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Mealey's Insurance Bad Faith

  • June 26, 2019

    Insurer Has No Duty To Defend, Indemnify Shareholder Derivative Suit, Judge Rules

    CHICAGO — A federal judge in Illinois on June 24 held that an insurer has no duty to defend or indemnify against an underlying shareholder derivative lawsuit because the policy’s insured versus insured (IVI) exclusion bars coverage and the insured has failed to establish that any exception to the exclusion applies to trigger coverage (World Water Works Holdings, Inc. v. Continental Casualty Co., et al., No. 17-5237, N.D. Ill., Eastern Div., 2019 U.S. Dist. LEXIS 104938).

  • June 26, 2019

    Judge Partly Grants Insurer’s Motion To Dismiss In Coverage Suit Over Bank Fraud

    WILMINGTON, Del. — A Delaware judge on May 31 granted in part and denied in part an insurer’s motion to dismiss claims in an insured’s lawsuit seeking coverage for its alleged losses caused by an employee who conspired to commit bank fraud, finding that the insured has not sufficiently pleaded a bad faith claim against the insurer (WSFS Financial Corporation, et al. v. Great American Insurance Company, No. N18C-09-088, Del. Super., 2019 Del. Super. LEXIS 265).

  • June 26, 2019

    MGM Resorts: Insurer’s Refusal To Defend Mass Shooting Claims Is ‘Unconscionable’

    LAS VEGAS — MGM Resorts International and others on June 19 sued their commercial general liability insurer in a Nevada federal court for breach of contract and bad faith, contending that the insurer wrongfully breached its duty to defend them against more than 4,000 claims arising from the Oct. 1, 2017, mass shooting at the Route 91 Harvest Country Music Festival (MGM Resorts International, et al. v. Zurich American Insurance Company, No. 19-01051, D. Nev.).

  • June 25, 2019

    Homeowners Insurer Moves To Dismiss Water Damage Coverage Suit

    CAMDEN, N.J. — A homeowners insurer argues in a June 21 motion to dismiss in a New Jersey federal court that an insured’s breach of contract and bad faith suit stemming from the insured’s water damage claim must be dismissed because no coverage is owed under the policy and the insured failed to prove that the insurer’s denial of coverage was unreasonable (Johann Smith et al., v. State Farm Fire and Casualty Co., No. 19-10319, D. N.J.).

  • June 24, 2019

    Indiana Appeals Panel Says Insured’s Bad Faith Suit Is Barred By Res Judicata

    INDIANAPOLIS — The Indiana Court of Appeals on June 20 affirmed the dismissal of an insured’s breach of contract and bad faith complaint against her homeowners insurer after determining that the insured’s complaint, seeking coverage for water and mold damage, is barred by the doctrine of res judicata because the same claims between the same parties were litigated to a final conclusion on the merits in a prior lawsuit filed by the insured (Brenda White v. American Family Mutual Insurance Co., No. 18A-CT-2874, Ind. App., 2019 Ind. App. Unpub. LEXIS 766).

  • June 24, 2019

    Insured Failed To Support Claim For Punitive Damages In Water Coverage Dispute

    NEWARK, N.J. — An insured homeowner seeking coverage for water damage to her home cannot maintain a claim for punitive damages against her insurer because the insured failed to allege that the insurer’s actions in partially denying her claim were driven by actual malice or a wanton and willful disregard, a New Jersey federal judge said June 20 in dismissing the claim for punitive damages (Elizabeth Johnson v. Encompass Insurance Co., No. 17-3527, D. N.J., 2019 U.S. Dist. LEXIS 103290).

  • June 24, 2019

    Jury’s Punitive Damages Award Not Contrary To Law, New Mexico Panel Affirms

    ALBUQUERQUE, N.M. — A New Mexico Court of Appeals panel on May 23 affirmed a trial court’s denial of an auto insurer’s motion for judgment notwithstanding the verdict after determining that the trial court did not err in allowing a jury’s punitive damages verdict to stand because the jury did, in fact, find that the auto insurer acted in bad faith in its handling of the insured’s auto claim (Claude Wilson v. Farmers Insurance Company of Arizona, No. A-1-CA-36300, N.M. App., 2019 N.M. App. Unpub. LEXIS 140).

  • June 24, 2019

    Insurer’s Summary Judgment Motion In Insurance Bad Faith Dispute Denied

    SAN DIEGO — A federal judge in California on May 31 ruled that genuine issues of material fact exist as to whether an insurer acted in bad faith in its investigation and evaluation of her claim for coverage under an automobile insurance policy, denying the insurer’s motion for summary judgment (Suzanne Mattson v. United Service Automobile Association, et al., No. 18-222, S.D. Calif., 2019 U.S. Dist. LEXIS 91654).

  • June 24, 2019

    Auto Insurer Permitted To Introduce Evidence Of Payment To Insured

    DENVER — A Colorado federal magistrate judge on June 11 determined that an auto insurer will be permitted to introduce evidence regarding its payment of its policy limits to an insured following the insured’s filing of a breach of contract and bad faith suit against the insurer (Beverly Cribari v. Allstate Fire & Casualty Insurance Co., No. 16-2450, D. Colo.,  2019 U.S. Dist. LEXIS 97738).

  • June 24, 2019

    Bad Faith Dispute Over Flood Damage Remanded To State Court

    RIVERSIDE, Calif. — A federal judge in California on June 12 ruled that an adjuster was not improperly joined in an insurance breach of contract and bad faith lawsuit against a homeowners insurance provider and remanded the action to state court (Maria Gast v. Universal North America Insurance Co., et al., No. 19-0647, C.D. Calif., 2019 U.S. Dist. LEXIS 99582).

