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Mealey's Insurance Bad Faith

  • January 27, 2020

    Alaska Federal Judge Bifurcates Bad Faith Claim For Trial But Not Discovery

    ANCHORAGE, Alaska — An Alaska federal judge on Jan. 22 granted an auto insurer’s motion to bifurcate a bad faith claim for trial but denied the insurer’s motion to bifurcate discovery on the bad faith claim after determining that the insured is entitled to conduct discovery on the bad faith claim as long as the bad faith claim remains as part of the suit (Julia Thogmartin v. State Farm Mutual Automobile Insurance Co., No. 19-252, D. Alaska, 2020 U.S. Dist. LEXIS 11631).

  • January 24, 2020

    Judge Dismisses Breach Of Contract, Bad Faith Claims, Allows PPCA Claim To Proceed

    MCALLEN, Texas — A federal judge in Texas on Jan. 21 dismissed an insured’s breach of contract and bad faith claims against his homeowners insurer in a coverage dispute over wind and hail property damage but allowed the insured’s claim under the Texas Prompt Payment of Claims Act (PPCA) to remain (Fred Lopez v. Allstate Texas Lloyds, No. 18-260, S.D. Texas, 2020 U.S. Dist. LEXIS 9390).

  • January 24, 2020

    Plaintiffs Not Named As Insureds Cannot Assert Breach Of Contract, Bad Faith Claims

    CHARLESTON, W.Va. — Plaintiffs who are not named as insureds on a business property insurance policy cannot bring claims for breach of contract and bad faith against the insurer of a building that was destroyed by fire even if they have an insurable interest in the property, a West Virginia federal judge said Jan. 10 in granting the insurer’s motion for summary judgment (Mid-State Automotive Inc., et al. v. Harco National Insurance Co., No. 19-407, S.D. W.Va., 2020 U.S. Dist. LEXIS 4470).

  • January 23, 2020

    New York Federal Judge Dismisses Suit Seeking Additional Coverage For Water Damage

    BROOKLYN, N.Y. — Breach of contract and bad faith claims alleged against a homeowners insurer following a dispute over coverage for water damages must be dismissed because the insureds failed to file suit within two years of the loss as required by the policy’s limitations provision, a New York federal judge said Jan. 22 (Mildred Guy, et al. v. The Automobile Insurance Company of Hartford Connecticut, et al., No. 18-2620, E.D. N.Y., 2020 U.S. Dist. LEXIS 10701).

  • January 23, 2020

    Federal Judge Dismisses Declaratory Judgment Claim On Insurer’s Duty To Settle

    ORLANDO, Fla. — A Florida federal judge on Jan. 22 dismissed an insured’s claim seeking a declaration that an auto insurer had a nondelegable duty to settle a claim against the insured after determining that the claim seeks an advisory opinion and is duplicative of the insured’s bad faith claim (Penny Christine Hitchcock v. USAA Casualty Insurance Co., No. 18-1986, M.D. Fla., 2020 U.S. Dist. LEXIS 10459).

  • January 23, 2020

    Failure To Defend, Indemnify Additional Insureds Constitutes Bad Faith, Insurer Contends

    MEMPHIS, Tenn. — An insurer breached its contract and acted in bad faith by refusing to defend and indemnify two additional insureds named as defendants in a personal injury suit stemming from an electric shock that occurred while an employee was setting up amusement rides at a fair, the insurer of the additional insureds claims in a Jan. 17 complaint filed in Tennessee federal court (Liberty Corporate Capital Ltd. v. Ace American Insurance Co., No. 20-2038, W.D. Tenn.).

  • January 22, 2020

    Florida Federal Judge Dismisses Insured’s Bad Faith Suit Against Insurer

    MIAMI — An insurer did not breach its contract or act in bad faith by failing to specifically disclose that an insured's personal injury protection policy (PIP) included mileage reimbursement for medical visits, a Florida federal judge said Jan. 17 in dismissing the insured’s complaint with prejudice (Christine Forde v. Allstate Fire and Casualty Insurance Co., No. 19-62536, S.D. Fla., 2020 U.S. Dist. LEXIS 9418).

  • January 22, 2020

    Insurer Tells 11th Circuit: Bad Faith Claim Should Be Sent To Arbitration

    ATLANTA — An insurer says in a Jan. 10 reply brief to the 11th Circuit U.S. Court of Appeals that a district court should have compelled arbitration in Hong Kong to resolve a claim for bad faith in failing to settle a lawsuit seeking damages for injuries that occurred during a cruise ship excursion (Lynn McCullough, et al. v. AIG Insurance Hong Kong Ltd., No. 19-12100, 11th Cir.).

  • January 21, 2020

    Breach Of Contract, Bad Faith Claims Fail; Injured Woman Was Not An Insured

    PHOENIX — A business auto insurer owes no coverage under its policy for an accident that injured a woman who was part of a tour group visiting the western United States because the woman was not occupying the tour bus at the time of the accident as required by the policy, an Arizona federal judge said Jan. 17 in granting the insurer’s motion for summary judgment on breach of contract and bad faith claims (Sandrine Mounier, et al. v. RLI  Corp., et al., No. 19-1778, D. Ariz., 2020 U.S. Dist. LEXIS 8288).

  • January 21, 2020

    Breach Of Contract, Bad Faith Claims Against Life Insurer To Proceed

    PORTLAND, Ore. — Claims alleging breach of contract and bad faith against a life insurer can proceed, an Oregon federal judge said Jan. 10 after determining that the insured sufficiently alleged facts to support the claims arising out of the life insurer’s alleged mistake in issuing a loan to the insured based on what the insurer believed was the value of her life insurance policy  (Kathleen Tibbets v. Athene Annuity & Life Assurance Company of New York, No. 19-796, D. Ore., 2020 U.S. Dist. LEXIS 4488).

