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Mealey's Insurance Bad Faith

  • April 25, 2018

    Reinsurer Seeks Federal Court Confirmation Of $82,130.44 Arbitration Award

    LOS ANGELES — A reinsurer on April 23 petitioned a California federal court for confirmation of an $82,130.44 arbitration award issued in its favor regarding a bad faith claim made against a reinsurance participation agreement (RPA) (Applied Underwriters Captive Risk Assurance Company Inc. v. O’Connell Landscape Maintenance Inc., No. 18-00683, C.D. Calif.).

  • April 25, 2018

    Federal Magistrate Judge Recommends Against Dismissal, Says Jurisdiction Exists

    OPELIKA, Ala. — An Alabama federal magistrate judge on April 20 recommended against dismissing a former college football player’s breach of contract and bad faith suit against a disability insurer after determining that the insurer does have sufficient minimum contacts with the state of Alabama for specific personal jurisdiction to exist (Kristopher Frost v. North American Capacity Insurance Co., No. 17-344, M.D. Ala., 2018 U.S. Dist. LEXIS 67957).

  • April 25, 2018

    Third-Party Bad Faith Claim Against Auto Insurer Cannot Survive

    HARRISBURG, Pa. — A Pennsylvania federal judge on April 23 dismissed a third-party bad faith claim alleged against the auto insurer of a first-party insured and a third-party insured after determining that pursuant to Pennsylvania law, the first-party insured can file only a first-party bad faith claim against the insurer and not a third-party bad faith claim (Anthony Vella v. State Farm Mutual Automobile Insurance Co., No. 17-1900, M.D. Pa., 2018 U.S. Dist. LEXIS 67419).

  • April 24, 2018

    Federal Magistrate Judge Allows Breach Of Contract Counterclaim To Proceed

    BALTIMORE — A Maryland federal magistrate judge on April 19 denied an insurer’s motion to dismiss a breach of contract counterclaim in an asbestos coverage dispute but granted the insurer’s motion to dismiss a bad faith counterclaim on the basis that the insured cannot allege a claim for bad faith if the applicable policy cannot be located (Pennsylvania National Mutual Casualty Insurance Co. v. Tate Andale Inc., No. 17-0670, D. Md., 2018 U.S. Dist. LEXIS 66981).

  • April 20, 2018

    Extracontractual Claims In Insurance Bad Faith Dispute Dismissed

    SHERMAN, Texas — Insureds have failed to show that they suffered any extreme injury independent of their breach of contract claim against their homeowners insurance provider to support their insurance bad faith claim, a federal judge in Texas ruled April 18 in dismissing the insured’s extracontractual claims in an insurance breach of contract and bad faith lawsuit (Guey Ming Yeh, et al. v. Safeco Insurance Co., No. 18-0026, E.D. Texas, 2018 U.S. Dist. LEXIS 65061).

  • April 19, 2018

    Panel Affirms Verdict In Favor Of Insureds On Breach Of Contract, Bad Faith Claims

    CORPUS CHRISTI, Texas — The 13th District Texas Court of Appeals on April 12 affirmed a jury’s verdict that an insurer breached its contract and acted in bad faith in handling its insureds’ claim for water damage and roof damage caused by a windstorm on the basis that the evidence presented to the jury supports the verdict (State Farm Lloyds v. Ruben and Mayra Vega, No. 13-16-00090, Texas App., 13th Dist., 2018 Tex. App. LEXIS 2592).

  • April 19, 2018

    New Evidence Allowed To Be Introduced In Insurance Bad Faith Suit

    DENVER — New evidence in an insurance breach of contract and bad faith lawsuit may be considered because it creates a genuine issue of material fact as to whether a home that was used in an illegal marijuana-growing operation was used primarily as a private residence, a federal magistrate judge in Colorado ruled April 17 in denying an insurer’s summary judgment motion (Connie Weingarten, et al. v. Auto-Owners Insurance Co., No. 17-1401, D. Colo., 2018 U.S. Dist. LEXIS 64004).

