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Mealey's Insurance Bad Faith

  • October 17, 2019

    Disability Claimant Says Termination Of Benefits Was Breach Of Contract

    FRESNO, Calif. — A disability insurer acted in bad faith and breached its contract in terminating a claimant’s long-term disability (LTD) benefits because the insurer’s termination was not reasonable and not based on reliable medical evidence, the claimant alleges in an Oct. 15 complaint filed in California federal court (Jennifer Sims v. Life Insurance Company of North America, No. 19-1460, E.D. Calif.).

  • October 17, 2019

    Insureds Permitted To Amend Breach Of Contract, Bad Faith Complaint

    PIERRE, S.D. — A South Dakota federal judge on Oct. 16 granted a motion to amend a complaint by insureds involved in a coverage dispute for the costs of complying with an injunction that required them to tear down and rebuild their house after determining that the insureds alleged sufficient facts to support their breach of contract and bad faith claims (Joseph Sapienza, et al. v. Liberty Mutual Fire Insurance Co., No. 18-3015, D. S.D., 2019 U.S. Dist. LEXIS 179017).

  • October 15, 2019

    Federal Magistrate Largely Denies Insured’s Discovery Request In Crime Coverage Suit

    FRESNO, Calif. — A federal magistrate judge in California on Oct. 3 denied in part and granted in part a recycling company insured’s motion to compel in its breach of contract, bad faith and fraud lawsuit seeking crime insurance coverage for its alleged $5 million in losses caused by employee theft (rePlanet Holdings, Inc. v. Federal Insurance Company, No. 19-00133, E.D. Calif., 2019 U.S. Dist. LEXIS 173206).

  • October 15, 2019

    High Court Refuses To Review Dismissal Of Bad Faith Suit Against Auto Insurer

    WASHINGTON, D.C. — The U.S. Supreme Court on Oct. 15 denied a petition for writ of certiorari filed by an insured who argued that his breach of contract and bad faith complaint should be reinstated because a trial court erred in dismissing his complaint based on its finding that any alleged impropriety regarding an arbitration proceeding between the insured and the insurer should have been addressed while that proceeding was ongoing and not in the instant suit (Gabriel A. Maalouf v. Praetorian Insurance Co., No. 19-5816, U.S. Sup.).  

  • October 15, 2019

    Suit Against Auto Insurer Remanded For Failure To Timely File Removal Notice

    SACRAMENTO, Calif. — A California federal judge on Oct. 8 remanded an insured’s breach of contract and bad faith suit after determining that the auto insurer’s notice of removal was not filed within 30 days after learning that the amount in controversy exceeded the federal jurisdictional minimum of $75,000 (Selwyn Vos v. USAA General Indemnity Co., et al., No. 19-1186, E.D. Calif., 2019 U.S. Dist. LEXIS 175833).

  • October 15, 2019

    Trial Court’s Judgment On Breach Of Contract, Bad Faith Claims Affirmed

    LOS ANGELES — A trial court did not err in entering judgment for an auto insurer following a bench trial because the insureds failed to prove that the insurer breached its contract or acted in bad faith in handling their claim following an auto accident, the Second District California Court of Appeal said Oct. 8 (Dionne Cooper, et al. v. Farmers Insurance Exchange, No. B292019, Calif. App., 2nd Dist., Div. 7, 2019 Cal. App. Unpub. LEXIS 6787).

  • October 11, 2019

    No Contractual Relationship Leads To Dismissal Of Insurance Bad Faith Claim

    PHOENIX — A federal judge in Arizona on Oct. 7 ruled that dismissal of an insurance bad faith claim brought against an insurance adjuster stemming from a denial of workers’ compensation benefits is proper because a claimant failed to sufficiently state a claim for relief in arguing that the claims adjuster failed to properly investigate the claim (Jorge Garibaldi v. Everest National Insurance Co., et al., No. 19-2558, D. Ariz., 2019 U.S. Dist. LEXIS 174602).

