Mealey's Insurance Bad Faith
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June 21, 2018
Coverage May Exist; Policy Covers Collapse Caused By Hidden Decay, Judge Says
BRIDGEPORT, Conn. — An insurer’s motion to dismiss a complaint filed by insureds seeking coverage for their cracking foundation walls caused by a chemical reaction in the concrete must be denied because a possibility for coverage exists as the policy at issue provides coverage for collapse caused by hidden decay and defective construction materials, a Connecticut federal judge said June 20 (Mark C. Maki, et al. v. Allstate Insurance Co., No. 17-1219, D. Conn., 2018 U.S. Dist. LEXIS 102708).
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June 19, 2018
Objections Overruled, Insurance Bad Faith Suit Remanded To State Court
HOUSTON — A federal judge in Texas on June 18 overruled a series of objections filed by an insurer in an insurance breach of contract and bad faith lawsuit, ruling that a federal magistrate judge properly recommended that insureds’ lawsuit against the insurer stemming from denial of their homeowners insurance claim should not have been removed from state court (Adam F. Massey, et al. v. Allstate Vehicle and Property Insurance Co., No. 18-1144, S.D. Texas, 2018 U.S. Dist. LEXIS 101068).
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June 19, 2018
Judge: No Coverage For Insured’s Costs From Nondefective Repairs
SALT LAKE CITY — Two insurers owe no coverage to an insured contractor for costs incurred from repairing nondefective parts of construction projects as a result of the process to remove and replace a subcontractor’s nonconforming lumber, a Utah federal judge ruled June 18 (Big-D Construction Midwest LLC v. Zurich American Insurance Co., No. 16-952, D. Utah).
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June 15, 2018
9th Circuit Says Life Insurer Did Not Act In Bad Faith In Canceling Policy
ANCHORAGE, Alaska — The Ninth Circuit U.S. Court of Appeals on June 14 affirmed a district court’s dismissal of a bad faith claim against a life insurer after determining that the insurer acted reasonably in canceling a life insurance policy following the insured’s failure to pay the policy premium (Anna Nowak v. Genworth Life and Annuity Insurance Co., No. 17-35799, 9th Cir., 2018 U.S. App. LEXIS 16001).
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June 14, 2018
Judge Certifies Question In Bad Faith Suit Against Insurer, Claims Administrator
SIOUX CITY, Iowa — In a dispute against an employer’s workers’ compensation insurer and a third-party claims administrator, an Iowa federal judge on June 13 declined to dismiss bad faith claims and instead certified a question to the Iowa Supreme Court (Samuel De Dios v. Indemnity Insurance Company of North America, et al., No. 18-4015, N.D. Iowa, 2018 U.S. Dist. LEXIS 98833).
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June 14, 2018
Delay In Benefit Payment Not In Bad Faith, Federal Judge Rules
LAS VEGAS — Summary judgment in favor of an insurer on a claim for bad faith in an insurance breach of contract and bad faith lawsuit stemming from an automobile insurance dispute is proper because the insurer did not unreasonably delay payment of benefits to its insured, a federal judge in Nevada ruled June 12 in partially granting the insurer’s summary judgment motion (Brian Vierra Gonzalez v. Government Employees Insurance Co., No. 17-3055, D. Nev., 2018 U.S. Dist. LEXIS 98099).
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June 13, 2018
Life Insurer, Investor Seek Pre-Motion Conference On Dismissal Of Class Action
NEW YORK — A life insurer and a private investment firm wrote a New York federal court on June 8 requesting a pre-motion conference on a motion to dismiss a class action alleging breach of policies by the unlawful increase of the premium costs to recoup costs associated with the acquisition (Derek Fan, et al. v. Phoenix Life Insurance Co., et al., No. 18-01288, S.D. N.Y.).
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June 11, 2018
Damages Award In Bad Faith Suit May Not Be Reduced, Colorado High Court Rules
DENVER — An award of damages in an insurance bad faith breach of contract lawsuit cannot be reduced by an “amount unreasonably delayed but eventually paid” by an insurer under Colorado law because the law does not provide for that type of reduction, the Colorado Supreme Court ruled May 29 (American Family Mutual Insurance Co. v. Guillermo Barriga, et al., No. 2018 CO 42, Colo. Sup., 2018 Colo. LEXIS 436).
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June 11, 2018
1-Year Statute Of Limitations Does Not Apply To Bad Faith Claim Against Insurer
DENVER — The Colorado Supreme Court on May 29 determined that a one-year statute of limitations does not apply to a contractor’s bad faith claim alleged against a homeowners insurer because the one-year statute of limitations at issue applies only to suits involving penalties imposed under Colorado’s penal statutes (Rooftop Restoration, Inc., v. American Family Mutual Insurance Co., No. 17SA31, Colo. Sup., 2018 CO 44; 2018 Colo. LEXIS 438).
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June 11, 2018
Water Back-Up Endorsement Applies; Insurer Only Owes Limited Coverage, Judge Says
CHARLOTTE, N.C. — A North Carolina federal judge on June 6 granted an insurer’s motion for summary judgment in a water damage coverage suit after determining that the policy’s endorsement for water and sewage backup clearly limits coverage to $10,000 (Nancy Troutman, et al. v. QBE Insurance Corp., No. 17-464, W.D. N.C., 2018 U.S. Dist. LEXIS 96115).
