Mealey's Insurance Bad Faith : Mealey's : Legal News & Analysis

Mealey's Insurance Bad Faith

March 13, 2024
Bad Faith Claims Fail In Coverage Suit Over Missing Artwork, Rolex Watch

TUSCON, Ariz. — An Arizona federal judge granted an insurer’s motion for summary judgment on an insured’s bad faith claims after determining that one of the bad faith claims related to the theft of artwork cannot proceed because the breach of contract claim related to the artwork fails and the other bad faith claim related to a missing Rolex watch fails because the issue of coverage was fairly debatable.
March 12, 2024
Judge Denies Summary Judgment On Bad Faith, Insurance Code Violation Claims

SHERMAN, Texas — A Texas federal judge on March 11 partially adopted magistrate judge’s recommendation to grant a homeowners insurer’s motion for summary judgment on a breach of contract claim related to the insureds’ claim for damages to their pool and landscaping; however, the judge rejected a portion of the magistrate judge’s report and denied the insurer’s motion on the claim for bad faith and a number of the claims alleging violations of the Texas Insurance Code.
March 12, 2024
9th Circuit Partly Reverses Ruling In $40M Commercial Crime Coverage Dispute

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on March 11 reversed a lower federal court’s dismissal of a financial services company insured’s claim for loss under its commercial crime insurance policy’s “Computer And Funds Transfer Fraud Insuring Agreement” and its claim for tortious breach of the implied covenant of good faith and fair dealing, finding that the authorized submission of fraudulent electronic data into the insured’s computer system can arguably be described as “fraudulent entry” to trigger coverage.
March 12, 2024
Discovery Orders Granted, Appeal Filed In Vesttoo Chapter 11 Bankruptcy Cases

WILMINGTON, Del. — A notice of appeal has been filed concerning the confirmation of a Chapter 11 plan of liquidation for Vesttoo Ltd. and its dozens of affiliates, and a Delaware federal bankruptcy judge on March 11 granted four unopposed motions for leave to conduct discovery against banking entities.
March 11, 2024
Extracontractual Claims Against Homeowners Insurer Cannot Proceed, Judge Says

BROWNSVILLE, Texas — An insured’s extracontractual claims alleged against a homeowners insurer in a storm damage coverage dispute cannot proceed because the evidence shows that a reasonable coverage dispute existed, a Texas federal judge said in granting the insurer’s motion for summary judgment.
March 07, 2024
5th Circuit Affirms Arbitration Order In $7M Hurricane Ida Dispute

NEW ORLEANS — A Fifth Circuit U.S. Court of Appeals panel on March 6 affirmed an order compelling arbitration of an insureds’ claims for $7 million in damages caused by Hurricane Ida and for bad faith against a group of foreign and domestic insurers that had provided it a surplus line policy.
March 07, 2024
Contractor Seeks 6th Circuit’s Review Of Coverage Rulings In Wall Collapse Suit

CHATTANOOGA, Tenn. — Less than two weeks after a building owner filed a notice of appeal to the Sixth Circuit U.S. Court of Appeals, the contractor responsible for the building’s renovation work followed suit and filed its own notice of appeal, seeking review of a Tennessee federal judge’s ruling and judgment entered in favor of the insurer in the dispute between the building owner, contractor and insurer over coverage for the replacement of the building’s wall that fell during renovation work.
March 04, 2024
Insurer’s Refusal To Settle For More Than Policy Limits Was Not Bad Faith, Panel Says

TAMPA, Fla. — The Second District Florida Court of Appeal granted a motion for rehearing filed by insureds and a third-party claimant in an auto coverage dispute and issued a revised opinion, reiterating its prior finding that while the trial court properly found that the auto insurer did not act in bad faith in refusing a settlement demand that was in excess of the insurance policy limits, the trial court erred in failing to properly consider applicable Florida precedent regarding other theories of bad faith alleged by the insureds and third-party claimant.
March 04, 2024
S.C. Panel Says Issue Of Fact Exists On Timeliness Of Breach Of Contract Claim

COLUMBIA, S.C. — A trial court correctly found that a bad faith claim against a homeowners insurer could not proceed because the insurer’s denial of coverage was not unreasonable; however, the trial court incorrectly found that the insured’s breach of contract claim could not proceed because a question of fact exists as to whether the breach of contract claim is timely based on the insurer’s communications with the insured about her water damage claim, the South Carolina Court of Appeals said in reversing a portion of the trial court’s ruling.
March 04, 2024
Complaint Alleges Sufficient Facts To Support Bad Faith Claim Against Auto Insurer

LOS ANGELES — A trial court erred in sustaining an auto insurer’s demurrer on an insured’s bad faith claim because the insured’s complaint alleges sufficient facts in support of a claim for bad faith against the insurer, a California appellate court said in reversing the trial court’s ruling.
March 01, 2024
Homeowners Insurer Properly Canceled Policy Pursuant To Policy Terms And Oregon Law

EUGENE, Ore. — An insured’s claims for breach of contract, bad faith and negligent performance against a homeowners insurer cannot proceed because the insurer properly canceled the insured’s homeowners policy within 60 days of the policy’s effective date and properly provided the insured with notice of the policy cancellation, an Oregon federal judge said Feb. 29 in granting the insurer’s motion for summary judgment.
February 29, 2024
U.S. Bankruptcy Judge Approves Liquidation Plan In Vesttoo Chapter 11 Cases

