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Mealey's Insurance Bad Faith

  • April 16, 2024

    Parties In Mold, Construction Defects Suit File Supplemental Authorities In 11th Circuit

    ATLANTA — An insurer and insureds involved in a dispute over coverage for mold damage discovered in an insured hotel filed supplemental authorities on April 15 in the 11th Circuit U.S. Court of Appeals, citing cases that each side claims are relevant to the issue of whether the policy at issue provides coverage for losses caused by a construction defect even if the cost to fix the defect is not covered.

  • April 15, 2024

    Freddie Mac, Lead Insurer In D&O Coverage Dispute Finalize Settlement

    WASHINGTON, D.C. — Federal Home Loan Mortgage Corp. (Freddie Mac) notified a District of Columbia federal court that it has reached a settlement with the lead insurer in its breach of contract and bad faith lawsuit seeking directors and officers liability coverage for underlying expenses it incurred on behalf of its directors, officers and employees who were subpoenaed by the Securities and Exchange Commission during an investigation and subsequent lawsuit.

  • April 11, 2024

    Motion To Remand Third-Party Bad Faith Suit Against Auto Insurer Denied

    PHOENIX — An Arizona federal judge denied a motion to remand a third-party bad faith suit filed against an auto insurer because the auto insurer met its burden of showing that the federal amount in controversy requirement of $75,000 has been met.

  • April 11, 2024

    Extracontractual Claims Against Homeowners Insurer Cannot Proceed, Judge Says

    HOUSTON — An insured’s extracontractual claims against a homeowners insurer cannot proceed because no coverage is owed for hail and wind damage to the insured’s roof based on the insured’s failure to satisfy the policy’s residence premises requirement, a Texas federal judge said in granting the insurer’s motion for summary judgment.

  • April 10, 2024

    5th Circuit Won’t Rehear Insureds’ Dispute Over Arbitrability Of Storm Claims

    NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on April 9 denied two New Orleans property owners’ petition for panel or en banc rehearing of their appeal challenging the arbitrability of their claims for $7 million in damages caused by Hurricane Ida and for bad faith against a group of foreign and domestic insurers.

  • April 10, 2024

    Panel Rejects Disability Claimant’s Attempt To Recover Mental Anguish Damages

    ATLANTA — A district court did not err in finding that a disability claimant could not seek mental anguish damages on a breach of contract claim because mental anguish damages for breach of contract claims are barred under Alabama law, the 11th Circuit U.S. Court of Appeals said in affirming.

  • April 10, 2024

    Insured, Auto Insurer Ordered To Appraisal; Bad Faith Claim Dismissed

    DETROIT — A Michigan federal judge ordered an insured and her auto insurer to participate in an appraisal proceeding and dismissed the insured’s claim for breach of the implied covenant of good faith and fair dealing alleged against the auto insurer in the dispute over the insurer’s actual cash value estimate of the insured’s vehicle because Michigan law does not recognize a claim for breach of the implied covenant of good faith and fair dealing.

  • April 10, 2024

    No Evidence Supports Bad Faith Claim Against Auto Insurer, Federal Judge Says

    LOS ANGELES — An insured failed to present any evidence supporting its allegation that its auto insurer acted in bad faith by failing to properly settle underlying bodily injury claims arising out of an auto accident for which the insured conceded liability, a California federal judge said in granting the auto insurer’s motion for summary judgment.

  • April 09, 2024

    Bad Faith Claim Against Homeowners Insurer In Water Damage Dispute To Proceed

    AKRON, Ohio — A bad faith claim against a homeowners insurer in a water damage coverage dispute can proceed because the insureds allege sufficient facts to support their contention that the insurer lacked a reasonable basis for denying their claim for damages, an Ohio federal judge said April 8 in partially denying the insurer’s motion for judgment on the pleadings.

  • April 09, 2024

    Insurer Failed To Show That Suit-Limitation Clause Applies To Appraisal Demand

    PHILADELPHIA — A bad faith claim against a homeowners insurer can proceed because the insurer failed to show that its policy’s one-year suit limitation clause applies to a demand for appraisal, a Pennsylvania federal judge said April 8 in refusing to dismiss the insureds’ bad faith claim.

  • April 08, 2024

    Louisiana Panel Affirms Ruling In Insurer’s Favor In Hurricane Delta Dispute

    LAKE CHARLES, La. — A Louisiana appeals panel affirmed a lower court’s grant of an insurer’s exceptions of prescription and no cause of action and dismissal of an insured’s lawsuit seeking coverage for its Hurricane Delta property damage, finding that the insured’s related federal complaint did not interrupt prescription of the insured’s hurricane claims.

  • April 05, 2024

    Auto Insurer’s Notice Of Removal Was Timely Filed, Louisiana Federal Judge Says

    NEW ORLEANS — An auto insurer’s removal of an insured’s bad faith suit to Louisiana federal court was timely because the suit was removed within 30 days of the insurer learning that the amount in controversy exceeded the federal jurisdictional requirement of $75,000, a Louisiana federal judge said in denying the insured’s motion to remand.

  • April 05, 2024

    Insurer Must Provide Claims File In Bar Fight Coverage Bad Faith Suit

    ORLANDO, Fla. — In light of an insurer’s failure to respond to a third-party bad faith claimant’s motion to compel production of documents, a Florida federal magistrate judge on April 4 granted the motion, giving the insurance company two weeks to comply or face the possibility of sanctions.

