Mealey's Insurance Bad Faith
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April 18, 2024
N.J. Panel Affirms Order Granting Judgment For Progressive In Auto Claim Row
TRENTON, N.J. — A New Jersey appellate court on April 17 affirmed a lower court order granting summary judgment to Progressive Insurance Co. in its insured’s breach of contract and bad faith suit after Progressive denied the insured’s auto accident claim for alleged misrepresentation in the policy application, finding “no reason to second-guess” the lower court’s finding that the insured “lacked standing to pursue a claim for the payoff of her lease.”
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April 18, 2024
No Additional Coverage Owed For Water Damages Caused By Sewer, Drain Backup
MEMPHIS, Tenn. — An insured is not entitled to additional coverage for water damage incurred at its property because the policy at issue provides only $5,000 in coverage for water damage caused by sewer or drain backups, a Tennessee federal judge said in granting the insurer’s motion for summary judgment on claims for breach of contract, bad faith, misrepresentation and negligent actions.
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April 18, 2024
Commercial Property Insurer’s Removal Notice Was Timely Filed, Federal Judge Says
DALLAS — A commercial property insurer’s notice of removal of a breach of contract and bad faith suit was timely filed because the insurer filed the notice of removal within 30 days of learning that complete diversity of citizenship among the parties existed, a Texas federal judge said in denying the insured’s motion to remand the suit to state court.
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April 18, 2024
Breach Of Contract, Bad Faith Claims To Proceed Against Landlord Insurer
OKLAHOMA CITY — Breach of contract and bad faith claims filed against an insurer can proceed because the insureds, who are seeking coverage for damage to the roof of their rental property, identify and describe specific actions to support of the claims, an Oklahoma federal judge said in denying the insurer’s motion to dismiss.
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April 18, 2024
Trial Court Properly Entered Judgment For Insurers In Water Damage Coverage Suit
HARTFORD, Conn. — A trial court properly granted summary judgment in favor of insurers on breach of contract and extracontractual claims in a dispute over coverage for water damage in their home because no issues of fact exist regarding which insurer issued the homeowners policy at issue in the dispute, a panel of the Connecticut Appellate Court said in affirming the trial court’s ruling.
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April 18, 2024
Chapter 11 Liquidation Plan Becomes Effective In Vesttoo Bankruptcy Cases
WILMINGTON, Del. — In a notice outlining several bar dates, the Official Committee of Unsecured Creditors told a Delaware federal bankruptcy court that a Chapter 11 plan of liquidation for Vesttoo Ltd. and its dozens of affiliates went into effect after conditions precedent were “satisfied or waived.”
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April 17, 2024
Insureds Sue Excess D&O Insurers For Bad Faith, Seek Coverage For Receiver’s Claims
CLEVELAND — The former chief executive officer and the general counsel of Dream Center Education Holdings LLC sued their excess directors and officers liability insurers for breach of contract and bad faith in an Ohio federal court, alleging that the insurers’ denials of coverage for a receiver’s underlying lawsuit “are both baseless and unreasonable.”
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.