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Mealey's Insurance Bad Faith

  • November 16, 2018

    Breach Of Contract, Bad Faith Claims Fail; No Duty Owed To Third Party

    TACOMA, Wash. — A third party injured in a slip-and-fall accident in a grocery store cannot assert claims for breach of contract, bad faith and negligent claims against the store’s claims administrator because the claims administrator owed no duty to the third party under Washington law, a Washington federal judge said Nov. 14 (Victoria J. Pruett v. Safeway Inc., et al., No. 17-5399, W.D. Wash., 2018 U.S. Dist. LEXIS 194197).

  • November 15, 2018

    Insured Cannot Pursue Extracontractual Claims Against Insurer, Judge Says

    SEATTLE — An insured cannot pursue any extracontractual claims, including a bad faith claim,  against an auto insurer for its refusal to submit the insured’s underinsured motorist claim to arbitration, a Washington federal judge said Nov. 14 in partially granting the insurer’s motion for summary judgment (Candice Mills v. Unitrin Auto & Home Insurance Co., No. 18-831, W.D. Wash., 2018 U.S. Dist. LEXIS 194263).

  • November 13, 2018

    Delay In Settling Collapse Claim Was Unreasonable, Vexatious, Panel Says

    ELGIN, Ill. — A trial court did not err in finding that an insurer’s delay in settling a claim following the collapse of an insured building was unreasonable and vexatious because the insurer failed to offer a written explanation for the denial of certain costs, failed to complete the property investigation and failed to complete a determination of liability, the Second District Illinois Appellate Court said Nov. 8 (Charter Properties Inc. v. Rockford Mutual Insurance Co., No. 2-17-0637, Ill. App., 2nd Dist., 2018 Ill. App. LEXIS 829).

  • November 12, 2018

    On Remand, Texas Court Again Rules In Insurer’s Favor In Storm Damage Dispute

    FORT WORTH, Texas — After the Texas Supreme Court remanded an appellate court’s ruling in favor of a homeowners insurer in a coverage dispute over storm damage, an appellate panel on Nov. 8 concluded that no evidence exists that the insureds’ property damage was caused by or solely attributable to a covered peril (Richard Seim, et al. v. Allstate Texas Lloyds, et al., No. 02-16-00050, Texas App., 2nd Dist., 2018 Tex. App. LEXIS 9190).

  • November 12, 2018

    Judge Declines To Bifurcate Claims In Bad Faith Dispute

    DENVER — Bifurcation of proceedings in an insurance breach of contract and bad faith lawsuit is not necessary because it will not “be more convenient and would [not] preserve the resources” of a federal district court in Colorado and the parties involved, a federal judge in Colorado ruled Oct. 26 in denying the motion (Pinon Sun Condominium Association Inc. v. Atain Specialty Insurance Co., et al., No. 17-1595, D. Colo., 2018 U.S. Dist. LEXIS 183941).

  • November 12, 2018

    Claims Dismissed Against Insurer Over Denied Coverage For Basement Wall Cracking

    BRIDGEPORT, Conn. — A Connecticut federal judge on Nov. 9 dismissed insureds’ claims for breach of contract and violation of the Connecticut Unfair Trade Practices Act (CUTPA) against an insurer regarding the denial of coverage for cracking caused by allegedly defective concrete in the insureds’ basement walls (Robert John Houlihan, et al. v. Safeco Insurance Company of America, et al., No. 18-184, D. Conn., 2018 U.S. Dist. LEXIS 192032).

  • November 12, 2018

    Trial Court Properly Found Insurer Did Not Breach Contract In Denying Auto Claim

    LOS ANGELES — A trial court properly granted an auto insurer’s motion for summary judgment in a suit alleging that the insurer breached its contract and acted in bad faith because there is no triable issue of fact that the damage to the insured’s vehicle was caused by wear and tear, an excluded cause of loss under the policy, the Second District California Court of Appeal said Oct. 30 (Edik Ghadimian v. Geico Casualty Co., No. B281262, Calif. App., 2nd Dist., Div. 2, 2018 Cal. App. Unpub. LEXIS 7459).

  • November 9, 2018

    Reinsurer Seeks Dismissal Of Breach Of Contract Case Based On Lack Of Contract

    MONTGOMERY, Ala. — In a breach of contract and bad faith case based on the denial of disability benefits, a reinsurer argues to an Alabama federal court in its Nov. 6 reply brief in further support of a motion to dismiss that no contract existed between it and an insured (Horace R. Theriot Jr. v. The Northwestern Mutual Life Insurance Co., et al., No. 18-688, M.D. Ala.).

  • November 8, 2018

    Trial Court Had Jurisdiction To Decide Bad Faith Claims, Appellant Argues

    KANSAS CITY, Mo. — A Missouri trial court erred in ruling that it lacked jurisdiction over a plaintiff’s insurance bad faith claims against an insurer upon remand from the state’s supreme court because the high court’s mandate, which was entered by the trial court, “was a partial summary judgment which did not put an end to the litigation” against the insurer, the plaintiff argues in an Oct. 9 appellant brief filed in the Missouri Court of Appeals (Franklin D. Allen v. Atain Specialty Insurance Co., No. WD81677, Mo. App.).

  • November 7, 2018

    Termination Of Disability Benefits Did Not Amount To Bad Faith, Judge Says

    WILLIAMSPORT, Pa. — A Pennsylvania federal judge on Nov. 2 granted a motion for summary judgment filed by the insurers in a disability dispute after determining that the claimant failed to prove that the termination of his benefits was unreasonable and made in bad faith (Dr. Robert Brugler v. Unum Group, et al., No. 15-1031, M.D. Pa., 2018 U.S. Dist. LEXIS 187836).

