NASHVILLE, Tenn. — A Tennessee federal judge on June 9 refused to remand a contractor and its president’s breach of contract and bad faith suit against an insurer over coverage for a residential construction defects case (Cornerstone Construction Company of Tennessee, LLC, et al. v. Builders Mutual Insurance Co., No. 19-01056, M.D. Tenn., 2020 U.S. Dist. LEXIS 100336).
DENVER — Following the answer to two certified questions by the Oklahoma Supreme Court, the 10th Circuit U.S. Court of Appeals on June 8 held that an insured is the “prevailing party” and is entitled to reasonable attorney fees and statutory interest in a coverage dispute arising from the insured’s roof and interior damage following a wind storm (Billy Hamilton v. Northfield Insurance Co., Nos. 17-7049, 10th Cir.).
TULSA, Okla. — An Oklahoma federal judge on June 5 granted a disability insurer’s motion for summary judgment on a breach of contract claim but denied the insurer’s motion for summary judgment on a bad faith claim after determining that a question of fact exists as to whether the disability insurer investigated the claimant’s injury (Jody Fees v. American Family Life Insurance Company of Columbus [Aflac], No. 19-476, N.D. Okla., 2020 U.S. Dist. LEXIS 99107).
SIOUX FALLS, S.D. — A federal judge in South Dakota on May 27 ruled that an insurer is not entitled to summary judgment on its insured’s claim for insurance bad faith in a dispute over the insurer’s handling of a farm insurance claim because genuine issues of material fact exist as to whether the insurer’s investigation and denial of the insured’s claim were reasonable (Patricia Gregerson v. Farm Bureau Property and Casualty Insurance Co., No. 18-5044, D. S.D., 2020 U.S. Dist. LEXIS 92341).
DALLAS — A Texas trial court erred in denying an insurer’s request to quash its insured’s request to compel discovery regarding his uninsured/underinsured motorist (UM/UIM) coverage in a breach of contract and bad faith lawsuit because such a request is not relevant to the claims to be decided in the action, a Texas appellate panel ruled May 19 (In re GEICO County Mutual Insurance Co., No. 05-20-00259-CV, Texas App., 5th Dist., 2020 Tex. App. LEXIS 3991).
OLYMPIA, Wash. — An insurer failed to sufficiently show that Washington’s rules of professional conduct bar a law firm that previously represented the insurer in bad faith lawsuits from representing insureds in a similar action against the insurer because such representation would cause the insurer a “substantial risk,” the Washington Supreme Court ruled in a May 21 en banc opinion (Richard Plein, et al. v. USAA Casualty Insurance Co., et al., No. 97563-9, Wash. Sup., 2020 Wash. LEXIS 292).
HOUSTON — A Texas federal magistrate judge on May 8 recommended that a motion to remand filed by insureds alleging that a homeowners insurer acted in bad faith in handling a claim for wind and hail damage be denied because the insurer met its burden of proving that the federal jurisdictional minimum amount in controversy has been met (Raul Bustos, et al. v. State Farm Lloyds, No. 19-4812, S.D. Texas, 2020 U.S. Dist. LEXIS 93807).
SAN FRANCISCO — An insured’s assignee lacks standing to seek consequential damages after obtaining a $3.5 million default judgment against the insurer in a breach of contract and bad faith lawsuit because the assignee’s default judgment against the insured expired and was thus, unenforceable, a Ninth Circuit U.S. Court of Appeals panel ruled June 4 (James Nalder, et al. v. United Automobile Insurance Co., No. 13-17441, 9th Cir.).
MONTGOMERY, Ala. — A reinsurer on June 3 asked an Alabama federal court to dismiss claims for bad faith refusal to pay filed by an insurer for most of the municipalities in Alabama because Alabama does not recognize a tort for bad faith refusal to pay reinsurance claims (Alabama Municipal Insurance Corporation v. Munich Reinsurance America, Inc., No. 20-300, M.D. Ala.).
TUCSON, Ariz. — An Arizona federal judge on May 19 denied a disability claimant’s motion in limine seeking to preclude a disability insurer from entering evidence to justify its alleged bad faith conduct in handling a claim for disability income benefits because the claimant failed to specify what evidence the insurer might introduce at trial (Herbert Jalowsky M.D. v. Provident Life and Accident Insurance Co., et al., No. 18-279, D. Ariz., 2020 U.S. Dist. LEXIS 87724).