  • October 11, 2019

    Magistrate:  Exclusions Do Not Excuse Errors And Omissions Insurer’s Duty To Defend

    DENVER — A federal magistrate judge in Colorado on Oct. 8 concluded that although two exclusions in a real estate errors and omissions insurance policy bar coverage for an underlying lawsuit alleging that the insured failed to disclose construction defects when selling a home, the insurer’s duty to defend is not excused because the insurer has failed to establish that the underlying allegations fall “solely and entirely” under the exclusions (Juan Carlos Lua v. QBE Insurance Corporation, No. 18-01233, D. Colo., 2019 U.S. Dist. LEXIS 174983).

  • October 11, 2019

    Judgment In Favor Of Life Insurer Affirmed; Statutes Do Not Apply Retroactively

    SAN DIEGO — The Fourth District California Court of Appeal on Oct. 9 affirmed a judgment in favor of a life insurer on claims of breach of contract and bad faith after determining that two California statutes that require insurers to provide a 60-day grace period before terminating a policy for nonpayment of premium cannot be retroactively applied to policies that were issued prior to the enactment of the statutes (Blakely McHugh, et al. v. Protective Life Insurance, No. D072863, Calif. App., 4th Dist., Div. 1, 2019 Cal. App. LEXIS 998).

  • October 10, 2019

    Judge: Reservation Of Rights Letter Delay Does Not Support Bad Faith Claim

    SALT LAKE CITY — A federal judge in Utah on Oct. 3 ruled that a third-party claimant has failed to show that an insurer’s delay in issuing a reservation of rights letter after providing its insured with a defense in an underlying civil lawsuit is sufficient to support a bad faith refusal to settle claim brought by the third party (Owners Insurance Co. v. Jacob Taylor Dockstader, No. 18-173, D. Utah, 2019 U.S. Dist. LEXIS 147286).

  • October 10, 2019

    Bad Faith Claims Fails; Legitimate Coverage Dispute Existed, Federal Judge Says

    OKLAHOMA CITY — An Oklahoma federal judge on Oct. 9 granted an auto insurer’s motion for summary judgment on a bad faith claim after determining that the insurer met its burden of proving that a legitimate coverage dispute existed regarding the insured’s claim for benefits under the auto policy (Rick Sober, et al. v. Columbia National Insurance Co., No. 18-736, W.D. Okla., 2019 U.S. Dist. LEXIS 175333).

  • October 08, 2019

    Bad Faith Sanctions Not Appropriate; Legitimate Coverage Dispute Existed

    MOUNT VERNON, Ill. — The Fifth District Illinois Appellate Court on Oct. 4 affirmed a trial court’s denial of an insured’s motion for bad faith sanctions after determining that the trial court did not abuse its discretion in finding that sanctions were not appropriate because a legitimate coverage dispute existed as to whether the insurer was responsible for the cost of rewiring an entire home following a fire (Jeffrey Patzius v. American Family Insurance Co., No. 5-19-0533, Ill. App., 5th Dist., 2019 Ill. App. Unpub. LEXIS 1894).

  • October 07, 2019

    Louisiana Appellate Panel Overturns Judgment In Bad Faith Claims Handling Suit

    SHREVEPORT, La. — A Louisiana appeals court panel on Sept. 25 ruled that a state trial court erred in concluding that the underinsured motorist (UM) provisions of a claimant’s automobile insurance policy provided underinsured motorist coverage to the occupants of the insured vehicle and that an insurer acted in bad faith in its handling of claims made after an automobile accident (Courtney Handy v. State Farm Mutual Automobile Insurance Co., No. 52,905-CA, La. App., 2nd Cir., 2019 La. App. LEXIS 1627).

