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Mealey's Insurance Bad Faith

  • March 28, 2019

    Insured’s Bad Faith Claim Survives; Judge Says Insured Presented Sufficient Evidence

    DENVER — A Colorado federal judge on March 25 denied an insurer’s motion for summary judgment on a bad faith claim alleged against a property insurer after determining that the insured presented sufficient evidence in support of its argument that the insurer acted knowingly or recklessly in disregarding the insured's claim (Hampden Auto Body Co. v. Auto-Owners Insurance Co., No. 17-1894, D. Colo., 2019 U.S. Dist. LEXIS 49287).

  • March 27, 2019

    Extracontractual Claims In Bad Faith Suit Over Property Damage Dismissed

    McALLEN, Texas — A federal judge in Texas on March 25 ruled that insureds failed to provide any evidence that their property insurance provider acted in bad faith in denying their claim for coverage for roof damage (Federico Flores Cazares, et al. v. Allstate Vehicle and Property Insurance, No. 18-136, S.D. Texas, 2019 U.S. Dist. LEXIS 48583).

  • March 27, 2019

    Insured Will Not Be Prejudiced By Workers’ Comp Insurer’s Amendments To Answer

    RAPID CITY, S.D. — A workers’ compensation insurer and its claims administrator are permitted to file affirmative defenses in response to an insured’s bad faith and misrepresentation complaint, a South Dakota federal judge said March 25 after determining that the insured will not be prejudiced by the addition of the three affirmative defenses (Annie Tovares v. Gallagher Bassett Services Inc., et al., No. 16-5051, D. S.D., 2019 U.S. Dist. LEXIS 48804).

  • March 27, 2019

    Judge: Prior Acts Exclusion Bars Coverage For Director But Not For Corporate Entity

    SALT LAKE CITY — A Utah federal judge on March 22 found that a directors and officers liability insurance policy’s prior acts exclusion does not excuse the insurer from defending its corporate entity insured against an underlying qui tam lawsuit but does apply to bar coverage for the entity’s director (Center For Excellence In Higher Education, Inc., et al. v. RSUI Indemnity Company, No. 17-1329, D. Utah, 2019 U.S. Dist. LEXIS 48413).

  • March 26, 2019

    Reconsideration Denied; Ruling In Disability Insurer’s Favor Stands

    PHOENIX — Reconsideration of a ruling that a disability insurer did not breach its contract or act in bad faith by denying a claim for benefits is not warranted, an Arizona federal judge said March 25 in rejecting the claimant’s argument that reconsideration is justified because the disability insurer did not accurately state the disability onset date (Cynthia Cheney v. United States Life Insurance Company in the City of New York, et al., No. 17-0004, D. Ariz., 2019 U.S. Dist. LEXIS 14742).

  • March 26, 2019

    Most Claims Against W.R. Grace Insurer Filed On Time, Judge Finds

    HELENA, Mont. — Most negligence, bad faith and wrongful death claims filed by 29 Montana claimants against an insurer of former Chapter 11 debtor W.R. Grace & Co. survive the insurer’s dismissal bid under the state’s statute of limitations, a federal judge in the state ruled March 22 (Billie J. Schull, et al. v. Maryland Casualty Company, No. 6:17-cv-76, D. Mont., 2019 U.S. Dist. LEXIS 48099).

  • March 25, 2019

    9th Circuit Affirms Judgment In Insurer’s Favor In Flood Coverage Dispute

    PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on March 21 affirmed a lower federal court’s judgment in favor of an insurer in an insured’s breach of contract and bad faith lawsuit seeking coverage for underlying flood damage (John R. Fuchs, et al. v. State Farm General Insurance Company, No. 17-56182, 9th Cir., 2019 U.S. App. LEXIS 8333).

  • March 25, 2019

    Third-Party Claims Administrator Did Not Unfairly Handle Nursing Home Claim

    BOSTON — A district court did not err in finding that a third-party claims administrator’s handling of a wrongful death suit against an insured nursing home did not constitute bad faith and did not violate Massachusetts’ unfair settlement practices law, the First Circuit U.S. Court of Appeals said March 18 (Garrick Calandro v. Sedgwick Claims Management Services Inc., No. 18-1637, 1st Cir., 2019 U.S. App. LEXIS 7913).

  • March 22, 2019

    Nursing Home Benefits Claim Properly Denied, 9th Circuit Affirms

    SEATTLE — The Ninth Circuit U.S. Court of Appeals on March 21 affirmed a district court’s ruling that a long-term care insurer did not breach its contract or act in bad faith when it denied a claim for nursing home benefits because the policy clearly defines the differences between coverage for nursing home benefits versus assisted living facility benefits (Mike Howisey, et al. v. Transamerica Life Insurance Co., No. 17-36045, 9th Cir., 2019 U.S. App. LEXIS 8340).

  • March 22, 2019

    Motion For Default Denied, Leave To File Answer Granted In Bad Faith Suit

    PEORIA, Ill. — A federal judge in Illinois on March 18 ruled that an insurer’s entry of appearance, requests for extensions of time to respond to a complaint and subsequent motion to transfer are sufficient to defeat the insured’s motion for an entry of default in an insurance breach of contract and bad faith lawsuit (Jehan Zeb Mir v. State Farm Mutual Automobile Insurance Co., No. 18-1315, E.D. Ill., 2019 U.S. Dist. LEXIS 43471).

