Mealey's Insurance Bad Faith
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April 18, 2019
Rental Property Insurer Did Not Breach Contract, Act In Bad Faith, Judge Says
SPOKANE, Wash. — A Washington federal judge on April 15 granted an insurer’s motion for summary judgment on claims alleging breach of contract and bad faith after determining that the insurer did not breach its contract or act unreasonably in paying for repairs to the insured’s rental property that was damaged by a fire (Barry Chapman, et al. v. State Farm Fire and Casualty Co., No. 17-225, E.D. Wash., 2019 U.S. Dist. LEXIS 64588).
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April 17, 2019
Judge: Insurer Liable For Breach Of Contract In Dispute With Massage Therapist
LAS VEGAS — A Nevada federal judge on March 31 allowed a massage therapist’s breach of contract, bad faith and declaratory judgment claims to proceed in a coverage dispute arising from underlying allegations that he engaged in inappropriate sexual acts while he was performing a massage (Starr Indemnity & Liability Company v. Limmie Young, III, et al., No. 14-00239, D. Nev., 2019 U.S. Dist. LEXIS 55467).
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April 17, 2019
Insurer Did Not Breach Contract; Insureds Failed To Comply With Policy Terms
RALEIGH, N.C. — A trial court did not err in granting summary judgment in favor of an insurer in a water and mold damage dispute because the insureds did not comply with all of their duties under the policy, the North Carolina Court of Appeals said April 16 (Barbara C. Lyon, et al. v. Service Team of Professionals [Eastern Carolina] LLC, d/b/a 24/Store, et al., No. COA18-627, N.C. App., 2019 N.C. App. LEXIS 359).
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April 16, 2019
Bad Faith Claim Against Workers’ Comp Claims Administrator Cannot Stand
PRESCOTT, Ariz. — An Arizona federal judge on April 15 dismissed a workers’ compensation claimant’s bad faith claim against an insurer’s third-party claims administrator because a bad faith claim can be filed only against the insurer and not the third-party claims administrator (Joseph Martin McGhee v. Sedgwick Claims Management Services Inc., No. 19-8003, D. Ariz., 2019 U.S. Dist. LEXIS 64190).
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April 16, 2019
Panel: Court Fails To Consider Role Of Fortuity In All Risk Insurance Disputes
SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on April 15 reversed a lower federal court’s grant of summary judgment in favor of an insurer on the question of whether the cause of the insured’s damage was an "external" force not covered under an all risks insurance policy, finding that “at the very least” there is a triable issue of fact as to whether the insured’s loss was fortuitous (Ingenco Holdings LLC, et al. v. Ace American Insurance Company, No. 16-35792, 9th Cir., 2019 U.S. App. LEXIS 10946).
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April 15, 2019
Insured Seeks Coverage For Claim Over Deficient Materials Used In Flood Project
OAKLAND, Calif. — A general contractor insured on April 8 filed suit in the U.S. District Court for the Northern District of California seeking coverage for an underlying lawsuit alleging that materials used as new fill for the levees in a flood protection project were deficient (Brosamer & Wall, Inc. v. Indian Harbor Insurance Company, No. 19-872, N.D. Calif.).
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April 15, 2019
Retired Judge’s Opinion Testimony Excluded, May Be Prejudicial To Insurer
DETROIT — A Michigan federal judge on April 10 granted an insurer’s motion to exclude the opinion testimony of a retired judge who presided over an underlying personal injury suit that resulted in a $22.6 million verdict against the insureds because the retired judge’s testimony could be prejudicial to the insurer, which is defending itself against a bad faith claim asserted by the insureds (Reliable Transportation Specialists Inc., et al. v. Wausau Underwriters Insurance Co., No. 15-12954, E.D. Mich., 2019 U.S. Dist. LEXIS 61537).
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April 12, 2019
Texas Federal Magistrate Judge Recommends Denying Remand Of Insured’s Suit
SAN ANTONIO — An insured’s breach of contract and bad faith suit arising out of a property damage coverage dispute was properly removed to federal court by a homeowners insurer because it is clear from the insured’s complaint and presuit demand letter that the federal amount-in-controversy requirement has been met, a Texas federal magistrate judge said April 9 in recommending that the insured’s motion to remand be denied (Veronica Horton v. Allstate Vehicle and Property Insurance Co., et al., No. 19-140, W.D. Texas, 2019 U.S. Dist. LEXIS 61544).
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April 12, 2019
Rulings In Favor Of Auto Insurer On Breach Of Contract, Bad Faith Claims Affirmed
SAN FRANCISCO — A district court did not err in dismissing an insured’s breach of contract claim and in granting an auto insurer’s motion for summary judgment on a bad faith claim because the insured was not owed any contractual benefits under the auto policy, the Ninth Circuit U.S. Court of Appeals said April 10 (Maria Neumayer v. Allstate Insurance Co., et al., No. 17-56469, 9th Cir., 2019 U.S. App. LEXIS 10620).
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April 12, 2019
Kentucky Panel Reverses $4.5M Bad Faith Verdict In Personal Injury Dispute
FRANKFORT, Ky. — The Kentucky Court of Appeals on April 5 reversed a $4.5 million bad faith judgment entered against a commercial liability insurer because the issue of coverage was never established and the jury verdict was flagrantly against the evidence presented in the personal injury coverage suit (Cincinnati Insurance Co. v. Haley Belt, et al., No. 2017-155, Ky. App., 2019 Ky. App. Unpub. LEXIS 222).
