Mealey's Insurance Bad Faith

  • June 26, 2020

    JPMDL To Hear Oral Arguments In COVID-19 Business Interruptions Suits

    WASHINGTON, D.C. —The U.S. Judicial Panel on Multidistrict Litigation on June 26 issued an order indicating that it will hear oral arguments on July 30 to determine whether the U.S. District Court for the Eastern District of Pennsylvania or the Northern District of Illinois is the better forum to transfer lawsuits seeking business interruption coverage for losses arising from governmental closure orders prompted by the coronavirus pandemic (In re:  COVID-19 Business Interruption Insurance Coverage Litigation, No. 2942, JPMDL).

  • June 26, 2020

    Restaurant Seeks To Stay COVID-19 Coverage Suit Pending JPMDL Ruling

    HARRISBURG, Pa. — A self-proclaimed “mom and pop” South Carolina restaurant owner on June 25 moved a Pennsylvania federal court to stay its class action breach of contract, bad faith and unjust enrichment complaint against its all-risk commercial insurer for “swiftly” denying its claim for coverage for its closure due to the COVID-19 pandemic, arguing that the insurer will suffer no prejudice if the lawsuit is stayed pending the U.S. Judicial Panel on Multidistrict Litigation’s resolution of two motions to transfer “this and nearly 200 other related cases in 38 federal districts” “for centralized pretrial proceedings” (Richard Kahn, et al. v. Pennsylvania National Mutual Casualty Insurance Company, No. 20-00781, M.D. Pa.).

  • June 24, 2020

    No Coverage Owed For Water Damage Caused By Sump Pump Failure, Panel Says

    JERSEY CITY, N.J. — The Appellate Division of the New Jersey Superior Court on June 22 affirmed a trial court’s ruling that no coverage is owed for water damage incurred as a result of the failure of a sump pump because the policy excluded water damage caused by a sump pump failure and the insurer had no duty to inform the insured on an annual basis of the available supplemental coverage for sump pump failure (Tony Ping Yew v. FMI Insurance Co., No. A-4947-18T3, N.J. Super., App. Div., 2020 N.J. Super. Unpub. LEXIS 1200).

  • June 23, 2020

    Federal Judge Dismisses Bad Faith Claim Without Prejudice Against Auto Insurer

    PHILADELPHIA — A Pennsylvania federal judge on June 22 granted an auto insurer’s motion to dismiss an insured’s bad faith claim without prejudice after determining that the insured failed to sufficiently allege facts in support of the bad faith claim (Daniel Dietz v. Liberty Mutual Insurance Co., No. 20-1239, E.D. Pa., 2020 U.S. Dist. LEXIS 108559).

  • June 22, 2020

    New York Justice Dismisses Breach Of Contract, Bad Faith Suit Filed Against Insurer

    NEW YORK — A New York County Supreme Court justice on June 9 dismissed a homeowner’s breach of contract and bad faith suit seeking coverage for water damages after determining that the insured failed to file a sworn proof of loss within 60 days as required by the policy (Michael Stein v. National General Insurance Co., No. 651065/2020, N.Y. Sup., New York Co., 2020 N.Y. Misc. LEXIS 2662).

  • June 22, 2020

    Insurer Subject To Specific Jurisdiction In Bad Faith Suit, Federal Judge Rules

    SIOUX FALLS, S.D. — A federal judge in South Dakota on June 11 ruled that an insurer is not entitled to dismissal of claims against it in an insurance bad faith lawsuit stemming from its denial of a worker’s compensation claim because the insurer is subject to specific jurisdiction in the federal district court (Tim Rounds v. The Hartford, et al., No. 20-4010, D. S.D., 2020 U.S. Dist. LEXIS 102412).

  • June 22, 2020

    Insurer’s Delay In Providing Policy Benefits Not In Bad Faith, Panel Rules

    SAN FRANCISCO — A federal district court did not err in granting summary judgment in favor of an automobile insurer in an insurance bad faith and breach of contract lawsuit stemming from an automobile accident because it was correct in determining that no reasonable jury could find that the insurer acted in bad faith in its handling of a third party’s claim for damages, a Ninth Circuit U.S. Court of Appeals panel ruled June 15 (Antonio Pureco, et al. v. Allstate Indemnity Co., No. 19-55061, 9th Cir., 2020 U.S. App. LEXIS 18848).

  • June 22, 2020

    Claims In Business Loss Income Suit Precluded By Virus Exclusion, Insurer Says

    LOS ANGELES — Dismissal of an insured bar’s claims in an insurance breach of contract and bad faith lawsuit stemming from its insurer’s denial of its business income loss coverage claim for losses sustained when the bar was forced to cease operations as a result of the spread of the novel coronavirus is necessary because the insured’s policy explicitly excludes coverage for such losses under a virus exclusion, the insurer argues in a June 3 motion to dismiss filed in California federal court (Pez Seafood DTLA LLC v. The Travelers Indemnity Co., et al., No. 20-4699, C.D. Calif.).

  • June 19, 2020

    Bars Sue Insurer For Bad Faith Over Denial Of Business Interruption Claims

    SAN FRANCISCO — Two bars sued their insurer in California federal court on June 18, alleging that the insurer breached the terms of their insurance policies and acted in bad faith in denying their claims for business interruption coverage after they were forced to cease operations in light of San Francisco’s shelter-in-place orders issued to combat the novel coronavirus pandemic (Grubstake Holdings LLC, et al. v. First Mercury Insurance Co., No. 20-4060, N.D. Calif.).

