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Mealey's Insurance Bad Faith

  • November 28, 2018

    Bad Faith Claims Will Proceed Against Auto Insurer, Federal Judge Says

    MIAMI — A plaintiff’s bad faith claims against an insurer will move forward because issues of fact exist as to whether the insurer acted in good faith when handling a claim filed against its insured that ultimately resulted in a $22.6 million judgment against the insured, a Florida federal judge said Nov. 25 in denying the insurer’s motion for summary judgment (Wallace Mosley, et al. v. Progressive American Insurance Co., No. 14-62850, S.D. Fla., 2018 U.S. Dist. LEXIS 199078).

  • November 26, 2018

    Motion To Compel In Insurance Bad Faith Suit Deferred Pending Further Evidence

    FRESNO, Calif. — A federal magistrate judge in California deferred ruling on a third-party claimant’s motion to compel further responses to two discovery requests in an insurance breach of contract and bad faith lawsuit, ruling that although the discovery requests are relevant, not overly broad, vague and ambiguous and not subject to either attorney-client privilege or privacy under California law, an insurer should be allowed to supplement the record with evidence showing that the two interrogatories are burdensome (Jennifer M. Tucker v. AMCO Insurance Co., No. 17-1761, E.D. Calif., 2018 U.S. Dist. LEXIS 197140).

  • November 26, 2018

    Bad Faith Suit Remanded To Arizona State Court; Amount In Controversy Not Met

    PHOENIX — A breach of contract and bad faith suit filed by insureds seeking damages for a fire at their home must be remanded to Arizona state court because the amount in controversy does not exceed $75,000, the amount necessary to retain federal jurisdiction, an Arizona federal judge said Nov. 20 (Stephen O’Bresley, et al., v. Farm Bureau Property & Casualty Insurance Co., et. al., No. 18-2553, 2018 U.S. Dist. LEXIS 197739).

  • November 21, 2018

    Federal Magistrate Judge Recommends Bad Faith Claim Be Dismissed Without Prejudice

    SCRANTON, Pa. — An insured’s bad faith claim should be dismissed without prejudice, a Pennsylvania federal magistrate judge recommended Nov. 19 after determining that the bad faith claim is preempted by the Pennsylvania Motor Vehicle Financial Responsibility Law (MVFRL) , which provides the exclusive remedy for a denial of first-party medical benefits (Paige Barnard v. Liberty Mutual Insurance Corp., et al., No. 18-1218, M.D. Pa., 2018 U.S. Dist. LEXIS 197852).

  • November 20, 2018

    Breach Of Contract, Bad Faith Suit Remanded; Amount In Controversy Not Met

    LAS VEGAS — An insured’s suit alleging claims for breach of contract and bad faith must be remanded to Nevada state court because the amount in controversy is less than the federal jurisdictional minimum, a Nevada federal judge said Nov. 18 (Thomas Horst v. State Farm Mutual Auto Insurance Co., No. 18-2041, D. Nev., 2018 U.S. Dist. LEXIS 196734).

  • November 20, 2018

    Remand Of Suit Seeking Business Interruption Costs Not Warranted, Judge Says

    TRENTON, N.J. — A New Jersey federal judge on Nov, 19 denied a motion to remand filed by insureds in a suit alleging that their insurer acted in bad faith in ceasing payments for business interruption losses caused by mold growth within the insureds’ dental office because the suit does not present an exceptional circumstance that would warrant abstention by the federal court (Anthony J. Vitale DMD, et al. v. State Farm Fire and Casualty Co., No. 18-8988, D. N.J., 2018 U.S. Dist. LEXIS 197043).

  • November 19, 2018

    Disability Suit Remanded; Insurer Failed To Prove Damages Exceed $75,000

    LONDON, Ky. — A Kentucky federal judge on Nov. 15 remanded a disability claimant’s breach of contract and bad faith suit after determining that the disability insurer failed to prove by a preponderance of the evidence that the claimant’s damages will exceed the federal jurisdictional minimum of $75,000 (Connie L. Hacker v. Aetna Life Insurance Co., No. 18-30, E.D. Ky., 2018 U.S. Dist. LEXIS 194961).

  • November 16, 2018

    Motion To Dismiss Denied; Claim Against Insurer’s Parent Company Supported

    SAN FRANCISCO — A California federal judge on Nov. 14 denied a motion to dismiss an insured’s third amended complaint after determining that the insured plausibly alleged that the insurer and its parent company acted in bad faith by engaging in a scheme to hide coverage for a water damage claim from the insured (Tam Vu v. Liberty Mutual Insurance Co., et al., No. 18-3594, N.D. Calif., 2018 U.S. Dist. LEXIS 194471).

  • November 16, 2018

    Nevada Appeals Panel Says Insured’s Breach Of Contract, Bad Faith Claims Cannot Stand

    LAS VEGAS — The Nevada Court of Appeals on Nov. 7 affirmed a trial court’s ruling in favor of an auto insurer on claims of breach of contract and bad faith after determining that any alleged impropriety regarding an arbitration proceeding between the insured and the insurer should have been addressed while that proceeding was ongoing and not in the instant suit (Gabriel A. Maalouf v. Praetorian Insurance Co., No. 73640-COA, Nev. App., 2018 Nev. App. Unpub. LEXIS 875).

  • November 16, 2018

    Breach Of Contract, Bad Faith Claims Fail; No Duty Owed To Third Party

    TACOMA, Wash. — A third party injured in a slip-and-fall accident in a grocery store cannot assert claims for breach of contract, bad faith and negligent claims against the store’s claims administrator because the claims administrator owed no duty to the third party under Washington law, a Washington federal judge said Nov. 14 (Victoria J. Pruett v. Safeway Inc., et al., No. 17-5399, W.D. Wash., 2018 U.S. Dist. LEXIS 194197).