  • April 19, 2018

    Judge: Insurer Showed Basis For Denying Claim Stemming From Fire Loss

    JOHNSTOWN, Pa. — A federal judge in Pennsylvania on April 11 awarded summary judgment to an insurer accused of bad faith when denying a man’s $1 million claim for losses incurred following a fire at his home, finding that the evidence on the record demonstrates that the company conducted a reasonable investigation into whether the man actually lost a pair of 1.5 carat diamond earrings and a Louis Vuitton purse in the blaze (American National Property and Casualty Company v. Daniel J. Felix, No. 16-cv-147, W.D. Pa., 2018 U.S. Dist. LEXIS 61020).

  • April 18, 2018

    Insured’s Claims In Bad Faith Suit Do Not Meet Pleading Standard, Judge Says

    LAS VEGAS — Although an insured has standing to bring her claims against an insurer in a breach of contract and bad faith lawsuit, she has failed to meet the pleading standards under Federal Rule of Civil Procedure 8 in pleading those claims, a federal judge in Nevada ruled April 13 in granting the insurer’s motions to dismiss (Tanya Teodoro v. Allstate Fire and Casualty Insurance Co., No. 17-2135, D. Nev., 2018 U.S. Dist. LEXIS 63167).

  • April 17, 2018

    District Court Lacks Jurisdiction Over Bad Faith Suit, Judge Rules

    OKLAHOMA CITY — A federal judge in Oklahoma on April 10 remanded an insurance breach of contract and bad faith lawsuit to state court, ruling that the court lacks subject matter jurisdiction over the action because the amount in controversy is less than the statutory limit for removal (Laura Bivens v. Allstate Fire and Casualty Insurance Co., No. 17-1181, W.D. Okla., 2018 U.S. Dist. LEXIS 611110).

  • April 16, 2018

    Federal Judge Permits Insured To Depose Insurer’s Representative

    OKLAHOMA CITY — An Oklahoma federal judge on April 13 permitted an insured to depose a representative of an auto insurer regarding the insurer’s knowledge of a possible subrogation claim by a workers’ compensation insurer after determining that the deposition is relevant to the insured’s breach of contract and bad faith claims alleged against the auto insurer (George Andrew Morgan v. State Farm Mutual Automobile Insurance Co., No. 17-622, W.D. Okla., 2018 U.S. Dist. LEXIS 62563).

  • April 13, 2018

    California Jury Finds Insurer Acted In Bad Faith, Awards Insured More Than $22M

    SANTA ANA, Calif. — Following an almost $10 million award to an insured injured in an auto accident, a California state jury on April 10 awarded the insured $13 million in punitive damages after determining that the insurer acted in bad faith in handling the insured’s claim for underinsured motorist benefits (Omar Dauod v. GEICO Indemnity Insurance Co., No. 30-2014-00761274, Calif. Super., Orange Co.).

  • April 11, 2018

    No Coverage Afforded For Losses Incurred As A Result Of Madoff Ponzi Scheme

    NEW HAVEN, Conn. — A Connecticut federal judge on April 10 dismissed an insured’s claims for breach of contract and bad faith after determining that no coverage exists for the insured’s losses arising out of the Bernard Madoff Ponzi scheme because Madoff’s “wrongful entry” into the insured’s investment account is not the type of “wrongful entry” covered under the homeowners policies at issue (Susan Kostin v. Pacific Indemnity Co., et al., No. 17-1320, D. Conn., 2018 U.S. Dist. LEXIS 60846).

  • April 11, 2018

    Divided Pennsylvania Appellate Panel Overturns Bad Faith Ruling

    HARRISBURG, Pa. — In a divided opinion, a Pennsylvania Superior Court panel on April 9 overturned a state trial court’s award of more than $21 million to insureds in an insurance bad faith lawsuit against its automobile insurance provider and ordered the trial court to enter judgment in favor of the insurer, ruling that the “record does not support many of the trial court’s critical findings of fact” (Daniel Berg v. Nationwide Mutual Insurance Co. Inc., No. 713 MDA 2015, Pa. Super., 2018 Pa. Super. LEXIS 317).

