Mealey's Insurance Bad Faith
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August 15, 2018
Insureds Failed To Support Claims For Unfair Practices, Texas Insurance Code Violation
McALLEN, Texas — A Texas federal judge on Aug. 13 dismissed claims alleging violations of the Texas Deceptive Trade Practices Consumer Protection Act (DTPA) and the Texas Insurance Code (TIC) after determining that the insureds failed to state facts in support of the claims, leaving the claims for breach of contract and bad faith to be decided in a hailstorm coverage dispute (Alfredo Murillo Jr., et al. v. Allstate Vehicle and Property Insurance Co., No. 18-208, S.D. Texas, 2018 U.S. Dist. LEXIS 136946).
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August 15, 2018
Insured’s Bad Faith Suit Stayed Pending Appraisal Of Hailstorm Damage Claim
SHERMAN, Texas — A Texas federal judge on Aug. 13 stayed an insured’s bad faith suit and granted an insurer’s motion to compel appraisal of the insured’s claim for hailstorm damages after determining that the insurer did not waive its right to invoke the policy’s appraisal provision (Rainey Rogers v. Nationwide General Insurance Co., No. 18-213, E.D. Texas, 2018 U.S. Dist. LEXIS 136062).
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August 14, 2018
Judge: Ongoing Operations Exclusion Bars Coverage For Insured’s Water Damage
SEATTLE — An ongoing operations exclusion precludes coverage for water damage caused by an insured, a Washington federal judge ruled Aug. 13, granting summary judgment to an insurer on breach of contract and bad faith claims (Diamond Construction LLC and Bellevue Park Homeowners Association v. Atlantic Casualty Insurance Co., No. 17-1408, W.D. Wash., 2018 U.S. Dist. LEXIS 136335).
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August 14, 2018
Federal Magistrate Judge Refuses To Strike Insured’s Bad Faith Expert Report
LAS VEGAS — A Nevada federal magistrate judge on Aug. 2 denied an insurer’s motion to strike the expert testimony submitted by an insured to refute the opinions offered by the insurer’s bad faith expert in a water damage coverage dispute, but said the insured’s expert can testify at trial only if the insurer’s expert testifies (Robert Danganan v. American Family Mutual Insurance Co., No. 17-2786, D. Nev., 2018 U.S. Dist. LEXIS 129738).
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August 13, 2018
Reinsurer Seeks Dismissal From Contract, Fraud Suit Over Disability Benefits
MONTGOMERY, Ala. — In a case over the denial of benefits under four long-term disability insurance policies, a reinsurer argues in an Aug. 1 motion that an Alabama federal court should dismiss breach of contract, bad faith and fraud claims because it is not a party to the policies (Horace R. Theriot Jr. v. The Northwestern Mutual Life Insurance Co., et al., No. 18-00688, M.D. Ala.).
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August 13, 2018
Insured’s Complaint In Bad Faith Suit Found To Be Timely, Not Prejudicial
SACRAMENTO, Calif. — A federal judge in California on Aug. 6 ruled that insureds timely filed their breach of contract and bad faith lawsuit against their insurer and that the insurer failed to show “beyond doubt” that their claims were barred by the statute of limitations (Daniel Foster, et al. v. Liberty Mutual Fire Insurance Co., No. 18-0485, E.D. Calif., 2018 U.S. Dist. LEXIS 133897).
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August 13, 2018
Federal Judge Denies Insurer’s Motion, Says Breach Of Contract Proceeds
SAN DIEGO — Claims for breach of contract and bad faith arising out of an insurer’s denial of coverage for an underlying wrongful eviction suit will proceed, a California federal judge said July 26 after determining that the insurer failed to prove that the underlying suit is excluded by any of the applicable policy exclusions (Black Mountain Center L.P., et al., v. Fidelity and Deposit Company of Maryland, No. 17-1776, S.D. Calif., 2018 U.S. Dist. LEXIS 125496
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August 13, 2018
Alleged Non-Cooperation Of Insured Cannot Be Asserted As Affirmative Defense
DENVER — An insured’s alleged non-cooperation in the adjustment of an auto claim cannot be asserted as an affirmative defense by an insurer during trial on the insured’s remaining claim for unreasonable delay or denial of benefits in violation of Colorado law, a Colorado federal judge said July 20 in entering a ruling on a number of pending pretrial issues (Wendy L. Peden v. State Farm Mutual Automobile Insurance Co., No. 14-982, D. Colo., 2018 U.S. Dist. LEXIS 121693).