  • October 07, 2019

    Parties Debate Whether Jury Instruction Rulings In Bad Faith Suit Were Proper

    DENVER — Parties in an insurance breach of contract and insurance bad faith lawsuit stemming from an automobile insurance dispute recently asked a 10th Circuit U.S. Court of Appeals panel to determine whether a federal district court erred in issuing rulings on certain jury instructions relating to her claims and in prohibiting a claimant from submitting evidence from an underlying arbitration proceeding (Luzetta Murphy-Sims v. Owners Insurance Co., No. 18-1392, 10th Cir.).

  • October 07, 2019

    Washington High Court Majority Says Adjuster Has No Duty To Insureds

    SEATTLE — The majority of the Washington Supreme Court on Oct. 3 reversed a court of appeals’ ruling in favor of insureds who alleged a claims for bad faith and violation of Washington’s Consumer Protection Act (CPA) after determining that under Washington law, an insurance company’s claims adjuster does not owe a duty of good faith to an insured (Moun Keodalah, et al. v. Allstate Insurance Co., et al., No. 95867-0, Wash. Sup., 2019 Wash. LEXIS 591).

  • October 07, 2019

    Federal Judge Says Bad Faith Claims Against Adjuster, Agent Cannot Stand

    JACKSON, Miss. — A Mississippi federal judge on Sept. 29 dismissed an insurance adjuster and an insurance agent from an insured’s breach of contract and bad faith suit arising out of a claim for fire damages to the insured’s home after determining that the insured cannot maintain the claims against the broker and adjuster because any actions performed by the agent and adjuster were done so on behalf of the insurer (Kimberly McAfee v. Allstate Insurance Co. et al., No. 18-300, S.D. Miss., 2019 U.S. Dist. LEXIS 167522).

  • October 04, 2019

    Insured Alleged Specific Actions In Support Of Bad Faith Claims

    PITTSBURGH — A Pennsylvania federal magistrate judge on Oct. 2 denied an auto insurer’s motion to dismiss an insured’s bad faith claims after determining that the insured alleged specific actions by the insurer to support the bad faith claims (Kirsti Loughery v. Mid-Century Insurance Co., No. 19-383, W.D. Pa., 2019 U.S. Dist. LEXIS 170926).

  • October 03, 2019

    Oregon Law Applies To Insured’s Bad Faith Suit Against Auto Insurer

    SEATTLE — A Washington federal judge on Oct. 1 determined that Oregon law must be applied to an insured’s breach of contract and bad faith suit filed against an auto insurer because there is a conflict between the laws of Washington and Oregon and the policy’s choice-of-law provision states that Oregon law should be applied (Alix Gierke v. Allstate Property and Casualty Insurance Co., No. 19-71, W.D. Wash., 2019 U.S. Dist. LEXIS 170870).

  • October 03, 2019

    Insured:  Motion To Dismiss Hurricane Maria Suit Is ‘Exercise In Misdirection’

    BOSTON — An insured in an Oct. 1 motion opposes an insurer’s motion to dismiss its bad faith lawsuit alleging that the insurer has made no payment on almost half of its 228 claims for a total of $39.6 million in damage caused by Hurricane Maria, arguing that the motion to dismiss for lack of personal jurisdiction “is an exercise in misdirection away from” its contacts with the U.S. District Court for the District of Massachusetts (Capital Crossing Servicing Company LLC v. MAPFRE Praico Insurance Company, No. 19-11157, D. Mass.).

  • October 03, 2019

    Homeowners Insurer Breached Contract In Denying Water Damage Claim, Judge Says

    LAS VEGAS — A Nevada federal judge on Sept. 30 determined that a homeowners insurer breached its contract in denying a claim for water damage caused by vermin or rodents chewing on a water supply line because the policy clearly afforded coverage for the loss; however, the judge determined that questions of fact exist as to whether the insurer acted in bad faith in its handling of the insureds’ claim (Robert and Myrna Danganan v. American Family Mutual Insurance Co., No. 17-2786, D. Nev., 2019 U.S. Dist. LEXIS 169806).