TYLER, Texas — A trial court abused its discretion in denying an insurer’s motion to sever and abate an insured’s extracontractual claims in a dispute over damage to an insured boat because the claims are severable and the insurer would be prejudiced if the extracontractual claims are not severed from the breach of contract claim, the 12th District Texas Court of Appeals said Oct. 14 (In re: Progressive Casualty Insurance Co., No. 12-20-00220-CV, Texas App., 12th Dist., 2020 Tex. App. LEXIS 8236).
TULSA, Okla. — An insured’s suit seeking coverage for storm-related damages and alleging claims for breach of contract and bad faith against two insurers must be remanded to Oklahoma state court because diversity of citizenship does not exist, an Oklahoma federal judge said Oct. 16 (Regent Preparatory School of Oklahoma v. Travelers Property Casualty Company of America, et al., No. 20-0512, N.D. Okla., 2020 U.S. Dist. LEXIS 192073).
SALEM, Ore. — A trial court did not err in concluding that an insured seeking attorney fees for an insurer’s alleging bad faith conduct is not entitled to attorney fees under Oregon law because the Oregon statute at issue does not allow an award of attorney fees when an insurer accepts coverage and liability and damages are the only remaining issues, the Oregon Court of Appeals said Oct. 14 (Tiffany Rice v. State Farm Mutual Automobile Insurance Co., No. A171563, Ore. App., 2020 Ore. App. LEXIS 1225).
TULSA, Okla. — An Oklahoma federal judge on Oct. 15 determined that a bad faith claim will proceed in a disability benefits dispute because genuine issues of material fact exist on the reasonableness of the disability insurer’s actions in its investigation of the claim (Jody Fees v. American Family Life Insurance Company of Columbus [Aflac], No. 19-476, N.D. Okla., 2020 U.S. Dist. LEXIS 190797).
LOS ANGELES — A general contractor claims in an Oct. 9 complaint filed in California federal court that an insurer breached its contract and acted in bad faith by refusing to defend the contractor in an arbitration arising out of a construction defects dispute (Tutor Perini Building Corp. v. First Mercury Insurance Co. et al., No. 20-9329, C.D. Calif.)
SAN FRANCISCO — In a Sept. 16 cross-appeal filed in the Ninth Circuit U.S. Court of Appeals, a commercial general liability insurer argues that Yahoo forfeited its claim to $618,380 in attorney fees under Brandt v. Superior Court in their data privacy coverage dispute but defends the lower court’s ruling that the policy’s deductible coverage endorsement is enforceable and precludes coverage for additional damages (Yahoo! Inc. v. National Union Fire Insurance Company of Pittsburgh, PA, No. 19-16475, 9th Cir.).
RALEIGH, N.C. — An insurer that is in rehabilitation filed three similar motions on Oct. 12 to dismiss bad faith and breach of fiduciary duty counterclaims brought by borrowers to loan agreements whom the insurer in three separate lawsuits accuses of breaching payments worth millions of dollars under their loan agreements (Colorado Bankers Life Insurance Company v. Kite Asset Management, LLC, No. 20-371; Colorado Bankers Life Insurance Company v. Summerville Asset Management, LLC, et al., No. 20-432; Colorado Bankers Life Insurance Company v. TAC Investments, LLC, No. 20-453, E.D. N.C.).
SANTA ANA, Calif. — A homeowners insurer has a duty to defend its insureds against a negligence claim stemming from the sale of their home and their failure to properly correct the home’s water intrusion issues because there is a possibility of coverage under the policy at issue, a California federal judge said Sept. 18 (Vivian Schwartz, et al. v. Kemper Independence Insurance Co., et al., No. 19-0559, C.D. Calif., 2020 U.S. Dist. LEXIS 187626).
PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on Oct. 9 affirmed a district court’s ruling in favor an insurer in a breach of contract and bad faith suit stemming from a wildfire damage claim after determining that the insureds failed to present a genuine dispute of material fact regarding the alleged physical damage to their home (Jensen Shirley, et al. v. Allstate Insurance Co., No. 19-56066, 9th Cir., 2020 U.S. App. LEXIS 32069).
CINCINNATI — An insurer argues in its Oct. 9 appellant brief to the Sixth Circuit U.S. Court of Appeals that all the elements of claim preclusion have been met and, therefore, the appellate court should reverse a lower court’s denial of its motion to dismiss an insured’s breach of contract and bad faith suit arising out of the insured’s liability for underlying asbestos claims (William Powell Company v. National Indemnity Company, et al., No. 20-3737, 6th Cir.).
