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).
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).
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).
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).
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).
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).
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).
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).
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.).
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).
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).
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).
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).
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).
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).
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).
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).
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).
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).
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).