Mealey's Insurance Bad Faith

  • September 06, 2019

    No Coverage Owed For Deterioration Of Basement Walls; Suit Dismissed

    NEW HAVEN, Conn. — A Connecticut federal judge on Sept. 4 dismissed a breach of contract and bad faith suit filed against a homeowners insurer after determining that the policy at issue clearly excludes coverage for the deterioration of the insureds’ foundation walls as a result of the use of defective concrete when the home was built (Marianne Gilmore, et al. v. Teachers Insurance Co., No. 18-1856, D. Conn., 2019 U.S. Dist. LEXIS 151006).

  • September 06, 2019

    Trial Court Erred In Dismissing Bad Faith Claim Based On Claim Investigation

    ALBUQUERQUE, N.M. — The New Mexico Court of Appeals on Sept. 5 determined that a trial court did not err in finding that an insured is not owed uninsured benefits under an auto policy for an assault that occurred at or near an uninsured vehicle; however, the trial court did err in dismissing the insured’s bad faith claim predicated on the auto insurer’s investigation and evaluation of the claim (Matthew Haygood v. United Services Automobile Association, et al., No. A-1-CA-36158, N.M. App., 2019 N.M. App. LEXIS 112).

  • September 05, 2019

    Insured Offered Sufficient Facts To Support Punitive Damages Claim In Auto Suit

    DENVER — A Colorado federal magistrate judge on Sept. 4 granted an insured’s motion to amend a complaint to add a request for punitive damages in an auto coverage suit because the insured timely filed the motion to amend and the insured offered sufficient facts to support the allegation that the auto insurer’s conduct in denying her claim for underinsured motorist benefits was willful and wanton (Kimberly Argo v. State Farm Mutual Automobile Insurance Co., No. 18-2059, D. Colo., 2019 U.S. Dist. LEXIS 149966).

  • September 05, 2019

    Wisconsin Judge Says Discovery Cannot Proceed On Bad Faith Claim

    MILWAUKEE — A Wisconsin federal judge on Aug. 30 granted a homeowners insurer’s motion for a protective order precluding an insured from engaging in discovery on a bad faith claim because the insured failed to provide sufficient facts in support of a breach of contract claim as required under Wisconsin law for discovery to proceed on the bad faith claim (Cody Christopherson v. American Strategic Insurance Corp., No. 19-202, E.D. Wis., 2019 U.S. Dist. LEXIS 148323).

  • September 05, 2019

    Breach Of Contract, Bad Faith Claims To Proceed Against Insurer In Water Damage Suit

    PHOENIX —An Arizona federal judge on Sept. 4 said claims for breach of contract and bad faith in a water damage coverage suit can proceed because issues of fact exist as to whether additional coverage is afforded under a commercial general liability policy and as to whether the insurer reasonably adjusted the insured’s claim for damages (Adams Craig Acquisitions LLC, et al. v. Atain Specialty Insurance Co., et al., No. 18-00817, D. Ariz., 2019 U.S. Dist. LEXIS 150227).

  • September 04, 2019

    Claims In Bad Faith Dispute Over Homeowners Insurance Policy Coverage Trimmed

    PHOENIX — A federal judge in Arizona on Aug. 29 ruled that an insured has sufficiently pleaded evidence in support of its claims for insurance bad faith and breach of the covenant of good faith and fair dealing in a homeowners insurance dispute arising from property damage sustained during policy activity at the insured’s home (James W. Denby v. American Family Insurance, No. 17-2648, D. Ariz., 2019 U.S. Dist. LEXIS 147421).

  • August 30, 2019

    Claimant’s Bad Faith Claim Survives Dismissal Bid In Auto Insurance Dispute

    OKLAHOMA CITY — An insurer failed to show that its actions in handling a claim for coverage under an automobile insurance policy were reasonable, a federal judge ruled Aug. 28 in denying the insurer’s motion for partial summary judgment (Tracey Daniels, et al. v. CSAA General Insurance Co., No. 18-1115, W.D. Okla., 2019 U.S. Dist. LEXIS 146422).

