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Mealey's Insurance Bad Faith

  • December 10, 2018

    Contract Exclusion Bars Coverage Of Suit Over Noncompete, 8th Circuit Affirms

    ST. LOUIS — The Eighth Circuit U.S. Court of Appeals on Dec. 6 affirmed a lower federal court’s ruling in favor of an insurer in a breach of contract and bad faith lawsuit seeking coverage for an underlying lawsuit alleging violation of a noncompetition covenant (Robert Mau, et al. v. Twin City Fire Insurance Co., No. 17-3392, 8th Cir., 2018 U.S. App. LEXIS 34358).

  • December 7, 2018

    Insured’s Breach Of Contract Claim Against Disability Insurer To Proceed

    CHICAGO — An insured adequately alleged facts in support of a breach of contract claim against a disability insurer but failed to support a claim that the insurer acted vexatiously and unreasonably in refusing to renew the insured’s disability policies, an Illinois federal judge said Nov. 21 (Donald Astar v. Northwestern Mutual Life Insurance Co., No. 18-4895, N.D. Ill., 2018 U.S. Dist. LEXIS 198434).

  • December 7, 2018

    Judge Trims Claims In Bad Faith Suit Over Cancer Treatment Insurance Policy

    OKLAHOMA CITY — A federal judge in Oklahoma granted in part an insurer’s summary judgment motion in an insurance breach of contract and bad faith lawsuit on Nov. 14, ruling that although certain of an insured’s bad faith claims are time-barred or subject to a “legitimate dispute” over the scope of the insurance policy in question, genuine issues of material fact exist that prohibit summary judgment on the breach of contract claim (Rebecca L. Ake v. Central United Life Insurance Co., No. 17-937, W.D. Okla., 2018 U.S. Dist. LEXIS 194042).

  • December 7, 2018

    Panel: Insurer’s Settlement, Reimbursement By Reinsurer Did Not Breach Contract

    NEW YORK — In affirming the dismissal of breach of contract and bad faith claims, the Second Circuit U.S. Court of Appeals on Dec. 6 agreed with a lower judge that an insurer’s settlement of a flood damage claim arising out of construction work and its reimbursement under a captive reinsurance agreement did not breach its contract to insureds (Keller Foundations LLC, et al. v. Zurich American Insurance Co., No. 18-1280, 2nd Cir., 2018 U.S. App. LEXIS 34345).

  • December 6, 2018

    No Coverage Owed For Underlying Judgment Entered Against Insured, Panel Says

    LOS ANGELES — No coverage is owed for a judgment entered against an insured for breach of warranty of habitability claims alleged by the insured’s tenants because the insured failed to comply with the policy’s condition that required working smoke detectors in the insured building, the Second District California Court of Appeal said Dec. 3 in affirming the trial court’s decision to sustain the insurer’s demurrer to the tenants’ breach of contract and bad faith complaint (Debra Gray v. American Safety Indemnity Co., No. B289323, Calif. App., 2nd Dist., Div. 4, 2018 Cal. App. Unpub. LEXIS 8160).

  • December 6, 2018

    Short-Term Disability Plan Did Not Constitute Contract Between Claimant, Employer

    ST. LOUIS — A Missouri federal judge on Dec. 3 dismissed a disability claimant’s breach of contract and bad faith claims after determining that the short-term disability (STD) plan under which the claimant seeks benefits did not constitute a contract between the claimant and the employer (Anne C. Hart v. Ascension Health Alliance, No. 18-1548, E.D. Mo., 2018 U.S. Dist. LEXIS 203974).

  • December 5, 2018

    Statute Of Limitations Bars Breach Of Contract, Bad Faith Claims In Disability Suit

    SAN FRANCISCO — A disability claimant cannot maintain claims for breach of contract and bad faith based on a 2013 denial of benefits because the applicable statute of limitations for breach of contract and bad faith allegations bars the claims, a California federal judge said Dec. 4 (Theresa Hong v. AXA Equitable Life Insurance Co., No. 18-4039, N.D. Calif., 2018 U.S. Dist. LEXIS 205336).

  • December 5, 2018

    Auto Insurer Promptly Paid Insured’s Claim After Receiving All Information

    LOS ANGELES — Judgment in favor of an auto insurer on an insured’s bad faith claim was proper because the insurer promptly paid the insured’s claim after learning how much of the insured’s medical expenses would be covered by workers’ compensation insurance, the Second District California Court of Appeal said Nov. 21 (Melissa Case v. State Farm Mutual Auto Insurance Co. No. B281732, Calif. App., 2nd Dist., Div. 4, 2018 Cal. App. Unpub. LEXIS 7887).

  • December 5, 2018

    4th Circuit To Hear Update On Declaratory Relief Appeal After Top Court Ruling

    RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals is free to consider an appeal in a declaratory judgment action even while a consolidated bad faith portion of the case remains pending, the parties tell the court in supplemental briefing on the impact of recent Supreme Court precedent.  Oral arguments in the cases are scheduled for Dec. 11 (Founders Insurance Co. v. Richard Ruth’s Bar & Grill LLC, et al., George Giannaras, et al. v. Founders Insurance Co., et al., No. 17-1282(L), 17-1284, 17-1344, 17-1348, 4th Cir.).

  • December 3, 2018

    Insured’s Bad Faith Claim Fails To Allege Duty Separate From Insurance Contract

    SYRACUSE, N.Y. — An insured’s bad faith claim arising out of a coverage dispute regarding the administration of an employee retirement fund cannot stand because the insured does not allege a violation of a duty independent of the insurance contract as required under New York law, a New York federal judge said Nov. 30 (Young Men’s Christian Association of Plattsburgh v. Philadelphia Indemnity Insurance Co., No. 18-565, N.D. N.Y., 2018 U.S. Dist. LEXIS 202818).

  • November 30, 2018

    Bifurcation Of Bad Faith Claim Not Warranted, Federal Judge Determines

    PHILADELPHIA — A Pennsylvania federal judge on Nov. 28 refused to sever and stay a bad faith claim filed against an auto insurer after determining that severing the claim would not serve the interests of convenience, economy or expedition (Gilbert Goldstein, et al. v. American States Insurance Co., d/b/a Safeco Insurance Co., No. 18-3163, E.D. Pa., 2018 U.S. Dist. LEXIS 201100).

  • November 28, 2018

    Magistrate Refuses To Toss Breach Of Contract, Bad Faith Claims Against Insurer

    PITTSBURGH — A Pennsylvania federal magistrate judge on Nov. 27 denied a homeowners insurer’s motion for judgment on the pleadings in an insured’s lawsuit arising from underlying sexual abuse claims, finding that a reasonable jury could find that the insurer’s conduct constituted a bad faith breach of its contractual duties to the insured (Erica Higginbotham v. Liberty Insurance Corp., No. 18-747, W.D. Pa., 2018 U.S. Dist. LEXIS 199836).

  • 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).