WILMINGTON, Del. — After the latest in a string of recent hearings, a Delaware federal bankruptcy judge on Feb. 29 confirmed a Chapter 11 plan of liquidation for Vesttoo Ltd. and its dozens of affiliates, also approving four settlements — one with a caveat and one with conditions precedent.
February 28, 2024
Settlements Sought, Liquidation Proposal Updated In Vesttoo Chapter 11 Cases

WILMINGTON, Del. — After putting forth several proposed settlements for approval in a Delaware federal bankruptcy court following mediation, the Official Committee of Unsecured Creditors on Feb. 28 filed the latest of its recent amendments to its proposed Chapter 11 plan of liquidation for Vesttoo Ltd. and dozens of Vesttoo affiliates.
February 26, 2024
4th Circuit Refuses To Rehear No Coverage, No Bad Faith Ruling

RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals denied an insured’s petition to rehear its opinion that affirmed a lower federal court’s summary judgment ruling in favor of a professional liability insurer in a breach of contract and bad faith lawsuit, standing by its holding that the insured failed to create a genuine dispute of fact about the reasonableness of the insurer’s refusal to defend her against an underlying lawsuit.
February 26, 2024
Homeowners Insurer Did Not Waive Right To Demand Appraisal, Federal Judge Says

DALLAS — A Texas federal judge granted a homeowners insurer’s motion to compel appraisal in a breach of contract and bad faith suit arising out of the insureds’ water damage claim after determining that the insurer did not waive its right to demand appraisal.
February 23, 2024
Building Owner Files Notice Of Appeal To 6th Circuit In Wall Collapse Coverage Suit

CHATTANOOGA, Tenn. — A building owner filed a notice of appeal to the Sixth Circuit U.S. Court of Appeals following a judgment entered by a Tennessee federal judge in favor of the insurer in a dispute between the building owner, contractor and insurer over coverage for the replacement of the building’s wall that fell during renovation work.
February 22, 2024
No Coverage Owed For Losses Incurred By Mandatory Evacuation, 4th Circuit Affirms

RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals affirmed a lower federal court’s summary judgment ruling in favor of a commercial property insurer in an insured’s breach of contract and bad faith lawsuit, finding that the insurer owes no coverage for the insured’s business income losses incurred as result of the mandatory evacuation of Jasper County, S.C., in preparation for Hurricane Dorian.
February 21, 2024
Magistrate Judge Grants Motion To Strike Bad Faith Claim In Water Damage Suit

SAN FRANCISCO — A California federal magistrate judge denied a business insurer’s motion to dismiss claims for promissory estoppel and unfair competition but granted the insurer’s motion to strike a bad faith claim in the insured’s complaint, which seeks coverage for water damages at the insured’s business, after determining that the bad faith claim is duplicative of the insured’s claim for breach of the implied covenant of good faith and fair dealing.
February 21, 2024
Tortfeasor’s Vehicle Is Not Underinsured Vehicle As Required By Umbrella Policy

SAN FRANCISCO — A California federal judge dismissed a breach of contract and bad faith suit filed against a personal umbrella liability insurer after determining that the insureds’ claims fail because the tortfeasor’s vehicle is not an underinsured vehicle as defined by the insureds’ primary auto policy and as required by the insureds’ personal umbrella liability policy.
February 20, 2024
Marine Transportation Company, Insurer Settle Environmental Liability Coverage Suit

TACOMA, Wash. — An insured marine transportation company seeking coverage for environmental liabilities and defense costs incurred as a result of contamination allegedly caused by the insured’s operations settled its breach of contract and bad faith suit with its insurer, according to a notice of settlement filed by the parties in Washington federal court.
February 20, 2024
Insured Cannot Present Evidence On Request For Future Policy Benefits

RIVERSIDE, Calif. — An insured is not permitted to present evidence in an environmental contamination coverage suit concerning its request for future insurance policy benefits that the insured seeks as damages for an insurer’s alleged bad faith conduct because the request for future policy benefits was not timely filed, a California federal judge said in granting the insurer’s motion in limine.
February 16, 2024
Auto Coverage Dispute To Remain In Federal Court, Judge Says

SPOKANE, Wash. — A Washington federal judge denied an insured’s motion to remand an auto coverage dispute to state court after determining that the auto insurer successfully established that the federal jurisdictional amount-in-controversy requirement of $75,000 has been met.
February 16, 2024
No Dispute Exists As To Who Is Sole Beneficiary Under Life Insurance Policy

PHILADELPHIA — A Pennsylvania federal judge granted a life insurer’s motion for summary judgment, agreeing with the insurer that an administrative error caused confusion regarding the correct beneficiary under a life insurance policy and finding that bad faith claims alleged against the insurer cannot proceed because two of the claimants do not have standing to assert a bad faith claim and the third claimant, found to be the correct beneficiary under the policy, failed to show that the insurer acted with a dishonest purpose in handling the claim for death benefits.
February 15, 2024
Bad Faith Claim Stemming From Vandalism Coverage Dispute Fails, Judge Says

PHILADELPHIA — An insured’s bad faith claim cannot proceed because he failed to provide specific details regarding how the insurer acted in bad faith in handling his claim for vandalism damages at a rental property owned by the insured, a Pennsylvania federal judge said in granting the homeowners insurer’s motion to dismiss.
February 15, 2024
Disputes Over Liquidation Proposal Sent To Mediation In Vesttoo Chapter 11 Cases

WILMINGTON, Del. — A Delaware federal bankruptcy judge has referred matters pertaining to a proposed Chapter 11 plan of liquidation for Vesttoo Ltd. and dozens of its affiliates to mediation.