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Mealey's Insurance Bad Faith

  • April 15, 2019

    Insured Seeks Coverage For Claim Over Deficient Materials Used In Flood Project

    OAKLAND, Calif. — A general contractor insured on April 8 filed suit in the U.S. District Court for the Northern District of California seeking coverage for an underlying lawsuit alleging that materials used as new fill for the levees in a flood protection project were deficient (Brosamer & Wall, Inc. v. Indian Harbor Insurance Company, No. 19-872, N.D. Calif.).

  • April 15, 2019

    Retired Judge’s Opinion Testimony Excluded, May Be Prejudicial To Insurer

    DETROIT — A Michigan federal judge on April 10 granted an insurer’s motion to exclude the opinion testimony of a retired judge who presided over an underlying personal injury suit that resulted in a $22.6 million verdict against the insureds because the retired judge’s testimony could be prejudicial to the insurer, which is defending itself against a bad faith claim asserted by the insureds (Reliable Transportation Specialists Inc., et al. v. Wausau Underwriters Insurance Co., No. 15-12954, E.D. Mich., 2019 U.S. Dist. LEXIS 61537).

  • April 12, 2019

    Texas Federal Magistrate Judge Recommends Denying Remand Of Insured’s Suit

    SAN ANTONIO — An insured’s breach of contract and bad faith suit arising out of a property damage coverage dispute was properly removed to federal court by a homeowners insurer because it is clear from the insured’s complaint and presuit demand letter that the federal amount-in-controversy requirement has been met, a Texas federal magistrate judge said April 9 in recommending that the insured’s motion to remand be denied (Veronica Horton v. Allstate Vehicle and Property Insurance Co., et al., No. 19-140, W.D. Texas, 2019 U.S. Dist. LEXIS 61544).

  • April 12, 2019

    Rulings In Favor Of Auto Insurer On Breach Of Contract, Bad Faith Claims Affirmed

    SAN FRANCISCO — A district court did not err in dismissing an insured’s breach of contract claim and in granting an auto insurer’s motion for summary judgment on a bad faith claim because the insured was not owed any contractual benefits under the auto policy, the Ninth Circuit U.S. Court of Appeals said April 10 (Maria Neumayer v. Allstate Insurance Co., et al., No. 17-56469, 9th Cir., 2019 U.S. App. LEXIS 10620).

  • April 12, 2019

    Kentucky Panel Reverses $4.5M Bad Faith Verdict In Personal Injury Dispute

    FRANKFORT, Ky. — The Kentucky Court of Appeals on April 5 reversed a $4.5 million bad faith judgment entered against a commercial liability insurer because the issue of coverage was never established and the jury verdict was flagrantly against the evidence presented in the personal injury coverage suit (Cincinnati Insurance Co. v. Haley Belt, et al., No. 2017-155, Ky. App., 2019 Ky. App. Unpub. LEXIS 222).

  • April 10, 2019

    Settlement Release Bars Breach Of Contract, Bad Faith Claims Against Auto Insurer

    WHEELING, W.Va. — An insured’s claims for breach of contract and bad faith alleged against an auto insurer must be dismissed because the insured signed a settlement agreement releasing the insurer from any contractual liability, a West Virginia federal judge said April 9 in granting the insurer’s motion to dismiss (Shawn Durbin v. Nationwide Mutual Insurance Co., et al., No. 18-211, N.D. W.Va., 2019 U.S. Dist. LEXIS 60522).

  • April 10, 2019

    Auto Insurer’s Communications With Insured Are Relevant To Bad Faith Claim

    OCALA, Fla. — An auto insurer’s communications with its insured regarding a potential settlement of a suit filed against the insured following an auto accident are relevant to a bad faith claim alleged against the auto insurer by the underlying plaintiffs, a Florida federal magistrate judge said April 5 in partially granting the plaintiffs’ motion to compel (Yolanda Aldana, et al. v. Progressive American Insurance Co., No. 18-157, M.D. Fla., 2019 U.S. Dist. LEXIS 59015).

  • April 8, 2019

    Insurance Agent, Adjuster Improperly Joined In Bad Faith Suit, Judge Rules

    JACKSON, Miss. — Ruling that an insurance agent and insurance adjuster were improperly joined in an insurance breach of contract and bad faith lawsuit, a federal judge in Mississippi on March 30 denied an insured’s motion to remand, holding that complete diversity of citizenship of the remaining parties exists, providing the federal court with subject matter jurisdiction (Jennifer Luckett v. Allstate Indemnity Co., et al., No. 18-0275, S.D. Miss., 2019 U.S. Dist. LEXIS 54942).

  • April 8, 2019

    Summary Judgment Motions Denied In Bad Faith Suit Against Auto Insurer

    PHOENIX — A federal judge in Arizona on March 21 denied motions for summary judgment filed by both insureds and an insurer in a breach of contract and insurance bad faith lawsuit stemming from an automobile accident, ruling that genuine issues of material fact exist as to whether the insurer acted in bad faith in failing to properly handle the insureds’ underinsured motorist claims (Louis Wikler, et al. v. Privilege Underwriters Inc., et al., No. 17-2664, D. Ariz., 2019 U.S. Dist. LEXIS 47016).

  • April 8, 2019

    Claims Dismissed In Breach Of Contract, Bad Faith Suit Over Flood Damage

    LAS VEGAS — A federal judge in Nevada on March 20 ruled that insureds failed to sufficiently show that an insurer breached its contract with them or acted in bad faith in denying coverage under their homeowners insurance policy after their septic tank backed up and flooded their home (Manish Patel v. American National Property and Casualty Co., No. 18-0667, D. Nev., 2019 U.S. Dist. LEXIS 46721).