  • November 15, 2018

    Insured Cannot Pursue Extracontractual Claims Against Insurer, Judge Says

    SEATTLE — An insured cannot pursue any extracontractual claims, including a bad faith claim,  against an auto insurer for its refusal to submit the insured’s underinsured motorist claim to arbitration, a Washington federal judge said Nov. 14 in partially granting the insurer’s motion for summary judgment (Candice Mills v. Unitrin Auto & Home Insurance Co., No. 18-831, W.D. Wash., 2018 U.S. Dist. LEXIS 194263).

  • November 13, 2018

    Delay In Settling Collapse Claim Was Unreasonable, Vexatious, Panel Says

    ELGIN, Ill. — A trial court did not err in finding that an insurer’s delay in settling a claim following the collapse of an insured building was unreasonable and vexatious because the insurer failed to offer a written explanation for the denial of certain costs, failed to complete the property investigation and failed to complete a determination of liability, the Second District Illinois Appellate Court said Nov. 8 (Charter Properties Inc. v. Rockford Mutual Insurance Co., No. 2-17-0637, Ill. App., 2nd Dist., 2018 Ill. App. LEXIS 829).

  • November 12, 2018

    On Remand, Texas Court Again Rules In Insurer’s Favor In Storm Damage Dispute

    FORT WORTH, Texas — After the Texas Supreme Court remanded an appellate court’s ruling in favor of a homeowners insurer in a coverage dispute over storm damage, an appellate panel on Nov. 8 concluded that no evidence exists that the insureds’ property damage was caused by or solely attributable to a covered peril (Richard Seim, et al. v. Allstate Texas Lloyds, et al., No. 02-16-00050, Texas App., 2nd Dist., 2018 Tex. App. LEXIS 9190).

  • November 12, 2018

    Judge Declines To Bifurcate Claims In Bad Faith Dispute

    DENVER — Bifurcation of proceedings in an insurance breach of contract and bad faith lawsuit is not necessary because it will not “be more convenient and would [not] preserve the resources” of a federal district court in Colorado and the parties involved, a federal judge in Colorado ruled Oct. 26 in denying the motion (Pinon Sun Condominium Association Inc. v. Atain Specialty Insurance Co., et al., No. 17-1595, D. Colo., 2018 U.S. Dist. LEXIS 183941).

  • November 12, 2018

    Claims Dismissed Against Insurer Over Denied Coverage For Basement Wall Cracking

    BRIDGEPORT, Conn. — A Connecticut federal judge on Nov. 9 dismissed insureds’ claims for breach of contract and violation of the Connecticut Unfair Trade Practices Act (CUTPA) against an insurer regarding the denial of coverage for cracking caused by allegedly defective concrete in the insureds’ basement walls (Robert John Houlihan, et al. v. Safeco Insurance Company of America, et al., No. 18-184, D. Conn., 2018 U.S. Dist. LEXIS 192032).

  • November 12, 2018

    Trial Court Properly Found Insurer Did Not Breach Contract In Denying Auto Claim

    LOS ANGELES — A trial court properly granted an auto insurer’s motion for summary judgment in a suit alleging that the insurer breached its contract and acted in bad faith because there is no triable issue of fact that the damage to the insured’s vehicle was caused by wear and tear, an excluded cause of loss under the policy, the Second District California Court of Appeal said Oct. 30 (Edik Ghadimian v. Geico Casualty Co., No. B281262, Calif. App., 2nd Dist., Div. 2, 2018 Cal. App. Unpub. LEXIS 7459).

  • November 9, 2018

    Reinsurer Seeks Dismissal Of Breach Of Contract Case Based On Lack Of Contract

    MONTGOMERY, Ala. — In a breach of contract and bad faith case based on the denial of disability benefits, a reinsurer argues to an Alabama federal court in its Nov. 6 reply brief in further support of a motion to dismiss that no contract existed between it and an insured (Horace R. Theriot Jr. v. The Northwestern Mutual Life Insurance Co., et al., No. 18-688, M.D. Ala.).

  • November 8, 2018

    Trial Court Had Jurisdiction To Decide Bad Faith Claims, Appellant Argues

    KANSAS CITY, Mo. — A Missouri trial court erred in ruling that it lacked jurisdiction over a plaintiff’s insurance bad faith claims against an insurer upon remand from the state’s supreme court because the high court’s mandate, which was entered by the trial court, “was a partial summary judgment which did not put an end to the litigation” against the insurer, the plaintiff argues in an Oct. 9 appellant brief filed in the Missouri Court of Appeals (Franklin D. Allen v. Atain Specialty Insurance Co., No. WD81677, Mo. App.).

  • November 7, 2018

    Termination Of Disability Benefits Did Not Amount To Bad Faith, Judge Says

    WILLIAMSPORT, Pa. — A Pennsylvania federal judge on Nov. 2 granted a motion for summary judgment filed by the insurers in a disability dispute after determining that the claimant failed to prove that the termination of his benefits was unreasonable and made in bad faith (Dr. Robert Brugler v. Unum Group, et al., No. 15-1031, M.D. Pa., 2018 U.S. Dist. LEXIS 187836).

  • November 6, 2018

    Insured: Coverage Denial Under Condo Exclusion Was Done In Bad Faith

    HAMMOND, Ind. — An insured alleges in a Nov. 5 complaint filed in an Indiana federal court that an insurer breached its contract and acted in bad faith when denying coverage based upon a condominium exclusion for cracking damage caused by the insured’s work (Gary Material Supply LLC v. Western World Insurance Group, No. 18-00421, N.D. Ind.).