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Mealey's Insurance Bad Faith

  • October 19, 2018

    Fact Issues Remain On Whether Insurer Breached Contract, Judge Finds

    ALBUQUERQUE, N.M. — Homeowners sufficiently raised allegations on whether an insurer acted in good faith in denying their water damages claim and if the insurer breached the contract by failing to investigate the claim, a New Mexico federal judge ruled Oct. 17, denying summary judgment to the insurer on breach of contract claims (Hector Fava, et al. v. Liberty Mutual Insurance Corp., No. 17-456, D. N.M., 2018 U.S. Dist. LEXIS 179385).

  • October 19, 2018

    Plaintiff Opposes Dismissal Of Contract, Bad Faith Claims Against Reinsurer

    MONTGOMERY, Ala. — A reinsurer’s motion to dismiss breach of contract, bad faith and fraud claims should be denied, according to a plaintiff’s Oct. 16 brief in an Alabama federal court over the denial of benefits under four long-term disability insurance policies (Horace R. Theriot Jr. v. The Northwestern Mutual Life Insurance Co., et al., No. 18-688, M.D. Ala.).

  • October 18, 2018

    Bad Faith Counterclaims Alleged Against Insurer By Insureds To Proceed

    DETROIT — A Michigan federal judge on Oct. 17 granted an insurer’s motion to dismiss its complaint for declaratory judgment after determining that the counterclaims asserted by the insureds are sufficient to decide whether the insurer acted in bad faith by failing to settle an underlying personal injury suit within the policy limits before an excess judgment was entered against the insureds (Wausau Underwriters Insurance Co. v. Reliable Transportation Specialists Inc., et al., No. 15-12954, E.D. Mich., 2018 U.S. Dist. LEXIS 178318).

  • October 18, 2018

    Oregon Federal Judge Says Settlement Offer Cannot Be Basis Of Bad Faith Claim

    PORTLAND, Ore. — An Oregon federal judge on Oct. 17 denied an insured’s motion for summary judgment on a bad faith claim after determining that an insurer’s settlement offer, which was lower than the insured recovered after trial, cannot be the basis of a claim for bad faith (Peggy Foraker v. USAA Casualty Insurance Co., No. 14-87, D. Ore., 2018 U.S. Dist. LEXIS 178258).

  • October 17, 2018

    Panel Reverses Ruling In Favor Of Life Insurer, Says Carrier Was Not Prejudiced

    LOS ANGELES — The beneficiaries of a life insurance policy are entitled to benefits because the life insurance policy cannot be considered to have lapsed as the insurer failed to show that it was prejudiced by the insured’s failure to timely notify the insurer of a disability that would have entitled her to a deduction waiver under the policy, the Second District California Court of Appeal said Oct. 16 (Marty Lat v. Farmers New World Life Insurance Co., No. B282008, Calif. App., 2nd Dist., Div. 1, 2018 Cal. App. LEXIS 932).

  • October 16, 2018

    Insurer Granted Summary Judgment On Claim In Insurance Bad Faith Suit

    FORT WORTH, Texas — A federal judge overseeing an insurance breach of contract and bad faith lawsuit in Texas ruled Oct. 11 that an insured failed to show that its insurer breached any obligation it had under the terms of an insurance policy when it replaced roofing materials with lesser quality materials after the insured’s property sustained hail and windstorm damage to its roof because the insured failed to show that it sustained damages as a result of the alleged breach (University Baptist Church of Fort Worth v. Lexington Insurance Co., No. 17-962, N.D. Texas, 2018 U.S. Dist. LEXIS 175401).

  • October 16, 2018

    Insured Seeks Coverage For Sugar Contaminated By Excess Chlorine In Water

    BOISE, Idaho — An insured claims in an Oct. 15 complaint filed in Idaho federal court that its insurer breached its contract and acted in bad faith by denying coverage for the contamination of the insured’s sugar caused by an excess of chlorine contained in the water used to liquefy the sugar for the insured’s customers (The Amalgamated Sugar Co. LLC v. The Cincinnati Insurance Co., No. 18-448, D. Idaho).

  • October 16, 2018

    Issue Of Fact Exists On Insured’s Notice Of Environmental Claims

    LAFAYETTE, Ind. — An Indiana federal magistrate judge on Oct. 5 denied an insured’s motion for summary judgment on the duty to defend and indemnify in an environmental liability coverage suit after determining that an issue of fact exists as to whether the insured’s notice of the underlying environmental liability claims was timely pursuant to the policies at issue (Landis+Gyr, et al. v. Zurich American Insurance Co., No. 16-82, N.D. Ind., 2018 U.S. Dist. LEXIS 173197).

  • October 16, 2018

    Insurance Bad Faith Suit Dismissed For Lack Of Subject Matter Jurisdiction

    TAMPA, Fla. — A federal judge in Florida on Oct. 15 ruled that a federal district court lacks subject matter jurisdiction over an insured’s insurance breach of contract and bad faith lawsuit against her auto insurer because the amount in controversy requirement for diversity of citizenship in the lawsuit has not been met (Rhonda Hargrove-Davis v. State Farm Mutual Automobile Insurance, No. 18-923, M.D. Fla., 2018 U.S. Dist. LEXIS 176385).

  • October 15, 2018

    Jury Must Decide If Insurer Handled Yahoo Email Scanning Suits In Bad Faith

    SAN JOSE, Calif. — A California federal judge on Oct. 12 held that issues of fact preclude summary judgment as to whether a commercial general liability insurer acted in bad faith in its claims handling of underlying class actions filed against Yahoo! Inc. over its practice of scanning the content of emails (Yahoo! Inc. v. National Union Fire Insurance Company of Pittsburgh, PA, No. 17-00489, N.D. Calif., 2018 U.S. Dist. LEXIS 176115).