  • April 8, 2019

    Excess Insurer’s Settlement Negotiations Are Not Relevant To Bad Faith Dispute

    BROOKLYN, N.Y. — A New York federal judge on March 26 said a primary insurer cannot introduce evidence regarding the excess insurer’s settlement negotiations in an underlying auto coverage suit filed against an insured because the settlement negotiations are not relevant to the issue of whether the primary insurer acted in bad faith in failing to settle the underlying suit within its primary policy limits (Ohio Casualty Insurance Co. v. Twin City Fire Insurance Co., No. 14-858, E.D. N.Y., 2019 U.S. Dist. LEXIS 50504).

  • April 8, 2019

    Insurer Did Not Act In Bad Faith In Denying Claim For Insured’s Water Leak

    ALLENTOWN, Pa. — A bad faith claim alleged against a homeowners insurer cannot stand because the insured failed to provide evidence showing that the insurer refused or failed to properly evaluate and make a payment on the insured’s claim for a water leak caused by aging pipes in the insured’s home, a Pennsylvania federal judge said March 29 (Martha Mitchell v. Allstate Insurance Co. No. 17-1806, E.D. Pa., 2019 U.S. Dist. LEXIS 55613).

  • April 5, 2019

    Contractual, Tortious Bad Faith Claims Survive Dismissal Attempt

    PROVIDENCE, R.I. — A federal judge in Rhode Island on April 2 rejected an automobile insurance provider’s argument that its insured’s contractual bad faith claim should be dismissed because no such claim exists when a party has also brought a breach of contract claim, ruling that even if the insurer’s argument were true, such argument is not “a valid basis for dismissal” under state law (Jeffrey Petrarca v. Garrison Property and Casualty Insurance Co., No. 18-454, D. R.I., 2019 U.S. Dist. LEXIS 56272).

  • April 3, 2019

    Bad Faith Claim Is Not Duplicative Of Insured’s Breach Of Contract Claim

    ALBANY, N.Y. — An insured’s bad faith claim alleged against a property insurer is not duplicative of the insured’s breach of contract claim and can stand as a separate claim, a New York federal judge said March 29 in partially denying the insurer’s motion to dismiss (Phi Epsilon Building Association of Alpha Chi Ro Inc. v. RSUI Indemnity Co., No. 18-547, N.D. N.Y., 2019 U.S. Dist. LEXIS 53461).

  • April 2, 2019

    Pennsylvania High Court To Review $21M Bad Faith Award Entered By Trial Court

    HARRISBURG, Pa. — The Pennsylvania Supreme Court on March 29 granted a petition for review, agreeing to review whether an appellate court erred in vacating a state trial court’s award of more than $21 million entered in favor of the insureds and against an auto insurer in a bad faith suit (Daniel Berg v. Nationwide Mutual Insurance Co. Inc., No. 569 MAL 2018, Pa. Sup.).

  • April 1, 2019

    Insurer Did Not Act In Bad Faith When It Denied Coverage, 9th Circuit Affirms

    PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on March 29 affirmed a federal court’s ruling that a commercial general liability insurer did not act in bad faith when it denied coverage for an underlying employment practices lawsuit, finding that the insurer did not act unreasonably when it interpreted the term “intentional” in a policy exclusion to mean “voluntary” (Steven J. Berns v. Sentry Select Insurance Company, No. 17-56264, 9th Cir., 2019 U.S. App. LEXIS 9383).

  • April 1, 2019

    Breach Of Contract, Bad Faith Claims Barred By Statute Of Limitations

    OKLAHOMA CITY — An insured’s claims for breach of contract and bad faith alleged against an auto insurer are barred by Oklahoma’s applicable statute of limitations, an Oklahoma federal judge said March 28 (George Andrew Morgan v. State Farm Mutual  Automobile Insurance Co., No. 17-622, W.D. Okla., 2019 U.S. Dist. LEXIS 52853).

  • April 1, 2019

    Judge Says Insurer Owes No Defense, Indemnity For Costs As No ‘Suit’ Was Filed

    SAN DIEGO — A commercial general liability insurer has no duty to defend or indemnify insureds for costs incurred to investigate and repair alleged defects at a military training facility, a California federal judge ruled March 28, finding that no “suit” had been filed (Harper Construction Company Inc., et al. v. National Union Fire Insurance Company of Pittsburgh, PA, No. 18-00471, S.D. Calif., 2019 U.S. Dist. LEXIS 53183).

  • March 29, 2019

    Insured’s Motion For Remand Denied In Bad Faith Suit Filed Against Homeowners Insurer

    TULSA, Okla. — An insured’s breach of contract and bad faith suit arising out of a property damage coverage dispute was properly removed to Oklahoma federal court because the diversity of citizenship requirement and the amount-in-controversy requirement have been met, an Oklahoma federal judge said March 27 in denying the insured’s motion to remand (Joe Klementovicz v. State Farm Fire and Casualty Co., No.19-29, N.D. Okla., 2019 U.S. Dist. LEXIS 51650).

  • March 28, 2019

    Judge: Bad Faith Claim Cannot Be Litigated With Hurricane Irma Coverage Dispute

    FORT MYERS, Fla. — Finding that there has been no determination as to an insured’s extent of damages caused by Hurricane Irma, a Florida federal judge on March 26 dismissed without prejudice the insured’s bad faith claim against the insurer (Grey Oaks Country Club, Inc. v. Zurich American Insurance Company, No. 18-639, M.D. Fla., 2019 U.S. Dist. LEXIS 50285).