  • August 29, 2019

    Judge: Bad Faith Suit Over Auto Insurance Coverage Properly Removed

    RICHMOND, Va. — A federal judge in Virginia on Aug. 26 ruled that remand of an insurance breach of contract and bad faith lawsuit to state court is not warranted because an insurer properly removed the action to federal court on the basis of diversity jurisdiction (Kenneth L. Rockwell v. State Farm Mutual Automobile Insurance Co., No. 19-237, E.D. Va., 2019 U.S. Dist. LEXIS 145204).

  • August 28, 2019

    Panel: Claims Are Potentially Subject To Employment Practices Liability Coverage

    SANTA ANA, Calif. — A California appeals panel on Aug. 27 held that a lower court erred in finding that an employment practices liability insurance policy’s wage-and-hour exclusion bars coverage for an underlying lawsuit brought against the owner and operator of more than 250 Pizza Hut and Wing Street restaurants, finding that many of the underlying allegations are potentially subject to coverage (Southern California Pizza Co., LLC v. Certain Underwriters at Lloyd's, London, No. G056243, Calif. App., 4th Dist., Div. 3, 2019 Cal. App. Unpub. LEXIS 5712).

  • August 26, 2019

    Statutory Bad Faith Claim Survives Dismissal Bid In Homeowners Insurance Dispute

    PHILADELPHIA — A federal judge in Pennsylvania on Aug. 13 ruled that although insureds have failed to sufficiently state a majority of their claims against an insurer in a homeowners insurance dispute, one of the insureds has properly established a “prima facie case of statutory bad faith” (Mary T. Neri, et al. v. State Farm Fire and Casualty Co., No. 19-0355, E.D. Pa., 2019 U.S. Dist. LEXIS 36820).

  • August 26, 2019

    Majority: Court Erred In Appointing Special Master In Katrina Suit Against Insurer

    JACKSON, Miss. — A Mississippi Supreme Court majority on Aug. 22 held that a lower court abused its discretion when it reassigned a lawsuit alleging that an insurer misadjusted 232 unidentified Hurricane Katrina-related insurance claims and appointed a special master, vacating both orders and remanding (Safeco Insurance Company of America v. Mississippi ex rel. Jim Hood, No. 2017-IA-01554-SCT, Miss. Sup., 2019 Miss. LEXIS 296).

  • August 23, 2019

    Insurance Adjusters Cannot Be Held Liable For Insurance Bad Faith, Judge Rules

    MILWAUKEE — A federal judge in Wisconsin on Aug. 15 ruled that insureds have failed to sufficiently plead their claim for insurance bad faith against two insurance adjusters because the adjusters were acting as agents for the insureds’ homeowners insurance provider when they inspected the insureds’ home and determined that their property did not sustain hail damage (David B. Williams, et al. v. The Travelers Home and Marine Insurance Co., et al., No. 19-301, E.D. Wis., 2019 U.S. Dist. LEXIS 138106).

  • August 23, 2019

    Breach Of Contract, Bad Faith Claims Dismissed Against Homeowners Insurer

    MILWAUKEE — A Wisconsin federal judge on Aug. 21 dismissed claims of breach of contract and bad faith against a homeowners insurer after determining that the insurer did not breach the  policy by allowing equipment in the insureds’ garage to be removed when the insurer authorized repairs to begin on the insureds’ home, which was damaged in a fire (John P. Butler, et al. v. Electric Insurance Co., No. 19-146, E.D. Wis., 2019 U.S. Dist. LEXIS 141897).