  • April 05, 2024

    Bad Faith Claims Against Homeowners Insurer Should Not Proceed, Magistrate Says

    SAN ANTONIO — A Texas federal magistrate judge recommended granting a homeowners insurer’s motion for summary judgment on the insureds’ extracontractual claims based on alleged bad faith conduct by the insurer because a genuine issue of dispute existed regarding coverage for damage to the insureds’ roof.

  • April 05, 2024

    Bad Faith Claim Against Auto Insurer To Proceed, California Federal Judge Says

    FRESNO, Calif. —  An insured’s claim for bad faith against an auto insurer can proceed because the disparity between an arbitrator’s determination of the insured’s damages and the available policy limit supports the insured’s bad faith claim, a California federal judge said in denying the insurer’s motion for judgment on the pleadings.

  • April 04, 2024

    Coverage Owed For Mold Damages, Insureds Reiterate In Corrected Reply Brief

    ATLANTA — In a corrected reply brief, filed with the permission of the 11th Circuit U.S. Court of Appeals, insureds reiterate their argument that a district court erred in finding that no coverage is owed for mold damage discovered in an insured hotel because the policy at issue provides coverage for losses caused by a construction defect even if the cost to fix the defect is not covered.

  • March 29, 2024

    Insureds Cannot Mention Cost Of Mold Damage Or Mold Repairs During Trial

    PHILADELPHIA — Insureds who allege that their homeowners insurer breached its contract and acted in bad faith by refusing to pay for all damages caused by a tornado and rain during Hurricane Ida are precluded from mentioning the cost and scope of mold damages and repairs to their home during trial because the mold damages are clearly excluded under the homeowners policy, a Pennsylvania federal judge said.

  • March 28, 2024

    Bad Faith Claim Based On Insurer’s Denial Of Defense Not Time-Barred, Panel Says

    SANTA ANA, Calif. — A trial court erred in granting a homeowners insurer’s motion for summary judgment on an insured’s bad faith claim related to the insurer’s denial of a defense for an arbitration proceeding arising out of the insured’s alleged failure to disclose a water and mold damage in a home sold by the insured because the bad faith claim based on the denial of a defense was not time-barred under the policy, the Fourth District California Court of Appeal said.

  • March 28, 2024

    Trial Court Properly Awarded Sanctions To Disability Insurer, California Panel Says

    SANTA ANA, Calif. — A trial court properly sustained a disability insurer’s demurrer of an insured’s breach of contract and bad faith suit and properly awarded sanctions to the disability insurer because the suit was the third suit filed against the insurer and the insured failed to meet his burden of showing that the third suit was not frivolous or without merit, the Fourth District California Court of Appeals said.

  • March 27, 2024

    Fact Issue Exists On Notice Of Insured’s Property Damage Claim, Kentucky Panel Says

    FRANKFORT, Ky. — The Kentucky Court of Appeals reversed and remanded a trial court’s summary judgment ruling in favor of a homeowners insurer on breach of contract and bad faith claims after determining that a question of fact exists as to whether the homeowner provided prompt notice of a property damage claim.

  • March 27, 2024

    Radioactive Materials Exclusion Applies; Breach Of Contract, Bad Faith Claims Fail

    MILWAUKEE — Breach of contract and bad faith claims against two commercial general liability insurers fail because the policies’ radioactive materials exclusion bars coverage for an underlying suit seeking damages for bodily injuries caused by exposure to electromagnetic (EMF) radiation from the insured’s electric transformers, a Wisconsin federal judge said in granting the insurers’ motion for summary judgment.

  • March 27, 2024

    Federal Judge: Ambiguities Mean Insurer Owes Defense To Damaged Home’s Owners

    SAN DIEGO — A California federal judge granted in part a couple’s motion for partial summary judgment, finding that a renovator’s insurer owes them a duty to defend and indemnify due to damages caused to the couple’s duplex home while the renovator was replacing the roof because an ambiguously worded policy exclusion regarding apartments does not bar coverage.

  • March 27, 2024

    Insured’s Claims To Proceed Against Non-Issuing Insurance Companies, Judge Says

    OKLAHOMA CITY — Breach of contract and bad faith claims can proceed against an insurer’s related entities because the named insured stated sufficient facts to create a fact issue as to the liability of the non-issuing insurance companies.

  • March 26, 2024

    Auto Insurer’s Claims File Is Discoverable, Ohio Panel Says In Affirming Ruling

    CINCINNATI — A trial court did not err in ordering an auto insurer to produce its claims file because pursuant to Ohio precedent, an insurer’s claims file is discoverable up until the date of payment when insureds allege that the insurer acted in bad faith in handling a claim, the First District Ohio Court of Appeals said in affirming the trial court’s ruling.

  • March 26, 2024

    Bifurcation Of Breach Of Contract Claim From Bad Faith Claims Not Warranted

    DENVER — Bifurcation of an insured’s breach of contract claim from the insured’s bad faith claims is not warranted because it is not clear that the bad faith claims will fail or that the auto insurer would be prejudiced if the claims are not bifurcated, a Colorado federal judge said in denying the insurer’s motion for bifurcation.