  • October 12, 2018

    Insureds Cannot Recover Emotional Distress Damages, Federal Magistrate Judge Says

    ALBUQUERQUE, N.M. — Insureds are not entitled to recover emotional distress damages as a result of an insurer’s alleged bad faith handling of their claim for water damages because the insureds suffered no physical injury that would entitle them to such damages under New Mexico law, a New Mexico federal judge said Oct. 10 (Hector Fava, et al. v. Liberty Mutual Insurance Corp., No. 17-456, D. N.M., 2018 U.S. Dist. LEXIS 175153).

  • October 11, 2018

    Texas Federal Judge Says Insurer Must Produce Claim Investigation File

    EL PASO, Texas — A Texas federal judge on Oct. 9 granted an insured’s motion to compel production of the insurer’s claim investigation file regarding one of the insured’s properties for which coverage was provided after determining that the file is relevant to the insured’s claims that the insurer breached its contract and acted in bad faith by denying coverage for another of the insured’s properties that was damaged on the same day by the same storm (Gary B. Crossland d/b/a Gold Cross Properties v. Nationwide Mutual Insurance Co., No. 18-85, W.D. Texas, 2018 U.S. Dist. LEXIS 173878).

  • October 11, 2018

    Claims Trimmed In Insurance Bad Faith Suit Over Sinkhole Coverage

    TRENTON, N.J. — A federal judge in New Jersey on Oct. 9 ruled that insureds in a homeowners insurance dispute failed to show that their insurer acted in bad faith in denying their claim for coverage because the insurer relied on information provided by two engineers showing that property damage to the home was not covered under the insurance policy (Natalie Orban, et al. v. Liberty Mutual Fire Insurance Co., No. 16-3050, D. N.J., 2018 U.S. Dist. LEXIS 173212).

  • October 9, 2018

    High Court Denies Review Of 11th Circuit’s Bad Faith Ruling In Auto Coverage Suit

    WASHINGTON, D.C. — The U.S. Supreme Court on Oct. 9 denied an insured’s petition for writ of certiorari, refusing to review the 11th Circuit U.S. Court of Appeals ruling in an insurance bad faith suit under the precedent set by the Supreme Court in Erie Railroad Co. v. Tompkins (David Duncan v. GEICO General Insurance Co., No. 18-108, U.S. Sup.).

  • October 8, 2018

    Insured Asks Texas High Court To Reverse Ruling In Hail, Wind Coverage Dispute

    AUSTIN, Texas — An insured recently told the Texas Supreme Court that its lawsuit seeking recourse against its insurer pursuant to the Texas Prompt Payment of Claims Act (TPPCA) is important to the state’s jurisprudence because it invites the high court to explain how the principles of USAA Texas Lloyds Co. v. Menchaca apply when an insurer invokes appraisal after the onset of litigation (Barbara Technologies Corporation v. State Farm Lloyds, No. 17-0640, Texas Sup.).

  • October 8, 2018

    Kentucky Jury Finds Insurer Acted In Bad Faith, Awards $14.3M In Punitive Damages

    SALYERSVILLE, Ky. — A Kentucky state jury on Sept. 28 entered a $14.3 million punitive damages verdict against an insurer after determining that the insurer acted in bad faith in refusing to provide coverage to its insured, an energy company accused of trespassing on Kentucky property owners’ lands to extract natural gas (Lahoma Salyer, et al. v. J.D. Carty Resources, et al., No. 07-00006, Ky. Cir., Magoffin Co.).

  • October 8, 2018

    Bad Faith Claim Against Insurer’s Parent Company Cannot Survive, Judge Says

    SAN FRANCISCO — An insured’s bad faith claim cannot be sustained against the parent company of a homeowners insurer because the insured failed to prove that the parent company acted in bad faith in the handling of her claim for water damages, a California federal judge said Oct. 3 (Tam Vu v. Liberty Mutual Insurance Co., et al., No. 18-3594, N.D. Calif., 2018 U.S. Dist. LEXIS 171347).

  • October 8, 2018

    Motion To Strike Bad Faith Claim Granted In Auto Insurance Dispute

    STAMFORD, Conn. — A Connecticut judge on Sept. 10 ruled that an insured failed to sufficiently plead allegations that her automobile insurance provider acted in bad faith in failing to properly investigate and evaluate her claim for coverage after an automobile accident with an underinsured motorist (Jessica Calorossi v. Allstate Fire & Casualty Insurance Co., No. FSTCV176032926S, Conn. Super, Stamford-Norwalk Dist., 2018 Conn. Super. LEXIS 2249).

  • October 8, 2018

    Bad Faith Claim Against Workers’ Comp Insurer Cannot Stand, Judge Says

    PHOENIX — A workers’ compensation claimant’s bad faith claim cannot stand because the claimant failed to obtain a compensability determination from the Industrial Commission of Arizona (ICA) before filing suit against the insurer, an Arizona federal judge said Sept. 30 (Bernard Higgins v. XL Insurance America Inc., No. 17-582, D. Ariz., 2018 U.S. Dist. LEXIS 168968).

  • October 5, 2018

    Insurer Did Not Breach Contract, Act In Bad Faith In Hiring Insureds’ Counsel

    KANSAS CITY, Kan. — A Kansas federal judge on Sept. 25 granted an insurer’s motion for summary judgment after rejecting the assignee’s counterclaims that the insurer breached its contract and acted in bad faith by failing to hire competent counsel to represent insureds in an underlying negligence case arising out of a vehicular homicide accident (Progressive Northwestern Insurance Co. v. Gabriel Gant, No. 15-9267, D. Kan., 2018 U.S. Dist. LEXIS 163624