  • April 11, 2018

    Florida Federal Judge Says Breach Of Duty-To-Defend Claim Must Be Dismissed

    MIAMI — A third-party claimant’s allegation for breach of the duty to provide an adequate defense cannot stand because the allegation is duplicative of the claimant’s bad faith allegations and is dependent on whether the insurer acted in bad faith in its handling of an auto claim on behalf of its insured, a Florida federal judge said April 6 (Wallace Mosley, a minor by and through his guardians, Dina Cellini & Roslyn Weaver, v. Progressive American Insurance Co., No. 14-62850, S.D. Fla., 2018 U.S. Dist. LEXIS 59907).

  • April 11, 2018

    5th Circuit Reverses Ruling That Overturned Jury Verdict In Arson Dispute

    NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on April 6 affirmed a district court’s judgment on an insured’s extracontractual claims, but reversed the district court’s judgment of law and instructed the district court to reinstate the jury verdict entered in favor of the insurer because the evidence supports the jury’s finding that the insured breached the policy’s cooperation condition by not providing records of its financial performance, relevant to arson that damaged the insured’s restaurant (Resie’s Chicken & Waffles Restaurant, et al. v. Acceptance Indemnity Company, et al., No. 16-20680, 5th Cir., 2018 U.S. App. LEXIS 8864).

  • April 11, 2018

    Insured’s Bad Faith Claim Arising Out Of Roofing Damage Fails, Judge Says

    PHILADELPHIA — An insured’s bad faith claim alleged against a homeowners insurer cannot stand because the insured failed to prove how the insurer’s calculation of depreciation costs for a damaged roof amounted to bad faith, a Pennsylvania federal judge said April 6 (Barbara Sands v. State Farm Fire and Casualty Co., No. 17-4160, E.D. Pa., 2018 U.S. Dist. LEXIS 58637).

  • April 10, 2018

    Judge: Insurer Can’t Rely On Fraudulent Misjoinder In Removal Of Bad Faith Suit

    GREENVILLE, Miss. — An insurer may not rely on the doctrine of fraudulent misjoinder as a basis for removal jurisdiction, a federal judge in Mississippi ruled April 5 in remanding an insurance breach of contract and bad faith lawsuit to state court (Kenneth Strachan, et al. v. State Farm Fire and Casualty Co., et al., No. 17-0138, N.D. Miss., 2018 U.S. Dist. LEXIS 58226).

  • April 10, 2018

    Judge Rules On Insurer’s Duty To Defend, Indemnify Breach Of Contract Claims

    CHICAGO — An insurer has no duty to defend or indemnify an insured against a manufacturer’s breach of contract claims but has a duty to defend the insured against a city’s claims of property damage to a water treatment facility, an Illinois federal judge ruled April 6, noting that a default judgment awarded to the city falls within policy exclusions (Westfield Insurance Co. v. Maxim Construction Corp., et al., No. 15-9358, N.D. Ill., 2018 U.S. Dist. LEXIS 59400).

  • April 10, 2018

    Panel Majority Says Insurers Breached Contract, Acted In Bad Faith By Failing To Settle

    CHICAGO — The majority of the Fifth District Illinois Appellate Court on April 5 affirmed a trial court’s ruling that insurers breached their contract and acted in bad faith by refusing to settle underlying environmental contamination claims filed against an insured after determining that the insurers used the threat of denying coverage in an attempt to dissuade the insured from settling the claims (Rogers Cartage Co. et al., v. The Travelers Indemnity Co., No. 5-16-0098, Ill. App., 5th Dist., 2018 Ill. App. LEXIS 206).