  • November 6, 2018

    Insured: Coverage Denial Under Condo Exclusion Was Done In Bad Faith

    HAMMOND, Ind. — An insured alleges in a Nov. 5 complaint filed in an Indiana federal court that an insurer breached its contract and acted in bad faith when denying coverage based upon a condominium exclusion for cracking damage caused by the insured’s work (Gary Material Supply LLC v. Western World Insurance Group, No. 18-00421, N.D. Ind.).

  • November 6, 2018

    Texas High Court Declines Review Of Insurance Bad Faith Ruling

    AUSTIN, Texas — The Texas Supreme Court on Nov. 2 declined review of a state appellate panel’s ruling that a trial court did not err in granting an insurer’s motion for summary judgment on a claim for bad faith under the Texas Insurance Code and the Texas Deceptive Trade Practices Act (DTPA) because the claim was time-barred under the two-year statute of limitations (Alberta Jackson v. Gainsco Inc., et al., No. 17-0138, Texas Sup.).

  • November 5, 2018

    Issue Of Fact Exists As To Whether Disability Insurer’s Determination Was Reasonable

    PHOENIX — A disability claimant’s bad faith claim and request for punitive damages can proceed because the claimant presented an issue of fact as to whether the insurer’s termination of disability benefits was reasonable, an Arizona federal judge said Nov. 1 in denying the insurer’s motion for summary judgement (Kelly Ann Tyler v. United States Life Insurance Co., et al., No. 16-939, D. Ariz., 2018 U.S. Dist. LEXIS 187001).

  • November 2, 2018

    Hurricane Harvey Insurance Bad Faith Suit Remanded To Texas State Court

    HOUSTON — An insurance company’s claim adjuster was not improperly joined in an insurance breach of contract and bad faith lawsuit in an effort to defeat federal jurisdiction, a federal judge in Texas ruled Oct. 30 in denying a partial motion to dismiss and remanding the action to state court (Joan Elaine Murray v. Allstate Vehicle and Property Insurance Co., et al., No. 18-3411, S.D. Texas, 2018 U.S. Dist. LEXIS 186462).

  • October 31, 2018

    South Carolina Appeals Panel Reverses Ruling On Insured’s Bad Faith Claim

    COLUMBIA, S.C. — A trial court erred in granting an insured’s motion for summary judgment on a bad faith claim because the facts do not show that the insurer unreasonably breached the contract of insurance when it denied coverage for an underlying personal injury claim filed against the insured, the South Carolina Court of Appeals said Oct. 31 (Three Blind Mice LLC, d/b/a The Blind Horse Saloon v. Colony Insurance Co., No. 2018-UP-402, S.C. App., 2018 S.C. App. Unpub. LEXIS 399).

  • October 30, 2018

    Insured’s Bad Faith Suit Cannot Proceed, Panel Determines

    LOS ANGELES — The Second District California Court of Appeal on Oct. 26 affirmed a trial court’s demurrer to an insured’s bad faith suit after determining that the finality of judgments doctrine precludes the insured from challenging the insurer’s behavior before and during an arbitration proceeding because the arbitration award was a final judgment (Haik Kivorkian v. Star Insurance Co., No. B272162, Calif. App., 2nd Dist., Div. 3, 2018 Cal. App. Unpub. LEXIS 7300).

  • October 26, 2018

    Loss Of Use Of Property Constitutes Property Damage, Panel Says In Reversal

    RIVERSIDE, Calif. — A California appeals panel on Oct. 25 found that a property owner’s loss of the ability to use a property as a nightclub following a fatal shooting constituted property damage under a security guard service provider’s insurance policy, reversing a lower court’s ruling that there is no coverage under the policy (Thee Sombrero, Inc. v. Scottsdale Insurance Company, No. E067505, Calif. App., 4th Dist., Div. 2, 2018 Cal. App. LEXIS 966).

  • October 26, 2018

    New York Majority: Fact Question Exists As To Whether Insurers Acted In Bad Faith

    ALBANY, N.Y. — A majority of a New York appeals court on Oct. 25 held that there is a question of fact regarding whether a doctor’s primary and excess insurers acted in bad faith in failing to settle an underlying medical malpractice lawsuit, reversing and remanding a lower court’s ruling in favor of the insurers and reinstating the bad faith claim against them (Healthcare Professionals Insurance Company v. Michael A. Parentis et al., No. n/a, N.Y. Sup., App. Div., 2018 N.Y. App. Div. LEXIS 7187).

  • October 25, 2018

    Bad Faith Claims Cannot Survive; Federal Judge Grants Motion To Dismiss

    LAS VEGAS — A Nevada federal judge on Oct. 24 dismissed an insured’s bad faith claims after determining that the insured failed to provide any facts in support of the allegations that the auto insurer acted in bad faith by offering to settle her underinsured motorist claim for benefits for less than the full policy limit (Yvette Rodriguez v. Geico Casualty Co., No. 18-1070, D. Nev., 2018 U.S. Dist. LEXIS 182228).

  • October 25, 2018

    Judge Orders Production Of Insurer’s Reinsurance In Defects Coverage Case

    CHARLESTON, S.C. — A South Carolina federal judge on Oct. 24 declined to stay a coverage dispute over a defectively constructed project for an in camera review and instead ordered an insurer to produce documents pertaining to reinsurance and reserves (ContraVest Inc., et al. v. Mt. Hawley Insurance Co., No. 15-00304, D. S.C., 2018 U.S. Dist. LEXIS 182196).