Mealey's Insurance Bad Faith

  • June 10, 2020

    Judge Denies Remand Of Insureds’ Bad Faith, Breach Of Contract Suit

    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).

  • June 09, 2020

    Insured Is ‘Prevailing Party,’ Entitled To Attorney Fees, 10th Circuit Says

    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.).

  • June 08, 2020

    Federal Judge Says Bad Faith Claim In Disability Suit Will Proceed

    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).

  • June 08, 2020

    Claims In Cattle Rancher’s Insurance Bad Faith Suit Survive Summary Judgment

    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).

  • June 08, 2020

    Insurer’s Mandamus Petition Conditionally Granted In Part In Bad Faith Suit

    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).

  • June 08, 2020

    Attorneys May Represent Insureds In Bad Faith Suit Over Fire Damage Coverage

    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).

  • June 08, 2020

    Texas Federal Magistrate Recommends Remand Be Denied In Hail Damage, Bad Faith Suit

    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).

  • June 05, 2020

    Panel:  Insured’s Assignee Lacks Standing To Seek Damages In Bad Faith Suit

    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.).

  • June 05, 2020

    Reinsurer Seeks To Dismiss Bad Faith Claims In Insurer’s $1.9M Suit

    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.).

  • June 04, 2020

    Arizona Federal Judge Denies Disability Claimant’s Motion In Limine

    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).

  • June 03, 2020

    Trial Court Properly Found For Homeowners Insurer In Water, Mold Damage Suit

    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). 

  • June 02, 2020

    Judge Refuses To Compel Insurer To Produce Communications With Outside Counsel

    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).

  • June 02, 2020

    Panel:  Insurer Did Not Act Vexatiously In Denying Directors, Officers Coverage

    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).

  • June 01, 2020

    Texas High Court Stands By Refusal To Review Take-Nothing Judgment In Hurricane Suit

    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.).

  • June 01, 2020

    Life Insurer Did Not Act In Bad Faith In Terminating Life Insurance Policy

    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).

  • June 01, 2020

    Policy Beneficiary Met Burden Of Proving Death Was Accidental

    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).

  • May 29, 2020

    Insured Alleged Sufficient Facts In Support Of Bad Faith Claim, Judge Says

    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).

  • May 28, 2020

    Allegations Of Insurer’s Claims Mishandling Are Not Protected Activity, Panel Says

    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).

  • May 28, 2020

    Panel Majority Reverses Ruling On Breach Of Contract Claim, Affirms On Bad Faith Claim

    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).

  • May 27, 2020

    Panel Revives Bad Faith, Punitive Damages Claims In Wildfire Coverage Suit

    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).

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