PHOENIX — The Division 1 Arizona Court of Appeals on June 2 determined that a trial court properly found that a homeowners insurer did not breach its contract or act in bad faith in handling a claim for water and mold damages because there is no evidence that the insurer breached any portion of the insurance contract or acted unreasonably in handling the claim (Athena Finney Lane Jacobson v. Mercury Casualty Co., No. 1 CA-CV 19-0246, Ariz. App., Div. 1, 2020 Ariz. App. Unpub. LEXIS 593).
CHARLESTON, S.C. — A federal judge in South Carolina on May 29 denied without prejudice an insured’s motion to compel a professional liability insurer to produce its communications with outside counsel, rejecting the insured’s argument that the insurer waived its attorney-client privilege over the communications (Susan Harriman v. Associated Industries Insurance Company, Inc., No. 18-02750, D. S.C., 2020 U.S. Dist. LEXIS 93649).
CHICAGO — An Illinois appeals panel on May 28 affirmed a lower court’s finding that a directors and officers liability insurer did not act vexatiously or unreasonably when it denied coverage for an underlying lawsuit alleging breach of fiduciary duty, minority member oppression, breach of the covenant of good faith and fair dealing and civil conspiracy, finding that the existence of a bona fide dispute precludes recovery for bad faith (Nine Group II, LLC, et al. v. Liberty International Underwriters, Inc., No. 19-0320, Ill. App., 1st Dist., 4th Div., 2020 Ill. App. Unpub. LEXIS 927).
AUSTIN, Texas —The Texas Supreme Court in its May 29 orders denied an insured’s motion for rehearing challenging its refusal to review an appeals court’s reversal of a ruling in favor of the insured in a homeowners insurance coverage dispute over Hurricane Ike damage (Ozier Hurst v. National Security Fire & Casualty Co., et al., No. 17-0719, Texas Sup.).
PHILADELPHIA — The Third Circuit U.S. Court of Appeals on May 29 affirmed a district court’s ruling that an insurer did not act in bad faith in terminating a life insurance policy because the owner of the policy failed to update the payer address on the policy after being instructed to do so by the former payer (Stacy Power et al., v. Erie Family Life Insurance Co., No. 19-2994, 3rd Cir., 2020 U.S. App. LEXIS 17083).
LOS ANGELES — A California federal judge on May 18 granted a life insurance policy beneficiary’s motion for summary judgment on a breach of contract claim after determining that the beneficiary met her burden of proving that the insured’s death was accidental; however, the judge denied the beneficiary’s motion on the claims for bad faith and financial elder abuse after determining that the life insurer’s coverage denial was not unreasonable (Gladys Interiano v. Colonial Life and Accident Insurance Co., No. 19-1834, C.D. Calif., 2020 U.S. Dist. LEXIS 87981).
PHILADELPHIA — A Pennsylvania federal judge on May 28 denied a homeowners insurer’s motion to dismiss a bad faith claim in a dispute over coverage for fire damages because the insured sufficiently alleged facts in support of the bad faith claim (Sheila Scott, et al. v. State Farm Fire and Casualty Co., No. 19-5559, E.D. Pa., 2020 U.S. Dist. LEXIS 92960).
SANTA ANA, Calif. — Allegations of an insurer’s mishandling of the bad faith claims process with regard to 33 different construction defect lawsuits involving a plumbing contractor do not constitute protected activity under California’s anti-strategic lawsuit against public participation (SLAPP) statute, a California appellate court ruled May 27 (Trilogy Plumbing, Inc. v. Navigators Specialty Insurance Company, No. G057796, Calif. App., 4th Dist., Div. 3, 2020 Cal. App. Unpub. LEXIS 3298).
RIVERSIDE, Calif. — A trial court did not err in granting a homeowners insurer’s motion for summary judgment on a bad faith claim but did err in granting the insurer’s motion for summary judgment on a breach of contract claim because there is no evidence regarding what, if anything, the homeowners could have done to discover or stop their tenant’s marijuana-growing operation, a Fourth District California Court of Appeal majority said May 26 (James Mosley v. Pacific Specialty Insurance Co., No. E071287, Calif. App., 4th Dist., Div. 2, 2020 Cal. App. LEXIS 451).
SAN FRANCISCO — A California appeals panel on May 22 reversed a lower court’s grant of summary judgment in favor of a homeowners insurer on its insureds’ bad faith and punitive damages claims, finding that it cannot determine that it is undisputed that the insurer’s basis for denying the insureds’ supplemental wildfire damage claims was reasonable (Leonard Fadeeff, et al. v. State Farm General Insurance Co., No. A155691, Calif. App., 1st Dist., Div. 2, 2020 Cal. App. Unpub. LEXIS 3192).