PHILADELPHIA — An insured failed to sufficiently show that her insurer acted in bad faith in its handling of her claim for personal injury protection (PIP) after an automobile accident with an underinsured motorist (UIM) because her claim is preempted by state law and she has failed to sufficiently show that her insurer denied her claim for UIM or PIP coverage, a federal judge in Pennsylvania ruled Oct. 2 (Wanda Canfield v. Amica Mutual Insurance Co., et al., No. 20-2794, E.D. Pa., 2020 U.S. Dist. LEXIS 182843).
DALLAS — A federal judge in Texas on Oct. 7 granted an “all risk” commercial property insurer’s motion to dismiss its restaurant insured’s lawsuit seeking business interruption coverage for its losses arising from the novel coronavirus, allowing the insured to replead (Vandelay Hospitality Group LP v. The Cincinnati Insurance Company, et al., No. 20-01348, N.D. Texas, 2020 U.S. Dist. LEXIS 185581).
CINCINNATI — A federal judge in Ohio on Oct. 6 overruled an insurer’s objections and adopted a magistrate judge’s recommendation to deny the insurer’s motion to dismiss a breach of contract and bad faith lawsuit seeking crime protection insurance coverage for an alleged fraudulent scheme through which the insured’s employee stole $1,954,329.13 in commission payments (M&C Holdings Delaware, Partnership, et al. v. Great American Insurance Company, No. 20-121, S.D. Ohio).
LOS ANGELES — A federal judge in California on Oct. 2 granted an insurer's motion to dismiss a restaurant's coronavirus coverage lawsuit, finding that the insured failed to plausibly assert that it incurred a "physical loss of or damage to" its restaurant and that the policy's virus exclusion further bars all coverage (Mark's Engine Company No. 28 Restaurant, LLC v. The Travelers Indemnity Company of Connecticut, et al., No. 20-04423, C.D. Calif.).
LOS ANGELES — A California federal judge on Oct. 2 granted summary judgment in favor of a commercial property insurer on breach of contract and bad faith claims after determining that the insured failed to show how the insurer breached its contract in adjusting the insured's fire damage (Carson Cogeneration Company v. Scottsdale Insurance Company, et al., No. 19-10797, C.D. Calif., 2020 U.S. Dist. LEXIS 183283).
ALBUQUERQUE, N.M. — A New Mexico federal judge on Sept. 30 dismissed an insured's bad faith claim against a homeowners insurer after determining that the insured provided no evidence to support his contention that the insurer failed to timely settle his claim (Kenneth Lincoln v. State Farm Fire & Casualty Insurance Co., No. 18-652, D. N.M., 2020 U.S. Dist. LEXIS 179951).
BILLINGS, Mont. — A Montana federal judge on Sept. 30 denied a homeowners insurer's motion to dismiss an insured's bad faith claim after determining that the claim is not precluded by Montana's Unfair Trade Practices Act and rejected the insurer's argument that the suit should be dismissed because the insured did not submit to appraisal of the claim (Bo Kombol v. Allstate Insurance Co., et al., No. 20-70, D. Mont., 2020 U.S. Dist. LEXIS 180992).
SAN FRANCISCO — The franchisee of Outback Steakhouse restaurants in Arizona, Colorado, Nevada, New Mexico and California and its parent and affiliated companies on Sept. 29 sued an insurer in a California federal court, alleging that an all-risk insurance policy unambiguously provides coverage for its "direct and/or imminent physical loss" and property damage related to the novel coronavirus (Out West Restaurant Group Inc., et al. v. Affiliated FM Insurance Company, No. 20-06786, N.D. Calif.).
ATLANTA — A district court erred in granting summary judgment in favor of an auto insurer in a bad faith auto dispute because a reasonable jury could conclude that the damages claimed by the assignees of the insured were caused by the insurer's alleged bad faith conduct, the 11th U.S. Circuit Court of Appeals said Oct. 1 in vacating and remanding the district court's ruling (Yolanda Aldana, et al. v. Progressive American Insurance Co., No. 19-12950, 11th Cir., 2020 U.S. App. LEXIS 31223).
SANTA ANA, Calif. — A California federal judge on Sept. 30 denied an insurer's motion to dismiss a second amended complaint filed by insureds seeking a coverage declaration for underlying environmental contamination lawsuits because the insureds have proven that the insurer owes a duty to defend and the insureds supported their claims for breach of contract and bad faith (L.A. Terminals, et al. v. United National Insurance Co., No. 19-286, C.D. Calif., 2020 U.S. Dist. LEXIS 180268).