Mealey's Insurance Bad Faith

  • February 16, 2018

    Judge Declines To Apply ‘Fraudulent Misjoinder’ Standard In Bad Faith Suit

    SAN FRANCISCO — Remand of an insurance breach of contract and bad faith lawsuit to state court is necessary because the Ninth Circuit U.S. Courts of Appeals has yet to adopt the “fraudulent misjoinder” standard established by the 11th Circuit, which an insurer argues is the basis for the action’s removal to federal court in the first place, a federal judge in California ruled Feb. 13 in remanding the action to state court (Maria I. Delgado v. Primerica Life Insurance Co., et al., No. 17-3744, N.D. Calif., 2017 U.S. Dist. LEXIS 23615).

  • February 16, 2018

    Class: Life Insurer, Private Investment Firm Unlawfully Raised Prices In Policies

    NEW YORK — A life insurer and a private investment firm, which acquired the insurer, unlawfully increased the cost of premiums to recoup costs associated with the acquisition, among other reasons, plaintiffs allege in a Feb. 13 class action filed in a New York federal court (Derek Fan, et al. v. Phoenix Life Insurance Co., et al., No. 18-01288, S.D. N.Y.).

  • February 16, 2018

    Florida Majority Reverses $493,246 Attorney Fee Award In Sinkhole Coverage Suit

    LAKELAND, Fla. — A majority of the Second District Florida Court of Appeal on Feb. 14 reversed a lower court’s $493,246.50 attorney fees award against an insurer in a sinkhole coverage dispute and remanded for further proceedings (Citizens Property Insurance Corporation v. Meghan Anderson, No. 2D16-616, Fla. App., 2nd Dist. 2018 Fla. App. LEXIS 2245).

  • February 15, 2018

    Judge Allows Breach Of Contract Claim Against Insurer To Proceed To Trial

    NEW HAVEN, Conn. — After dismissing all claims based on a “collapse” from faulty concrete against one homeowners insurer for not occurring during its policy period, a Connecticut federal judge on Feb. 13 dismissed all but a breach of contract claim against another insurer because a reasonable jury could find that the insurer breached its policy (Shawn M. Kowalyshyn, et al. v. Excelsior Insurance Co., et al., No. 16-00148, D. Conn., 2018 U.S. Dist. LEXIS 22981).

  • February 13, 2018

    Claims Against Insurer Fail; Plaintiffs Failed To Show They Are Third-Party Beneficiaries

    OKLAHOMA CITY — The daughter and daughter-in-law of a named insured cannot assert claims for breach of contract and bad faith against an insurer in connection with a coverage claim for water and mold damages within an insured home because the daughter and daughter-in-law failed to prove that they are third-party beneficiaries under the policy at issue, an Oklahoma federal judge said Feb. 6 in granting an insurer’s motion to dismiss (Karen Annette Foster-Blackwood, et al. v. Liberty Insurance Corp., No. 17-1146, W.D. Okla., 2018 U.S. Dist. LEXIS 19275).

  • February 12, 2018

    Insureds’ Complaint Seeking Coverage For Foundation Damages Dismissed

    BRIDGEPORT, Conn. — A Connecticut federal judge on Feb. 8 granted an insurer’s motion to dismiss its insureds’ amended complaint seeking damages as a result of defective concrete used in their home’s foundation after determining that the insureds failed to carry their burden of proving that coverage is afforded under the policy and that the insurer acted in bad faith when it denied their claim (Joseph Mazzarella, et al. v. Amica Mutual Insurance Co., No. 17-598, D. Conn., 2018 U.S. Dist. LEXIS 20737).

  • February 9, 2018

    Insured Does Not Show Contract With Reinsurer, Federal Judge Concludes

    PITTSBURGH — An insured is not in contractual privity with a reinsurer under an insurance policy or a reinsurance agreement, a Pennsylvania federal judge held Feb. 8, dismissing breach of contract, bad faith and civil conspiracy claims (Three Rivers Hydroponics LLC v. Florists’ Mutual Insurance Co., et al., No. 15-00809, W.D. Pa., 2018 U.S. Dist. LEXIS 20699).

  • February 9, 2018

    Judge Erred In Finding That Dispute Existed In Bad Faith Suit, Panel Rules

    ATLANTA — A federal district court erred in ruling that a bona fide dispute existed as to whether a woman was the proper beneficiary to her deceased husband’s life insurance policies, an 11th Circuit U.S. Court of Appeals panel ruled Feb. 5 in vacating and remanding the action to the district court (Anne Mangano v. Jackson National Life Insurance Company, No. 16-11685-C, 11th Cir.).

  • February 8, 2018

    Insured Failed To Prove Insurer Acted In Bad Faith In Handling Auto Claim

    MONROE, La. — A Louisiana federal judge on Jan. 25 determined that an insured’s bad faith claim cannot stand because the insured failed to provide evidence supporting her contentions that the insurer failed to timely tender underinsured motorists benefits and that the insurer’s unconditional tender of benefits was “abusively low” (Cindy Samberg v. Progressive Paloverde Insurance Co., No. 16-1754, W.D. La., 2018 U.S. Dist. LEXIS 14917).

  • February 8, 2018

    Insured’s Bad Faith, Breach Of Contract Claims Fail As A Result Of Appraisal Payment

    SAN ANTONIO — The Fourth District Texas Court of Appeals on Jan. 31 reversed and remanded a trial court’s denial of summary judgment in favor of an insured on breach of contract and bad faith claims after determining that the insurer’s timely payment of the insured’s property damage claim following an appraisal proceeding extinguished the insured’s claims for breach of contract and bad faith (Wellington Insurance Co., et al. v. Victor Banuelos, No. 04-17-00365, Texas App., 4th Dist., 2018 Tex. App. LEXIS 848).