  • August 21, 2019

    Claims File Materials Are Not Discoverable For Contract Claims Against Auto Insurer

    CINCINNATI — An auto insurer is not required to produce materials protected by the work product doctrine or attorney-client privilege in its claims file or to produce its representatives for depositions regarding the materials until after the breach of contract and declaratory judgment claims are resolved because the materials relate to the bad faith claim, which was bifurcated from the contractual claims, the First District Ohio Court of Appeals said Aug. 16 (Stephen Loukinas, et al. v. State Farm Mutual Automobile Insurance Co., No. C-180462, Ohio App., 1st Dist., 2019 Ohio App. LEXIS 3387).

  • August 20, 2019

    Judge Explains Dismissal Of Breach Of Implied Covenant Claim Against Insurer

    MINNEAPOLIS — A federal judge in Minnesota on Aug. 16 explained his ruling dismissing a man’s claim for breach of the implied warranty of good faith and fair dealing against his insurer, stating that he believes the state addressed the issue of unreasonable handling of claims in insurance contracts in its legislature and that a state appeals panel’s ruling recognizing the cause of action was not persuasive (Selective Insurance Company of South Carolina v. Amit Sela, No. 16-cv-4077, D. Minn., 2019 U.S. Dist. LEXIS 138666).

  • August 20, 2019

    Bad Faith Claim Against Property Insurer Will Proceed, Federal Judge Says

    OKLAHOMA CITY — An insured’s claim for bad faith against a commercial property insurer that refused to pay for a full roof replacement can proceed because the insured sufficiently alleged facts in support of the claim, an Oklahoma federal judge said Aug. 19 (Atlantis Car Care Inc. v. The Phoenix Insurance Co., No. 19-524, W.D. Okla., 2019 U.S. Dist. LEXIS 140249).

  • August 19, 2019

    Insured, Assignee Ask 9th Circuit To Reverse Dismissal Of Bad Faith Insurance Suit

    PASADENA, Calif. — An insured and his assignee, who were involved in a motor vehicle accident, recently asked the Ninth Circuit U.S. Court of Appeals to reverse a lower federal court’s dismissal of their bad faith lawsuit against the insured’s personal automobile insurer, arguing that the insurer “unreasonably rejected” the assignee’s $100,000 policy limits settlement offer by failing to comply with the terms of the offer (Ethan Volungis, et al v. Liberty Mutual Fire Insurance, No. 18-16600, 9th Cir.).

  • August 19, 2019

    Insured Failed To Prove Auto Insurer Acted With Malice In Handling Claim For Benefits

    JACKSON. Miss. — A Mississippi federal judge on Aug. 14 granted an auto insurer’s motion for summary judgment on a bad faith claim after determining that the insured failed to prove that the insurer actually denied the claim or that the insurer acted with malice or gross negligence in handling the insured’s auto claim (Jerrie G. Magruder v. Elliot H. Brashier, et al., No. 18-588, S.D. Miss., 2019 U.S. Dist. LEXIS 137236).

  • August 15, 2019

    Calif. Federal Judge Remands Bad Faith Suit, Says Complete Diversity Does Not Exist

    LOS ANGELES — A California federal judge on Aug. 13 remanded an insured’s breach of contract and bad faith suit against its insurer and its insurance broker after determining that the insured sufficiently stated a claim of negligence against the insurance broker and, therefore, proved that complete diversity among the parties does not exist (Rabbit Ridge Wine Sales v. Unigard Insurance Co., No. 19-5440, C.D. Calif., 2019 U.S. Dist. LEXIS 136774). 

  • August 15, 2019

    Federal Judge Approves Parties’ Settlement On Behalf Of Minor In Bad Faith Suit

    SAN DIEGO — A California federal judge on Aug. 12 adopted a magistrate judge’s recommendation to approve a settlement between a minor child and an auto insurer, agreeing with the magistrate judge that the proposed settlement in the breach of contract and bad faith suit is fair and in the best interests of the child (Tera Lisicky, et al. v. USAA Casualty Insurance Co., et al., No. 18-1642, S.D. Calif., 2019 U.S. Dist. LEXIS 135837).

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