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Mealey's Insurance Bad Faith

  • August 6, 2018

    High Court Review Of Bad Faith Ruling Needed Under Erie Doctrine, Insured Says

    WASHINGTON, D.C. — U.S. Supreme Court review of an 11th Circuit U.S. Court of Appeals ruling in an insurance bad faith lawsuit is necessary because the appellate panel’s ruling does not follow the precedent set by the Supreme Court’s ruling in Erie Railroad Co. v. Tompkins, an insured argues in a July 20 petition for writ of certiorari (David Duncan v. GEICO General Insurance Co., No. 18-108, U.S. Sup.).

  • August 3, 2018

    Insurance Bad Faith, Breach Of Contract Claims Found To Be Unripe

    DENVER — A federal judge in Colorado on July 31 ruled that claimants’ third-party claim for bad faith against a trucking company’s insurer are unripe and are, therefore, not fit for review until an underlying state court action has been adjudicated because the claimants’ “injury cannot be known and their bad faith failure to settle claim, in turn, cannot accrue until the [insurer’s] appeal in the Underlying Action ‘either establishes [the excess] exposure or dissolves any liability’” (Timothy Kuzava v. United Fire & Casualty Co., No. 17-02673, D. Colo., 2018 U.S. Dist. LEXIS 127871).

  • August 1, 2018

    No Coverage Owed For Deteriorating Foundation Walls, Federal Judge Says

    NEW HAVEN, Conn. — No coverage is owed to insureds seeking coverage for damages to their home’s foundation walls caused by a chemical reaction in the concrete used in the foundation because the insureds failed to prove that a collapse of the foundation will occur in the foreseeable future, a Connecticut federal judge said July 31 (Christopher D. Lester, et al. v. Liberty Mutual Fire Insurance Co., No. 16-909, D. Conn., 2018 U.S. Dist. LEXIS 127711).

  • July 31, 2018

    Amount In Controversy Met, Judge Says, Noting Treble Damages Could Be Awarded

    SEATTLE — A Washington federal judge on July 26 denied an insured’s motion to remand an auto benefits coverage suit after determining that the amount in controversy has been met because the insured has requested treble damages as a result of the insurer’s alleged bad faith conduct in handling her claim (Anna Wilson v. GEICO Indemnity Co., No. 18-226, W.D. Wash., 2018 U.S. Dist. LEXIS 125426).

  • July 30, 2018

    Intellectual Property Exclusion Bars Coverage For All Claims, 9th Circuit Affirms

    PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on July 26 affirmed a lower federal court’s finding that a commercial general liability insurer has no duty to defend its insured against an underlying trademark and trade dress infringement lawsuit because the insurance policy's intellectual property exclusion bars coverage for all claims (Secard Pools Inc, et al. v. Kinsale Insurance Company, No. 17-55534, 9th Cir., 2018 U.S. App. LEXIS 20839).

  • July 30, 2018

    Insured’s Water Damage Suit Remanded To New York State Court

    ROCHESTER, N.Y. — A New York federal judge on July 27 granted an insured’s motion to remand a breach of contract and bad faith suit arising out of the insured’s claim for water damages after determining that the entity that removed the suit lacked standing to do so because the entity is not a named defendant (William P. Polito v. The Hanover Insurance Group Inc. d/b/a The Hanover Group, No. 18-6332, W.D. N.Y., 2018 U.S. Dist. LEXIS 126030).

  • July 26, 2018

    Breach Of Contract, Bad Faith Claims Not Preempted By Motor Vehicle Law

    PHILADELPHIA — A Pennsylvania federal judge on July 25 denied an auto insurer’s motion to dismiss breach of contract, bad faith and unfair trade practices claims after determining that the claims are not preempted by Pennsylvania’s motor vehicle law (Elizabeth Shea v. USAA Casualty Insurance Co., No. 17-4455, E.D. Pa., 2018 U.S. Dist. LEXIS 124750).

  • July 25, 2018

    Insurer’s Termination Of Disability Benefits Was Reasonable Based On Evidence

    SACRAMENTO, Calif. — A disability insurer did not act in bad faith in terminating an insured’s benefits, a federal judge in California said July 23 after determining that based on the insured’s misrepresentations about her ability to work, the insurer had a reasonable basis to terminate the benefits (Devra Bommarito v. The Northwestern Mutual Life Insurance Co., et al., No. 15-1187, E.D. Calif., 2018 U.S. Dist. LEXIS 122853).

  • July 23, 2018

    Breach Of Contract, Bad Faith Claims In Water Damage Coverage Dispute Fail

    MIAMI — An insured failed to provide any specifics about a water damage claim or which provisions of an insurance policy the insurer allegedly breached, a Florida federal judge said July 16 in granting the insurer’s motion to dismiss the insured’s claims for breach of contract and bad faith (Ricardo Garcia v. Scottsdale Insurance Co., No. 18-20509, S.D. Fla., 2018 U.S. Dist. LEXIS 117568).

  • July 23, 2018

    Trial Court Erred In Sanctioning Insurer; No Proof Of Bad Faith, Panel Says

    LAKELAND, Fla. — A trial court erred in sanctioning an insurer for allegedly orchestrating the misconduct of its insureds’ attorney because the evidence did not show that the insurer engaged in any bad faith conduct, the Second District Florida Court of Appeal said July 13 (FCCI Commercial Insurance Co. v. Empire Indemnity Insurance Co., et al., No. 2D17-1749, Fla. App., 2nd Dist., 2018 Fla. App. LEXIS 9864).

