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Mealey's Insurance Bad Faith

  • May 24, 2018

    Insurer Did Not Breach Contract In Handling Of Insureds’ Rental Car

    PHILADELPHIA — A Pennsylvania federal judge on May 17 granted an insurer’s motion for summary judgment in a proposed class action suit alleging that an insurer breached its contract and acted in bad faith by issuing a notice that limited the duration of a rental car following the appraisal of a vehicle totaled in a car accident because the insureds received a benefit under the policy and failed to prove how the insurer breached the contract (Kyle Stechert, et al. v. Travelers Home & Marine Insurance Co., No. 17-784,  E.D. Pa., 2018 U.S. Dist. LEXIS 83126).

  • May 24, 2018

    Breach Of Contract, Bad Faith Claims Cannot Stand Against Life Insurer

    ABERDEEN, Miss. — A Mississippi federal judge on May 15 granted a life insurer’s motion for summary judgment on an insured’s claims for breach of contract and bad faith after determining that the claims fail because the life insurance policy at issue was terminated before the insured filed a claim under the policy (Kay Fleming v. Jackson National Life Insurance Co., et al., No. 16-156, N.D. Miss., 2018 U.S. Dist. LEXIS 82749).

  • May 23, 2018

    Insurer’s Denial Of Coverage Under Exclusion Was Not In Bad Faith, Judge Rules

    SCRANTON, Pa. — A water exclusion in a homeowners insurance policy is unambiguous and precluded coverage for damages caused when sewage backed up into an insured’s basement; as a result, an insurer did not act in bad faith in denying coverage, a federal judge in Pennsylvania ruled May 21 in granting the insurer’s motion for summary judgment (Audrey Sanko v. Allstate Insurance Co., No. 16-1620, M.D. Pa., 2018 U.S. Dist. LEXIS 84943).

  • May 23, 2018

    Judge Limits Liberty Mutual’s Defenses Against Window Maker’s Bad Faith Suit

    TAMPA, Fla. — A federal judge in Florida on May 18 granted in part motions for partial summary judgment filed by a window and door manufacturer seeking recovery of $3 million it paid to resolve five defects lawsuits in Alabama state court, finding that its insurer, Liberty Mutual Fire Insurance Co., could not raise defenses of res judicata, contributory bad faith, comparative bad faith and mitigation (MI Windows & Doors LLC, et al. v. Liberty Mutual Fire Insurance Co., No. 14-cv-3139-T-23MAP, M.D. Fla., 2018 U.S. Dist. LEXIS 83918).

  • May 22, 2018

    Insurer Found To Have Not Delayed In Paying On Homeowners Insurance Claim

    AUSTIN, Texas — Granting a motion for partial summary judgment in an insurance breach of contract and bad faith lawsuit, a federal judge in Texas on May 17 ruled that an insurer did not intentionally delay paying on a claim for coverage under a homeowners insurance policy and that insureds failed to show that the insurer’s delay in payment caused injuries that were independent of their policy claim (Thomas G. Kezar, et al. v. State Farm Lloyds, No. 17-389, W.D. Texas, 2018 U.S. Dist. LEXIS 83157).

  • May 21, 2018

    Breach Of Contract Claim, Unsupported Bad Faith Claim Dismissed

    MOBILE, Ala. — In granting a motion to strike and dismiss, a federal judge in Alabama on May 16 ruled that two claims in an insurance breach of contract and bad faith lawsuit are nearly identical, and an insured’s bad faith claim lacks any factual allegations to support it (Carlos Todd v. State Farm Fire and Casualty Co., No. 18-0175, S.D. Ala., 2018 U.S. Dist. LEXIS 82410).

  • May 21, 2018

    South Carolina Federal Judge Refuses To Reconsider Bad Faith Ruling

    FLORENCE, S.C. — A South Carolina federal judge on May 16 refused to reconsider a denial of summary judgment to an insurer on an insured’s bad faith allegation arising out of the handling of an underinsured motorist benefits claim because genuine issues of fact exist as to whether the insurer’s conduct was reasonable (Ethel Powell v. State Farm Fire and Casualty Co., No. 16-2795, D. S.C., 2018 U.S. Dist. LEXIS 82164).

  • May 18, 2018

    Judge: Insured Failed To Show Insurer’s Settlement Offer Was In Bad Faith

    STAMFORD, Conn. — A Connecticut Superior Court judge on April 25 granted an insurer’s motion to strike a bad faith claim in an insurance dispute, ruling that an insured failed to show that the insurer’s offer to settle an underinsured motorist (UIM) claim was in bad faith (Jobiada Mukta v. State Farm Mutual Automobile Insurance, No. FSTCV176032656S, Conn. Super., Stamford-Norwalk Dist., 2018 Conn. Super. LEXIS 845).

  • May 17, 2018

    Disability Claimant Alleges Denials Were Based On Profit-Making Motive

    CHATTANOOGA, Tenn. — A disability insurer breached its contract and acted in bad faith when it terminated a claimant’s short-term disability (STD) benefits and denied a claim for long-term disability benefits because the decisions were based on a profit-making motive rather than the evidence of the claimant’s disability, the claimant alleges in a May 14 complaint filed in Tennessee federal court (Janet Mitchell v. Unum Life Insurance Company of America, et al., No. 18-94, E.D. Tenn.).

  • May 16, 2018

    Insurer’s Use Of Age Deterioration Formula Deemed To Be In Bad Faith

    TACOMA, Wash. — An insurer acted in bad faith in using an age deterioration formula in estimating depreciation for personal items damaged in a house fire that were covered under a homeowners insurance policy because the formula failed to consider physical deterioration and obsolescence, a federal judge in Washington ruled May 10 in granting in part an insured’s summary judgment motion and denying the insurer’s motion for summary judgment in its entirety (Tom Sparks v. American Family Mutual Insurance Co., No. 18-5038, W.D. Wash., 2018 U.S. Dist. LEXIS 79249).

