failed to sufficiently allege facts in support of the bad faith claim (Daniel Dietz v. Liberty Mutual Insurance Co., No. 20-1239, E.D. Pa., 2020 U.S. Dist. LEXIS 108559).

  • June 22, 2020

    New York Justice Dismisses Breach Of Contract, Bad Faith Suit Filed Against Insurer

    NEW YORK — A New York County Supreme Court justice on June 9 dismissed a homeowner’s breach of contract and bad faith suit seeking coverage for water damages after determining that the insured failed to file a sworn proof of loss within 60 days as required by the policy (Michael Stein v. National General Insurance Co., No. 651065/2020, N.Y. Sup., New York Co., 2020 N.Y. Misc. LEXIS 2662).

  • June 22, 2020

    Insurer Subject To Specific Jurisdiction In Bad Faith Suit, Federal Judge Rules

    SIOUX FALLS, S.D. — A federal judge in South Dakota on June 11 ruled that an insurer is not entitled to dismissal of claims against it in an insurance bad faith lawsuit stemming from its denial of a worker’s compensation claim because the insurer is subject to specific jurisdiction in the federal district court (Tim Rounds v. The Hartford, et al., No. 20-4010, D. S.D., 2020 U.S. Dist. LEXIS 102412).

  • June 22, 2020

    Insurer’s Delay In Providing Policy Benefits Not In Bad Faith, Panel Rules

    SAN FRANCISCO — A federal district court did not err in granting summary judgment in favor of an automobile insurer in an insurance bad faith and breach of contract lawsuit stemming from an automobile accident because it was correct in determining that no reasonable jury could find that the insurer acted in bad faith in its handling of a third party’s claim for damages, a Ninth Circuit U.S. Court of Appeals panel ruled June 15 (Antonio Pureco, et al. v. Allstate Indemnity Co., No. 19-55061, 9th Cir., 2020 U.S. App. LEXIS 18848).

  • June 22, 2020

    Claims In Business Loss Income Suit Precluded By Virus Exclusion, Insurer Says

    LOS ANGELES — Dismissal of an insured bar’s claims in an insurance breach of contract and bad faith lawsuit stemming from its insurer’s denial of its business income loss coverage claim for losses sustained when the bar was forced to cease operations as a result of the spread of the novel coronavirus is necessary because the insured’s policy explicitly excludes coverage for such losses under a virus exclusion, the insurer argues in a June 3 motion to dismiss filed in California federal court (Pez Seafood DTLA LLC v. The Travelers Indemnity Co., et al., No. 20-4699, C.D. Calif.).

  • June 19, 2020

    Bars Sue Insurer For Bad Faith Over Denial Of Business Interruption Claims

    SAN FRANCISCO — Two bars sued their insurer in California federal court on June 18, alleging that the insurer breached the terms of their insurance policies and acted in bad faith in denying their claims for business interruption coverage after they were forced to cease operations in light of San Francisco’s shelter-in-place orders issued to combat the novel coronavirus pandemic (Grubstake Holdings LLC, et al. v. First Mercury Insurance Co., No. 20-4060, N.D. Calif.).