  • July 23, 2018

    Federal Magistrate Judge Recommends Dismissing Bad Faith Claim Against Insurer

    PITTSBURGH — A Pennsylvania federal magistrate judge on July 12 recommended dismissing an insured’s bad faith claim without prejudice to file an amended complaint against a homeowners insurer because the insured failed to sufficiently allege facts to support the claim (Cecelia Rosenberg v. Amica Mutual Insurance Co., No. 18-406, W.D. Pa., 2018 U.S. Dist. LEXIS 117116).

  • July 20, 2018

    Insurer Failed To Prove Denial Was Justified Based On Insured’s Late Notice

    PITTSBURGH — An insured sufficiently alleged facts in support of a bad faith claim against an insurer for failure to investigate a property damage claim caused by a burst water pipe, a Pennsylvania federal judge said July 17, noting that the insurer failed to prove that it was prejudiced by the insured’s late notice of the coverage claim (FAPD LLC v. Auto-Owners Insurance Co., No. 18-0428, W.D. Pa., 2018 U.S. Dist. LEXIS 118776).

  • July 19, 2018

    Bad Faith Claim Against Auto Insurer Cannot Stand, Federal Magistrate Judge Says

    HAMMOND, Ind. — An Indiana federal judge on July 12 granted judgment in favor of an auto insurer on a bad faith claim brought by three plaintiffs after determining that one of the plaintiffs does not have standing as a third-party beneficiary to bring the claim and the other two plaintiffs waived their right to assert the claim (Alfredo Prieto, et al. v. State Farm Insurance Co., No. 15-452, N.D. Ind., 2018 U.S. Dist. LEXIS 116070).

  • July 19, 2018

    Primary Insurer Acted In Bad Faith, Must Pay Excess Insurer For Settlement

    LAS VEGAS — A primary auto insurer must reimburse an excess insurer for the settlement of an auto liability claim that exceeded the primary policy’s coverage limit because the primary insurer acted in bad faith in failing to settle the claim within the policy limits when it had the opportunity to do so, a Nevada federal judge said July 5 (Colony Insurance Co. v. Colorado Casualty Insurance  Co., et. al., No. 12-1727, D. Nev., 2018 U.S. Dist. LEXIS 111818).

  • July 19, 2018

    Insured Entitled To Discovery Pertaining To Insurer’s Claims-Handling Practices

    SALT LAKE CITY — A Utah federal magistrate judge on July 5 granted an insured’s motion to compel the discovery of information from an auto insurer after determining that the information regarding the insurer’s claims-handling practices following the filing of the complaint is relevant to the insured’s bad faith claim (Aubreanna Hoopes v. Owners Insurance Co., No. 15-734, D. Utah, 2018 U.S. Dist. LEXIS 112722).

  • July 18, 2018

    Insureds’ Bad Faith Claim In Water Damage Suit Is Sufficiently Supported

    PHILADELPHIA — A Pennsylvania federal judge on July 17 denied an insurer’s motion to dismiss a bad faith claim in a water damage coverage dispute after determining that the insurer failed to offer sufficient evidence in support of its argument that its coverage denial was reasonable (Overbrook Properties LLC, et al. v. Allstate Indemnity Co., No. 18-630, E.D. Pa., 2018 U.S. Dist. LEXIS 119389).

  • July 17, 2018

    Judge: Insurance Bad Faith Suit Barred By Doctrine Of Laches

    LAS VEGAS — Summary judgment in an insurance bad faith lawsuit is appropriate because an insurer has shown that a plaintiff engaged in an unreasonable delay in bringing his lawsuit against the insurer for failure to pay death insurance benefits and are, thus, barred by laches, a federal judge in Nevada ruled July 12 in granting the insurer’s motion for summary judgment (Richard Lucas-MacGibbon v. USAA Life Insurance Co., No. 17-1348, D. Nev., 2018 U.S. Dist. LEXIS 115914).

  • July 17, 2018

    Federal Judge Rules On Motions In Limine In Coverage Suit Over Tornado Damage

    OKLAHOMA CITY — An Oklahoma federal judge on July 13 granted in part and denied in part an insurer’s motion in limine and denied the insured’s motion in limine in its entirety in a coverage dispute over property damage caused by a tornado (Charles A. Shadid LLC v. Aspen Specialty Insurance Co., No. 15-595, W.D. Okla., 2018 U.S. Dist. LEXIS 117188).

  • July 16, 2018

    Federal Judge Says Claim Against Auto Insurer For Excess Damages Fails

    BATON ROUGE, La. — A Louisiana federal judge on July 12 granted summary judgment in favor of an auto insurer after determining that a third-party claimant who obtained an assignment of rights from an insured is not entitled to recover damages in excess of the policy limits because the issue of damages was already adjudicated in an underlying state court suit filed by the third-party claimant (Bradley Smith v. Shelter Mutual Insurance Co., No. 15-357, M.D. La., 2018 U.S. Dist. LEXIS 115873).

  • July 13, 2018

    Breach Of Contract, Bad Faith Claims Against Life Insurer Survive Dismissal

    CEDAR RAPIDS, Iowa — A life insurer’s motion to dismiss claims for breach of contract, bad faith and declaratory judgment was denied by an Iowa federal judge on July 11 in a purported class action accusing the insurer of improperly transferring reserve funds through reinsurance transactions (Karen McMahon, et al. v. Transamerica Life Insurance Co., No. 17-149, N.D. Iowa, 2018 U.S. Dist. LEXIS 115260).