  • January 15, 2020

    Coverage Exists For Auto Accident But Bad Faith Claim Fails, Judge Says

    CLEVELAND — An Ohio federal judge on Jan. 14 determined that coverage for a car accident caused by an unknown tortfeasor is afforded under an auto policy’s uninsured motorist provision; however, the judge said the insureds’ claim for bad faith against the auto insurer cannot stand because the insurer had a reasonable basis to deny coverage based on the information it had at the time it made the coverage decision (Amos Baldwin, et al. v. Allstate Fire and Casualty Insurance Co., No. 18-1078, N.D. Ohio, 2020 U.S. Dist. LEXIS 6147).

  • January 15, 2020

    Bad Faith Claim Against Disability Income Insurer To Proceed, Judge Says

    SCRANTON, Pa. — A Pennsylvania federal judge on Jan. 13 denied a disability income insurer’s motion for partial summary judgment on a bad faith claim because the insured provided sufficient evidence from which a jury could find that the insurer acted in bad faith in denying the claim for disability income benefits (Joseph D. Dileo v. Federated Life Insurance Co., No. 18-628, M.D. Pa., 2020 U.S. Dist. LEXIS 5003).

  • January 15, 2020

    Insured Asks Texas High Court To Reverse Ruling As To Bad Faith, PPCA Claims

    AUSTIN, Texas — An insured recently asked the Texas Supreme Court to reverse a lower court’s ruling in favor of its commercial property insurer on its claims for bad faith and under Texas’ Prompt Payment of Claims Act (PPCA) arising from wind and hail property damage (Steven Biasatti, et al. v. GuideOne National Insurance Company, et al., No. 18-0911, Texas Sup.).

  • January 14, 2020

    Panel Decides Application Of Policy’s Suit Limitation Clause On Insured’s Claims

    SEATTLE — While an insurance policy’s one-year suit limitation clause precludes a condominium association from suing its insurer for breach of contract, a Washington appeals panel held Jan. 13 that the clause does not bar the association’s extracontractual claims under the Washington Insurance Fair Conduct Act (IFCA) and the Washington Consumer Protection Act (CPA) (West Beach Condominium v. Commonwealth Insurance Company of America, No. 79676-3-I, Wash. App., Div. 1, 2020 Wash. App. LEXIS 58).

  • January 14, 2020

    Insured’s Auto Coverage Dispute Stayed Pending Answer Of Certified Question

    ALBUQUERQUE, N.M. — A New Mexico federal judge on Jan. 10 stayed an insured’s suit alleging that an auto insurer acted in bad faith after determining that a stay is warranted until the New Mexico Supreme Court answers a certified question in a similar suit regarding uninsured and underinsured motorist coverage in policies issued in New Mexico (Helen Bhasker v. Financial Indemnity Co., No. 17-260, D. N.M., 2020 U.S. Dist. LEXIS 4716).

  • January 14, 2020

    Amount-In-Controversy Requirement Not Met In Bad Faith, Auto Dispute

    ALBUQUERQUE, N.M. — A New Mexico federal judge on Jan. 10 remanded a bad faith suit filed against an auto insurer that denied an insured’s uninsured motorist claim after determining that the insurer failed to prove that the amount in controversy exceeds the federal jurisdictional minimum requirement of $75,000 (Ismael Acosta Yanez v. State Farm Fire and Casualty Co., No. 19-546, D. N.M., 2020 U.S. Dist. LEXIS 4384).

  • January 14, 2020

    No Uninsured Motorist Coverage Afforded For Stolen Vehicles, Judge Says

    ALBUQUERQUE, N.M. — An auto insurer did not breach its contract or act in bad faith by denying its insureds’ claim for uninsured motorist (UM) coverage following the theft of their vehicles because the policy clearly excluded UM coverage for stolen vehicles, a New Mexico federal judge said Jan. 6 (Laurent Dockery, et al. v. Allstate Insurance Co., No. 19-190, D. N.M., 2020 U.S. Dist. LEXIS 2166).

  • January 13, 2020

    Bad Faith Claim In Flood Damage Suit Withstands Insurer’s Dismissal Bid

    WHITE PLAINS, N.Y. — Dismissal of an insured’s bad faith claim against his homeowners insurance provider stemming from a property damage claim is not warranted because it does not rest on the same facts as the insured’s breach of contract claim, a federal judge in New York ruled Dec. 30 (John Ruiz v. Liberty Mutual Fire Insurance Co., No. 19-4399, S.D. N.Y., 2019 U.S. Dist. LEXIS 222713).

  • January 12, 2020

    Auto Insurer Not Responsible For Punitive Damages For Acts Of Unknown Tortfeasor

    ALBUQUERQUE, N.M. — Punitive damages cannot be collected from an auto insurer as part of a claim for uninsured motorist benefits for the acts of an unknown tortfeasor, a New Mexico federal magistrate judge said Dec. 31 in granting the insurer’s motion for summary judgment on the insureds' claim for punitive damages (Shawn Ammons et al., v. Sentry Insurance Co., No. 19-419, D. N.M., 2019 U.S. Dist. LEXIS 222969).

  • January 10, 2020

    California Winery Operator Seeks Coverage For ‘Smoke Taint’ Caused By Wildfires

    OAKLAND, Calif. — An operator of vineyards and winemaking operations in California on Jan. 3 sued London insurers for breach of contract and bad faith in a California federal court, alleging that they wrongfully refused to pay for smoke exposure damage to its finished wines caused by the October 2017 wildfires in Sonoma and Napa County, Calif., and seeking $12 million for its loss (Vintage Wine Estates, Inc. v. Royal & Sun Alliance Insurance PLC, et al., No. 20-00101, N.D. Calif.).