  • February 7, 2018

    Water Leakage, Seepage Excluded Under Homeowners Insurance Policy, Judge Says

    MISSOULA, Mont. — The efficient proximate cause of homeowners’ loss was repeated seepage or leakage of water over an extended period of time, which is an excluded peril under a homeowners insurance policy, a Montana federal judge ruled Feb. 5 (Tafford and LaRayne Oltz v. Safeco Insurance Company of America, No. 16-124, D. Mont., 2018 U.S. Dist. LEXIS 18743).

  • February 6, 2018

    Theft Over Multiple Days Constitutes 1 Occurrence, 9th Circuit Affirms

    SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on Feb. 5 affirmed a lower court’s ruling in favor of a business insurer on insureds’ claims for breach of contract and bad faith, finding that theft of business merchandise over the course of multiple days is still considered to be one "occurrence” under the insurance policy (Patrick E. Patterson, et al. v. American Economy Insurance Co., No. 16-16445, 9th Cir., 2018 U.S. App. LEXIS 2846).

  • February 6, 2018

    Insured Provides Sufficient Facts In Support Of Bad Faith Claim, Judge Says

    HARTFORD, Conn. — A Connecticut judge on Jan. 2 determined that an insured’s bad faith claim should not be dismissed because the insured sufficiently alleged that the insurers had a dishonest purpose in adjusting the claim for underinsured motorist benefits (Michael K. Rood v. Covenant Insurance Co., et al., No. 156059856S, Conn. Super., 2018 Conn. Super. LEXIS 3).

  • February 6, 2018

    Judge: Insurer Breached Duty To Defend, Acted In Bad Faith In Denial Of Suit

    SEATTLE — An insurer’s denial of defense, unsupported by evidence from a complaint against an insured, was a breach of its duty to defend, a Washington federal judge ruled Feb. 5, also finding that the insurer acted in bad faith despite its “later change of heart” (2FL Enterprises LLC v. Houston Specialty Insurance Co., No. 17-676, W.D. Wash., 2018 U.S. Dist. LEXIS 18605).

  • February 6, 2018

    Insureds’ Claims For Contract Breach, Bad Faith Can Stand, Federal Judge Determines

    TULSA, Okla. — An Oklahoma federal judge on Feb. 2 denied an insurer’s motion for summary judgment on breach of contract and bad faith claims in a dispute over coverage for earthquake and mold damages after determining that the insureds offered sufficient evidence to support their claims (Larry W. Thomas, et al. v. Farmers Insurance Co., No. 16-17, N.D. Okla., 2018 U.S. Dist. LEXIS 17418).

  • February 5, 2018

    Protective Order, Compel Motions Partly Granted In Accident Coverage Dispute

    OKLAHOMA CITY — In a Feb. 2 discovery order, an Oklahoma federal judge partly granted an injured motorist’s motion to compel certain claims and training materials from her employer’s insurer, deeming some irrelevant to her underinsured motorist (UIM) claim and finding some to be likely protected by attorney-client privilege (Nickie Amber O’Brien v. Travelers Property Casualty Company of America, et al., No. 5:16-cv-01176, W.D. Okla., 2018 U.S. Dist. LEXIS 17421).

  • February 5, 2018

    Summary Judgment Ruling In Flood Insurance Suit Affirmed By 3rd Circuit

    PHILADELPHIA — A federal district court did not err in granting summary judgment in favor of an insurer in an insurance breach of contract and bad faith lawsuit because an insurer’s lawsuit against his flood insurance provider was time-barred since he filed the suit outside the one-year statute of limitations for standard flood insurance policies (SFIP), a Third Circuit U.S. Court of Appeals panel ruled Jan. 31 in affirming (Anthony Migliaro v. Fidelity National Indemnity Insurance Co., No. 17-1434, 3rd Cir., 2018 U.S. App. LEXIS 2097).

  • February 2, 2018

    Jury Finds Insurer Acted In Bad Faith In Handling Auto Injury Claim

    JACKSONVILLE, Fla. — A Florida state jury on Jan. 26 entered a verdict against an insurer after determining that the insurer acted in bad faith in handling an auto injury claim on behalf of its insured and in exposing the insured to an excess judgment of approximately $8 million (Kevin Whitney v. Mercury Insurance Company of Florida, No. 16-2016-CA-000925, Fla. Cir., Duval Co.).

  • February 2, 2018

    Texas Federal Judge Denies Motion To Remand, Dismisses Adjuster As A Defendant

    FORT WORTH, Texas — A Texas federal judge on Jan. 25 denied an insured’s motion to remand in a property damage coverage dispute after determining that the insured failed to support its allegations that the claims adjuster breached the duty of good faith and fair dealing (University Baptist Church v. Lexington Insurance Co., et al., No. 17-962, N.D. Texas, 2018 U.S. Dist. LEXIS 12057).

  • February 2, 2018

    Pennsylvania Federal Judge Allows Class To Add Bad Faith Claim Against Life Insurer

    PHILADELPHIA — In a consolidated class action against a life insurer for breaches of its policies through consideration of lower investment income and higher reinsurance costs, a Pennsylvania federal judge on Feb. 1 allowed the class to amend its complaint to add a tortious breach of good faith and fair dealing claim on behalf of a California subclass (In re: Lincoln National Co. Litigation, No. 16-06605, E.D. Pa., 2018 U.S. Dist. LEXIS 16355).