  • March 21, 2019

    Surviving Spouse’s Bad Faith Claim Can Move Forward, Judge Says

    HAMMOND, Ind. — An Indiana federal judge on March 19 denied a life insurer’s motion for judgment on the pleadings after determining that a surviving spouse who is seeking benefits for her husband’s death caused by huffing vapors from compressed air duster canisters has alleged sufficient facts at this stage of the litigation to allow the bad faith claim to proceed (Jill Mims v. Minnesota Life Insurance Co., No. 18-21, N.D. Ind., 2019 U.S. Dist. LEXIS 45465).

  • March 20, 2019

    Genuine Issue Of Fact On Coverage Under Auto Policy Precludes Bad Faith Claim

    SAN FRANCISCO — A district court properly granted summary judgment in favor of an auto insurer because a genuine issue of material fact existed regarding coverage for an insured’s injuries sustained in an auto accident, the Ninth Circuit U.S. Court of Appeals said March 18 (Michael Sekera v. Allstate Insurance Co., No. 17-56587, 9th Cir., 2019 U.S. App. LEXIS 7968).

  • March 20, 2019

    Plaintiff Permitted To Amend Complaint To Add Facts In Support Of Bad Faith Claim

    LAS VEGAS — A plaintiff who is seeking underinsured motorist coverage under an auto policy is permitted to amend a complaint to add facts in support of her allegations for unfair claims practices and bad faith, a Nevada federal judge said March 19 in granting the insurer’s motion to dismiss the claims (Diana Rosas v. GEICO Casualty Co., No. 18-1200, D. Nev., 2019 U.S. Dist. LEXIS 44487).

  • March 19, 2019

    Bad Faith Suit Remanded To State Court For Lack Of Subject Matter Jurisdiction

    SAN FRANCISCO — Remand of an insurance breach of contract and bad faith lawsuit to state court is warranted because insurers have failed to sufficiently show that an insured’s disability insurance policy is governed by the Employee Retirement Income Security Act of 1974 and, thus, have failed to meet their burden of establishing federal subject matter jurisdiction, a federal judge in California ruled March 15 (Laural Jilka v. Unum Group, et al., No. 18-2952, N.D. Calif., 2019 U.S. Dist. LEXIS 42949).

  • March 19, 2019

    Professional Negligence Claim Not Timely Made And Reported, Federal Judge Rules

    KANSAS CITY, Kan. — A Kansas federal judge on March 11 found that professional negligence claim against a land surveyor insured was not made and reported before the expiration of a professional liability insurance policy’s basic extended reporting period, granting the insurer’s motion for summary judgment (Aspen Square, Inc. v. American Automobile Insurance Company, No. 18-2255, D. Kan., 2019 U.S. Dist. LEXIS 38364).

  • March 19, 2019

    Bifurcation Of Bad Faith Claim Not Warranted In Coverage Dispute

    GRAND JUNCTION, Colo. — Bifurcation of a bad faith claim in a suit seeking a declaration that coverage is owed for an accident that occurred at a motor sports festival is not warranted, a Colorado federal judge said March 16 after determining that any potential cost savings to bifurcation are outweighed by the costs of delays and unnecessary duplication (James Salls v. Secura Insurance, et al., No. 18-370, D. Colo., 2019 U.S. Dist. LEXIS 43097).

  • March 15, 2019

    Bad Faith Claim Is Duplicative Of Breach Of Contract Claim, Judge Says

    CAMDEN, N.J. — A bad faith claim alleged against an auto insurer accused of improperly adjusting the total loss value of insured vehicles cannot stand because the claim is duplicative of the insureds’ breach of contract claim against the insurer, a New Jersey federal judge said March 14 (Sherry Lewis, et al. v. Government Employees Insurance Co., No. 18-5111, D. N.J., 2019 U.S. Dist. LEXIS 41403).

  • March 14, 2019

    Appeal Of Bad Faith Ruling Dismissed For Lack Of Jurisdiction

    PHOENIX — A Ninth Circuit U.S. Court of Appeals panel on March 12 ruled that it lacks jurisdiction to hear an appeal in an insurance breach of contract and bad faith lawsuit because although a federal district court’s stipulated dismissal of the suit was with prejudice, dismissed claims could be reinstated on remand if the panel were to reverse the lower court’s ruling (Richard Kile v. USAA Casualty Insurance Co., No. 15-0380, 9th Cir., 2019 U.S. App. LEXIS 7244).

  • March 14, 2019

    Insurer Asks 8th Circuit To Affirm Decision Finding No Coverage Under Policy

    ST. LOUIS — An insurer and a third-party claims administrator on Feb. 19 responded to an appeal in the Eighth Circuit U.S. Court of Appeals filed by a woman who was denied insurance coverage for her stay at a nursing home, arguing that a district court’s decision granting their motion for summary judgment should be affirmed because the facility where she was a resident did not meet the requirements of her insurance policy (Leona Van Dusseldorp v. Continental Casualty Co., et al., No. 18-3257, 8th Cir.).

  • March 13, 2019

    Judge: Investors’ Claims Are Not Covered Under Errors, Omissions Liability Policy

    SALT LAKE CITY — A Utah federal judge on March 1 found that an errors and omissions liability insurer has no duty to defend and indemnify its insured against underlying lawsuits brought by investors alleging that they suffered losses on options trading  (Allegis Investment Services LLC, et al. v. Arthur Gallagher & Co., et al., No. 17-515, D. Utah, 2019 U.S. Dist. LEXIS 33328).

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