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June 11, 2018
Evidence Supports Insurer’s Argument That Decedent Misrepresented Use Of Nicotine
BRONX, N.Y. — A New York justice on May 15 denied a motion for summary judgment filed by plaintiffs in a life insurance dispute and dismissed claims for breach of contract and bad faith alleged by the decedent’s wife after determining that the evidence supports the insurer’s contention that the decedent misrepresented his use of nicotine on his policy application (Global Energy Efficiency Holdings Inc., et al. v. William Penn Life Insurance Company of New York, No. 25687/2014E, N.Y. Sup., Bronx Co., 2018 N.Y. Misc. LEXIS 1926).
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June 11, 2018
Bad Faith Claim Dismissed; Coverage Denial For Cracking Walls Was Fairly Debatable
BRIDGEPORT, Conn. — A Connecticut federal judge on June 6 dismissed claims alleging bad faith and violations of Connecticut’s Unfair Trade Practices Act and Unfair Insurance Practices Act alleged against a homeowners insurer because the insurer’s coverage denial was fairly debatable; however, the judge refused to dismiss the breach of contract claim against an insurer after determining that there is a possibility that coverage exists under policies issued before 2006 for cracking in the insureds’ basement walls as a result of a chemical reaction (Stephen Rosenberger, et al. v. Amica Mutual Insurance Co., No. 17-612, D. Conn., 2018 U.S. Dist. LEXIS 95345).
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June 8, 2018
Panel Says Insured Should Be Permitted To Amend Claims In Life Insurance Dispute
RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals on May 25 dismissed an appeal and remanded the insured’s suit alleging that a life insurer breached its contract and acted in bad faith by increasing the policy premiums after determining that the insured should be provided the opportunity to amend the complaint to plead additional facts to support the claims alleged against the insurer (William Hancock Sr. v. Americo Financial Life and Annuity Insurance Co., et al., No. 17-1976, 4th Cir., 2018 U.S. App. LEXIS 13890).
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June 8, 2018
Facts In Insured’s Complaint Support Claims For Bad Faith And Negligence, Judge Says
HARTFORD, Conn. — An insured sufficiently pleaded facts in support of its claims for bad faith and negligence arising out of an insurer’s handling of a property damage claim because the insured offered facts in support of its allegations that the insurer’s actions were intentional and malicious, a Connecticut state judge said May 10 in denying the insurer’s motion to strike (Corner House Condominium Association v. State Farm Fire and Casualty Co., No. HHDCV136068831S, Conn. Sup., 2018 Conn. Super. LEXIS 933).
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June 6, 2018
Professional Services Exclusion Bars Coverage For Qui Tam Suit, 9th Circuit Affirms
SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on June 4 affirmed a lower federal court's finding that coverage for an underlying qui tam action brought against an insured under the False Claims Act (FCA) is barred because the underlying lawsuit alleges that the insured’s professional services caused ineligible students and ineligible universities to submit claims for federal financial aid to the U.S. Department of Education (HotChalk Inc. v. Scottsdale Insurance Co., No. 16-17287, 9th Cir., 2018 U.S. App. LEXIS 14884).
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June 6, 2018
Automobile Insurance Bad Faith Dispute Remanded To State Court
LAS VEGAS — An insurer has failed to show that the amount in controversy in an insurance breach of contract and bad faith lawsuit exceeds the statutory limits and that removal of the action to federal court is necessary, a federal judge in Nevada ruled June 4 in granting an insured’s motion to remand (Arturo A. Pradera v. GEICO Insurance Agency Inc., et al., No. 18-0156, D. Nev., 2018 U.S. Dist. LEXIS 93101).
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June 5, 2018
Appellate Panel Withdraws Bad Faith Ruling Following Insureds’ Rehearing Petition
HARRISBURG, Pa. — The Pennsylvania Superior Court on May 31 granted a petition for reargument filed by insureds in a bad faith suit and withdrew its decision to overturn a state trial court’s award of more than $21 million in favor of the insureds (Daniel Berg v. Nationwide Mutual Insurance Co. Inc., No. 713 MDA 2015, Pa. Super.).
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June 5, 2018
Nevada Federal Judge Remands Bad Faith Suit, Says Amount In Controversy Not Met
RENO, Nev. — A Nevada federal judge on June 1 remanded an insured’s suit alleging claims for breach of contract and bad faith against an auto insurer after determining that the suit does not meet the minimum jurisdictional amount in controversy threshold amount because the insured is not seeking the full limits of the policy’s uninsured motorist benefits (Daniel Vasco v. Allstate Fire and Casualty Insurance Co., No. 18-076, D. Nev., 2018 U.S. Dist. LEXIS 91730).
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June 5, 2018
Judge Finds Fact Issues In Excess Coverage Dispute Over $9M Defects Judgment
DENVER — Genuine issues of material fact exist on whether an excess insurance policy covers a $9 million construction defects judgment, a Colorado federal judge ruled June 1, denying summary judgment on breach of contract and bad faith claims (Hansen Construction Inc., et al. v. Everest National Insurance Co., No. 16-02902, D. Colo., 2018 U.S. Dist. LEXIS 92944).
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June 1, 2018
Bad Faith Claim Dismissed, Premised On Same Facts As Breach Of Contract Claim
NEW HAVEN, Conn. — An insured’s bad faith claim alleged against an insurer that refused to pay for expenses incurred following damage to the insured’s air conditioning units cannot stand because the bad faith claim is premised on the same facts as the breach of contract claim, a Connecticut federal judge said May 30 in partially granting the insurer’s motion to dismiss (Quinn Fable Advertising Inc. v. Sentinel Insurance Co. Ltd., No. 17-1795, D. Conn., 2018 U.S. Dist. LEXIS 89770).