  • June 19, 2020

    Bad Faith Claim Dismissed; Judge Says Claim Fails Under Applicable Michigan Law

    DETROIT — A Michigan federal judge on June 16 dismissed an insured’s bad faith claim against an auto insurer because Michigan law does not recognize a claim for bad faith that is based on a breach of contract (Damon P. Humphries v. Allstate Insurance Co., No. 18-11006, E.D. Mich., 2020 U.S. Dist. LEXIS 104669).

  • June 19, 2020

    Questions Of Fact Preclude Summary Judgment For Life Insurer In Bad Faith Suit

    SAN ANTONIIO — A life insurer is not entitled to summary judgment on a beneficiary’s claims for breach of contract and bad faith because the insured’s misrepresentation was not material and because questions of fact exist as to whether the life insurer knew of the insured’s condition and whether the life insurer deviated from its standard procedures in issuing the policy, a Texas federal judge said June 5 (Deborah Thomas v. Government Personnel Mutual Life Insurance Co., No. 18-1153, W.D. Texas, 2020 U.S. Dist. LEXIS 98935).

  • June 19, 2020

    Insured Failed To Offer Facts In Support Of Bad Faith Claim, Judge Says

    HARRISBURG, Pa. — A Pennsylvania federal judge on June 17 dismissed an insured’s bad faith claim after determining that the insured failed to allege any specific facts that illustrate how State Farm acted in bad faith in handling the insured’s uninsured motorist claim (Greta Miller v. State Farm Mutual Automobile Insurance Co., No. 20-367, M.D. Pa., 2020 U.S. Dist. LEXIS 105766).

  • June 19, 2020

    Texas Federal Judge Dismisses Bad Faith Suit Filed Against Auto Insurer

    McALLEN, Texas — A Texas federal judge on June 10 granted an auto insurer’s motion to dismiss a bad faith suit arising out of the insurer’s denial of an insured’s uninsured motorist (UIM) claim because the insured failed to show that the insurer engaged in extreme conduct that caused the insured to sustain an independent injury (Aaron Garza v. Allstate Fire and Casualty Insurance Co., No. 19-129, S.D. Texas, 2020 U.S. Dist. LEXIS 101689).

  • June 19, 2020

    Bad Faith Claim Alleged Against Homeowners Insurer Proceeds In Water Damage Suit

    PITTSBURGH — A Pennsylvania federal judge on June 3 denied a homeowners insurer’s motion to dismiss an insured’s bad faith claim after determining that the insured sufficiently alleged facts to support her allegation that the insurer had no reasonable basis to deny her claim for water damages (Rebecca Nelson v. State Farm Fire & Casualty Co., No. 19-1382, W.D. Pa., 2020 U.S. Dist. LEXIS 97239).

  • June 16, 2020

    Disability Insurer Met Burden Of Proving Bad Faith Suit Belongs In Federal Court

    LOS ANGELES — A California federal judge on June 15 denied a disability claimant’s motion to remand a breach of contract and bad faith suit after determining that the disability insurer met its burden of proving that the amount in controversy exceeds the federal jurisdictional minimum of $75,000 (Roger Bourban v. AXA Equitable Life Insurance Co., et al., No. 20-3376, C.D. Calif., 2020 U.S. Dist. LEXIS 103994).

  • June 15, 2020

    Federal Judge Awards Insured Additional $175K In Attorney Fees In Bad Faith Suit

    PORTLAND, Ore. — An Oregon federal judge on June 12 awarded an insured more than $175,000 in attorney fees based on the insured’s success in securing a more than $300,000 judgment against an auto insurer on the insured’s bad faith claim (Peggy Foraker v. USAA Casualty Insurance Co., No. 14-87, D. Ore., 2020 U.S. Dist. LEXIS 103250).

  • June 15, 2020

    Utah Federal Judge Remands Bad Faith Suit Filed Against Auto Insurer

    SALT LAKE CITY — A Utah federal judge on June 9 remanded an insured’s breach of contract and bad faith suit after determining that the auto insurer’s notice of removal was untimely because the suit should have been removed within 30 days of the filing of the original complaint rather than within 30 days of filing the amended complaint (Marsha Lewis v. American Family Mutual Insurance Co. S.I., No. 20-257, D. Utah, 2020 U.S. Dist. LEXIS 101751).

  • June 12, 2020

    Judge Trims Expert Testimony In Insurance Suit Over Crash Injuries

    PHOENIX — Medical experts for a woman asserting bad faith claims against her insurer over coverage for auto accident injuries cannot offer opinions made in rebuttal because of the harm it would cause the insurer, but her standard-of-care expert can testify, just not on the value of her injuries because he is not an expert in calculating medical damages, an Arizona federal judge ruled June 10 (Melinda Lou Armer v. CSAA General Insurance Company, No. 2:19-cv-04402, D. Ariz., 2020 U.S. Dist. LEXIS 101851).

  • June 11, 2020

    Pollution Exclusion Bars Coverage For Suit Arising Out Of Spraying Of Pesticides

    DENVER — The 10th Circuit U.S. Court of Appeals on June 10 affirmed a district court’s ruling that an insurer owes no coverage for the spraying of pesticides because the policy’s pollution exclusion clearly bars coverage (MJH Properties LLC v. Westchester Surplus Lines Insurance Co., No. 20-6002, 10th Cir., 2020 U.S. App. LEXIS 18209).

  • 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).

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