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April 10, 2019
Settlement Release Bars Breach Of Contract, Bad Faith Claims Against Auto Insurer
WHEELING, W.Va. — An insured’s claims for breach of contract and bad faith alleged against an auto insurer must be dismissed because the insured signed a settlement agreement releasing the insurer from any contractual liability, a West Virginia federal judge said April 9 in granting the insurer’s motion to dismiss (Shawn Durbin v. Nationwide Mutual Insurance Co., et al., No. 18-211, N.D. W.Va., 2019 U.S. Dist. LEXIS 60522).
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April 10, 2019
Auto Insurer’s Communications With Insured Are Relevant To Bad Faith Claim
OCALA, Fla. — An auto insurer’s communications with its insured regarding a potential settlement of a suit filed against the insured following an auto accident are relevant to a bad faith claim alleged against the auto insurer by the underlying plaintiffs, a Florida federal magistrate judge said April 5 in partially granting the plaintiffs’ motion to compel (Yolanda Aldana, et al. v. Progressive American Insurance Co., No. 18-157, M.D. Fla., 2019 U.S. Dist. LEXIS 59015).
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April 8, 2019
Insurance Agent, Adjuster Improperly Joined In Bad Faith Suit, Judge Rules
JACKSON, Miss. — Ruling that an insurance agent and insurance adjuster were improperly joined in an insurance breach of contract and bad faith lawsuit, a federal judge in Mississippi on March 30 denied an insured’s motion to remand, holding that complete diversity of citizenship of the remaining parties exists, providing the federal court with subject matter jurisdiction (Jennifer Luckett v. Allstate Indemnity Co., et al., No. 18-0275, S.D. Miss., 2019 U.S. Dist. LEXIS 54942).
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April 8, 2019
Summary Judgment Motions Denied In Bad Faith Suit Against Auto Insurer
PHOENIX — A federal judge in Arizona on March 21 denied motions for summary judgment filed by both insureds and an insurer in a breach of contract and insurance bad faith lawsuit stemming from an automobile accident, ruling that genuine issues of material fact exist as to whether the insurer acted in bad faith in failing to properly handle the insureds’ underinsured motorist claims (Louis Wikler, et al. v. Privilege Underwriters Inc., et al., No. 17-2664, D. Ariz., 2019 U.S. Dist. LEXIS 47016).
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April 8, 2019
Claims Dismissed In Breach Of Contract, Bad Faith Suit Over Flood Damage
LAS VEGAS — A federal judge in Nevada on March 20 ruled that insureds failed to sufficiently show that an insurer breached its contract with them or acted in bad faith in denying coverage under their homeowners insurance policy after their septic tank backed up and flooded their home (Manish Patel v. American National Property and Casualty Co., No. 18-0667, D. Nev., 2019 U.S. Dist. LEXIS 46721).
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April 8, 2019
Excess Insurer’s Settlement Negotiations Are Not Relevant To Bad Faith Dispute
BROOKLYN, N.Y. — A New York federal judge on March 26 said a primary insurer cannot introduce evidence regarding the excess insurer’s settlement negotiations in an underlying auto coverage suit filed against an insured because the settlement negotiations are not relevant to the issue of whether the primary insurer acted in bad faith in failing to settle the underlying suit within its primary policy limits (Ohio Casualty Insurance Co. v. Twin City Fire Insurance Co., No. 14-858, E.D. N.Y., 2019 U.S. Dist. LEXIS 50504).
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April 8, 2019
Insurer Did Not Act In Bad Faith In Denying Claim For Insured’s Water Leak
ALLENTOWN, Pa. — A bad faith claim alleged against a homeowners insurer cannot stand because the insured failed to provide evidence showing that the insurer refused or failed to properly evaluate and make a payment on the insured’s claim for a water leak caused by aging pipes in the insured’s home, a Pennsylvania federal judge said March 29 (Martha Mitchell v. Allstate Insurance Co. No. 17-1806, E.D. Pa., 2019 U.S. Dist. LEXIS 55613).
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April 5, 2019
Contractual, Tortious Bad Faith Claims Survive Dismissal Attempt
PROVIDENCE, R.I. — A federal judge in Rhode Island on April 2 rejected an automobile insurance provider’s argument that its insured’s contractual bad faith claim should be dismissed because no such claim exists when a party has also brought a breach of contract claim, ruling that even if the insurer’s argument were true, such argument is not “a valid basis for dismissal” under state law (Jeffrey Petrarca v. Garrison Property and Casualty Insurance Co., No. 18-454, D. R.I., 2019 U.S. Dist. LEXIS 56272).
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April 3, 2019
Bad Faith Claim Is Not Duplicative Of Insured’s Breach Of Contract Claim
ALBANY, N.Y. — An insured’s bad faith claim alleged against a property insurer is not duplicative of the insured’s breach of contract claim and can stand as a separate claim, a New York federal judge said March 29 in partially denying the insurer’s motion to dismiss (Phi Epsilon Building Association of Alpha Chi Ro Inc. v. RSUI Indemnity Co., No. 18-547, N.D. N.Y., 2019 U.S. Dist. LEXIS 53461).
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April 2, 2019
Pennsylvania High Court To Review $21M Bad Faith Award Entered By Trial Court
HARRISBURG, Pa. — The Pennsylvania Supreme Court on March 29 granted a petition for review, agreeing to review whether an appellate court erred in vacating a state trial court’s award of more than $21 million entered in favor of the insureds and against an auto insurer in a bad faith suit (Daniel Berg v. Nationwide Mutual Insurance Co. Inc., No. 569 MAL 2018, Pa. Sup.).