  • June 24, 2019

    Judge: Third-Party Beneficiary Lacks Standing To Sue Auto Insurer For Bad Faith

    HAMMOND, Ind. — A federal judge in Indiana on June 18 ruled that a third-party beneficiary lacks standing to bring a claim for insurance bad faith against an automobile insurance provider because she is not a named insured under the insurance policy for which she sought underinsured motorist coverage (Nicole Schweihs v. State Farm Insurance Co., No. 18-140, N.D. Ind., 2019 U.S. Dist. LEXIS 101475).

  • June 21, 2019

    Bad Faith Claim Against Homeowners Insurer To Proceed, Federal Judge Says

    SCRANTON, Pa. — A claim of bad faith alleged against a homeowners insurer that allegedly refused to adjust a personal property loss estimate following a fire will proceed because the insureds alleged sufficient facts in support of the claim, a Pennsylvania federal judge said June 20 (James Obelkevich, et al. v. Safeco Insurance Company of Illinois, No. 18-1111, M.D. Pa., 2019 U.S. Dist. LEXIS 103177).

  • June 20, 2019

    Trial Court Properly Refused To Consider Bad Faith Claims, Panel Says

    KANSAS CITY, Mo. — The Third Division of the Western District of the Missouri Court of Appeals on June 18 determined that a trial court did not err in refusing to consider the bad faith claims alleged against an insurer because the trial court correctly determined that it had no jurisdiction based on a mandate issued by the Missouri Supreme Court (Franklin D. Allen v. Atain Specialty Insurance Co., No. WD81677, Mo. App., W.D., Div. 3, 2019 Mo. App. LEXIS 961).

  • June 19, 2019

    Bad Faith Claim To Proceed; Questions Of Fact Exist On Assessment Of Injuries

    ORLANDO, Fla. — An auto insurer is not entitled to summary judgment on a bad faith claim brought against the insurer by a third-party claimant who was injured by an insured in an auto accident because questions of fact exist regarding the insurer’s assessment of the claimant’s injuries, a Florida federal judge said June 18 (Robyn Holtzapple v. Nationwide Mutual Fire Insurance Co., No. 17-2026, M.D. Fla., 2019 U.S. Dist. LEXIS 101494).

  • June 19, 2019

    No Coverage Owed For Water Damage To Vehicle, West Virginia High Court Says

    CHARLESTON, W.Va. — A trial court did not err in bifurcating breach of contract claim from a bad faith claim and other extracontractual claims and did not err in granting an auto insurer’s motion for summary judgment on the breach of contract claim because it is clear that no coverage is afforded for water damage to an insured’s vehicle, the West Virginia Supreme Court of Appeals said June 17 (Maurice Dosso v. Farmers and Mechanics Insurance Cos., et al., No. 17-0664, W.Va. Sup., 2019 W. Va. LEXIS 380).

  • June 19, 2019

    California Panel Affirms No Homeowners Coverage For Jewelry Store Shooting

    SAN FRANCISCO — A California appeals panel on June 17 affirmed that there is no coverage under a homeowners insurance policy's personal injury provision for the discharge of a firearm after a robbery attempt, finding that the victim has failed to present any evidence to create a triable issue of material fact as to whether the first shot in the robbery attempt was intentional (CSAA Insurance Exchange, et al. v. Oscar Herrera, No. A153429, Calif. App., 1st Dist., 2019 Cal. App. Unpub. LEXIS 4061).

  • June 18, 2019

    Federal Judge Says Bad Faith Claim Against Life Insurance Agent Can Proceed

    BIRMINGHAM, Ala. — A life insurance agent was not fraudulently joined to a putative class action suit filed against an insurer and the agent because the plaintiffs sufficiently alleged that the agent had a special relationship with the plaintiffs and acted in bad faith by selling the plaintiffs policies that were not appropriate for the plaintiffs’ needs, an Alabama federal judge said June 17 (Kee Goostree, et al. v. Liberty National Life Insurance Co., et al., No. 19-71, N.D. Ala., 2019 U.S. Dist. LEXIS 100604).

  • June 17, 2019

    Motion To Remand Water, Mold Damage Suit Denied; Judge Says Damages Exceed $75K

    BIRMINGHAM, Ala. — An Alabama federal judge on June 14 denied a motion to remand filed by insureds alleging claims for breach of contract and bad faith arising out of a water and mold damage claim after determining that the insurers produced sufficient evidence showing that the amount in controversy exceeds the federal jurisdictional minimum of $75,000 (Matthew B. Menendez, et al. v. American Strategic Insurance Corp., et al., No. 19-443, N.D. Ala., 2019 U.S. Dist. LEXIS 99975).

  • June 14, 2019

    Panel:  Policy’s ‘Classification Limitation’ Does Not Bar Coverage For $5M Judgment

    ST. LOUIS — A Missouri appeals panel on June 11 reversed a garnishment court’s finding that an insurance policy’s “Classification Limitation” barred coverage for an underlying $5 million judgment arising from a fatal shooting outside of a night club, finding that the garnishment court was not at liberty to decide whether the night club owner was acting on behalf of another business such that the named insured could not be liable for his negligence (Latronya Adams v. Certain Underwriters at Lloyd's of London, et al., No. ED106121, Mo App., Eastern Dist., Div. 3, 2019 Mo. App. LEXIS 931).

  • June 14, 2019

    Mississippi Federal Judge Denies Motion To Remand Bad Faith Suit Against Insurer

    JACKSON, Miss. — A Mississippi federal judge on June 12 denied an insured’s motion to remand an insurance breach of contract and bad faith suit arising out of a fire damage claim made under a homeowners policy after determining that complete diversity exists because the insurer’s adjuster is not a proper defendant (Tramon Colenburg v. Amica General Agency LLC, et al., No. 19-24, S.D. Miss., 2019 U.S. Dist. LEXIS 98564).

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