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August 10, 2018
Summary Judgment Ruling On Bad Faith Counterclaim Upheld On Appeal
SEATTLE — A federal district court did not err in granting summary judgment in favor of an insurer on a third-party bad faith counterclaim because the third parties failed to show that any possible bad faith in the handling of their claim resulted in any harm, a Ninth Circuit U.S. Court of Appeals panel ruled July 31 in affirming the lower court’s opinion (State Farm Mutual Automobile Insurance Co. v. Shelbie Frounfelter, et al., No. 17-35313, 9th Cir., 2018 U.S. App. LEXIS 21204).
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August 10, 2018
Judge Administratively Closes Tornado Coverage Suit After Settlement Reached
OKLAHOMA CITY — An Oklahoma federal judge on Aug. 8 ordered a coverage dispute over property damage caused by a tornado administratively closed after the parties announced that they reached a settlement (Charles A. Shadid LLC v. Aspen Specialty Insurance Co., No. 15-595, W.D. Okla.).
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August 10, 2018
Policy’s Special Provisions Typewritten Terms Prevail To Bar Wind, Flood Coverage
BEAUFORT, S.C. — A South Carolina federal judge on Aug. 7 ruled that a commercial inland marine insurance policy should be interpreted according to its typewritten Special Provisions section, which excludes coverage for wind, hail and flood damage, granting the insurer’s motion for summary judgment in a breach of contract and bad faith suit arising from three golf courses damaged by Hurricane Matthew (Greenwood Communities and Resorts, Inc. v. Selective Insurance Company of America, No. 16-3995, D. S.C., 2018 U.S. Dist. LEXIS 132270).
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August 9, 2018
Motion In Limine To Exclude Testimony In Bad Faith Dispute Denied
DENVER — A federal magistrate judge in Colorado on Aug. 7 ruled that expert testimony in an insurance breach of contract and bad faith lawsuit will not be excluded because an insurer’s challenge as to the reliability of the expert’s opinion is overly broad and the testimony is relevant to the insurer’s defenses that its investigation of the insured’s underinsured motorist (UIM) claim that it acted reasonably in handling the claim (Christopher Meek v. Allstate Fire and Casualty Insurance Co., No. 17-0606, D. Colo., 2018 U.S. Dist. LEXIS 132154).
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August 8, 2018
Life Insurer Seeks Extension On Motion To Dismiss Schedule In Class Action
NEW YORK — A life insurer wrote to a New York federal court on Aug. 6 requesting an extension of the motion to dismiss briefing schedule in a class action alleging breach of policies by the unlawful increase of the premium costs to recoup costs associated with the acquisition (Derek Fan, et al. v. Phoenix Life Insurance Co., et al., No. 18-01288, S.D. N.Y.).
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August 7, 2018
Bad Faith, Punitive Damages Claims Survive Dismissal In Contamination Coverage Suit
FRESNO, Calif. — Claims for bad faith and punitive damages alleged against an insurer in an environmental contamination coverage suit can move forward, a California federal judge said Aug. 1 after determining that the insured has sufficiently alleged facts in support of the claims (City of Fresno v. Tokio Marine Specialty Insurance Co., No. 18-504, E.D. Calif., 2018 U.S. Dist. LEXIS 129224).
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August 6, 2018
Disputed Issue Of Fact Exists As To Whether Insured Was Agent Of Organization
DENVER — A disputed issue of material fact precludes summary judgment regarding an auto insurer’s liability to an organization for which an insured allegedly worked, a Colorado federal judge said July 23 in denying the insurer’s motion for summary judgment (Sarah Drobek v. Government Employees Insurance Co., et. al., No. 16-2512, D. Colo., 2018 U.S. Dist. LEXIS 122112).
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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.).
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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).
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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).
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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).
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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).