  • May 16, 2018

    Panel Affirms Judgment In Favor Of Insurer In Water Damage Dispute

    AMARILLO, Texas — The Seventh District Texas Court of Appeals on May 14 affirmed a trial court’s ruling in favor of an insurer after determining that the trial court did not err in concluding that the insurer did not breach its contract or act in bad faith in its handling of the insured’s claim for water damage (Mahmoud Abdalla v. Farmers Insurance Exchange, No. 07-17-00020, Texas App., 7th Dist., 2018 Tex. App. LEXIS 3358).

  • May 15, 2018

    Insured’s Motion To Remand Auto Theft Suit Denied; Amount In Controversy Met

    SAN FRANCISCO — A California federal judge on May 14 denied an insured’s motion to remand a suit alleging claims for breach of contract and bad faith arising out of an insurer’s refusal to pay for the theft of the insured’s vehicle because diversity of citizenship exists and the amount in controversy exceeds the federal jurisdictional minimum amount of $75,000 (Jennifer Smith-Dickerson v. State Farm Mutual Automobile Insurance Co. Inc., No. 18-189, N.D. Calif., 2018 U.S. Dist. LEXIS 81085).

  • May 15, 2018

    Auto Insurer Did Not Act In Bad Faith In Handling Underinsured Motorist Claim

    SCRANTON, Pa. — A Pennsylvania federal judge on May 11 granted an insurer’s motion for summary judgment on a bad faith claim after determining that the insured failed to provide clear and convincing evidence that the insurer acted in bad faith in its handling of the insured’s claim for underinsured motorist (UIM) benefits (Brittany Shaw v. USAA Casualty Insurance Co., No. 17-947, M.D. Pa., 2018 U.S. Dist. LEXIS 80101).

  • May 14, 2018

    Third-Party Bad Faith Claims Barred By Statute Of Limitations, Panel Says

    SEATTLE — The Ninth Circuit U.S. Court of Appeals on May 11 affirmed a district court’s ruling that statutory and common-law third-party bad faith claims alleged against an auto insurer are barred by the statute of limitations because the claimant did not file suit against the insurer until more than three years after judgment had been issued in the underlying tort suit (Rocky Dietz v. GEICO General Insurance Co., No. 17-35011, 9th Cir., 2018 U.S. App. LEXIS 12351).

  • May 11, 2018

    Insurer’s Coverage Denial Was Not Unreasonable, Federal Judge Says

    BOSTON — A Massachusetts federal judge on May 2 said that an insurer’s denial of coverage does not rise to the level of bad faith because the denial of coverage for an underlying suit arising out of the mismanagement of an investment fund, which was ultimately proven to be incorrect, was not unreasonable (Scottsdale Insurance Co. v. Timothy Byrne, et al., No. 16-11435, D. Mass., 2018 U.S. Dist. LEXIS 73974).

  • May 10, 2018

    Plaintiffs In Insurance Bad Faith Suit Permitted To Seek Class Status

    NEW CASTLE, Del. — A Delaware judge on April 24 ruled that plaintiffs in an insurance breach of contract and bad faith lawsuit may continue to seek class status, ruling that an insurer failed to show that the plaintiffs would be unable to maintain class status at the point in the litigation (Yvonne Green, et al. v. GEICO General Insurance Co., No. N17C-03-242, Del. Super., 2018 Del. Super. LEXIS 180).

  • May 10, 2018

    Trustee’s Bad Faith Claim Survives Dismissal; Others Trimmed From Suit

    CINCINNATI — A trustee’s pleading of “expectancy damages” is enough for her bad faith claim to survive dismissal, but she has failed to state a claim for relief for most of her other claims against an insurer, a federal judge in Ohio ruled May 4 in partially dismissing the trustee’s amended complaint (Vivian Farris v. U.S. Financial Life Insurance Co., No. 17-417, S.D. Ohio, 2018 U.S. Dist. LEXIS 75962).

  • May 9, 2018

    Judge Denies Insurer’s, Insured’s Summary Judgment Motions On Bad Faith Claim

    PITTSBURGH — A federal judge in Pennsylvania on May 7 ruled that neither an insurer nor an insured was entitled to summary judgment on an insurance bad faith claim because a reasonable jury could rule in either party’s favor on the claim in an automobile insurance dispute (Melissa C. Parisi, et al. v. State Farm Mutual Automobile Insurance Co., No. 16-179, W.D. Pa., 2018 U.S. Dist. LEXIS 76246).

  • May 9, 2018

    Motion To Remand Denied; Agent Fraudulently Joined To Defeat Jurisdiction

    SANTA FE, N.M. — A federal circuit judge, sitting by designation in the District of New Mexico, on May 7 denied an insured’s motion to remand a suit alleging that an insurer and its agent acted in bad faith after determining that the insurer’s agent was fraudulently joined to defeat diversity jurisdiction (Erin Foy v. State Farm Mutual Automobile Insurance Co., et al., No. 17-992, D. N.M., 2018 U.S. Dist. LEXIS 76949).

  • May 8, 2018

    Federal Judge Says Policy Affords Coverage For Water Intrusion And Mold

    SEATTLE — A Washington federal judge on May 7 determined that while a coverage ruling regarding an insured’s claim for water intrusion damages and investigation costs could not be made at this juncture, the insurer’s policy does afford coverage for water intrusion and mold (Market Place North Condominium Association v. Affiliated FM Insurance Co., No. 17-625, W.D. Wash., 2018 U.S. Dist. LEXIS 76724).