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

Mealey's Insurance Bad Faith

February 14, 2024
Insured’s Damages Covered Under Power Interruption Provision, Judge Says

SAN JOSE, Calif. — A homeowner is entitled to coverage under a policy’s power interruption provision for damages caused to her home because it is clear from the provision’s terms that it provides coverage for the damages caused to the insured’s home by the loss of power to the home’s thermostat, a California federal judge said in granting the insured’s motion for summary judgment and in denying the insurer’s motion for summary judgment on the insured’s bad faith and unfair competition law claims.
February 13, 2024
Bad Faith, Loss Of Consortium Claims Dismissed Without Prejudice Against Insurer

PHILADELPHIA — A Pennsylvania federal judge on Feb. 12 dismissed without prejudice an insured’s bad faith claim against an auto insurer after determining that the insured failed to include sufficient facts in support of the claim and his wife’s loss of consortium claim after determining that it is unclear whether the wife is named as an insured on the policy.
February 13, 2024
Issue Of Fact Exists On Whether Car Dealership, Insurer Agreed To Settle Claim

DENVER — The 10th Circuit U.S. Court of Appeals reversed and remanded a district court’s ruling on breach of contract and bad faith claims entered in favor of insurer in a coverage dispute over vehicles damaged by hail after determining that the insured dealership raised a genuine issue of fact on the issue of whether the parties agreed to settle the claim based on an estimate prepared at the request of the insurer.
February 13, 2024
9th Circuit Panel Says No Coverage Due For $1M Judgment Entered Against Insured

PASADENA, Calif. — A district court correctly found that no coverage is owed to an insured for a $1 million arbitration judgment because the employment practices liability insurance policy excluded coverage for deliberate fraudulent acts when any final adjudication establishes that a deliberate fraudulent act was committed by the insured, the Ninth Circuit U.S. Court of Appeals said in also finding that the insured’s claims for breach of contract and bad faith fail.
February 12, 2024
Insureds File Suit, Seek Coverage For Costs Incurred To Remediate Riverbank

SAN FRANCISCO — Insureds filed suit against their umbrella liability insurer in California federal court, alleging that the insurer breached its contract and acted in bad faith by relying on the policy’s pollution exclusion to deny coverage for costs incurred in remediating a riverbank.
February 12, 2024
11th Circuit Schedules Oral Arguments In Mold Coverage, Bad Faith Suit

ATLANTA — The 11th Circuit U.S. Court of Appeals scheduled oral arguments for April 16 in a mold coverage suit involving an insured’s appeal of a district court’s ruling on breach of contract and bad faith claims and an insurer’s cross-appeal of the district court’s ruling on fraud and conspiracy counterclaims asserted by the insurer.
February 12, 2024
Denial Of Coverage For Fire Caused By Vandalism Is Excluded, Federal Judge Says

GREENVILLE, Miss. — An insured’s breach of contract and bad faith claims against an insurer cannot proceed because no coverage is afforded for a fire caused by vandalism in a property that was vacant for more than 90 days, a Mississippi federal judge said in finding that the insurer had a reasonable basis for denying coverage.
February 09, 2024
Bad Faith, Breach Of Contract Claims Against Auto Insurer Fail, 9th Circuit Affirms

PASADENA, Calif. — A district court correctly determined that bad faith and breach of contract claims against a business auto insurer could not proceed because a genuine dispute over coverage existed and the insurer paid the amount owed under the policy shortly after an arbitration award in favor of the insured was confirmed, the Ninth Circuit U.S. Court of Appeals concluded in a Feb. 8 unpublished opinion.
February 07, 2024
Breach Of Contract, Bad Faith Claims Based On Contractor Referral Fail

PHILADELPHIA — Breach of contract and bad faith claims alleged against a homeowners insurer based on the insurer’s referral of a contractor that did not fully complete the insureds’ repair work must be dismissed without prejudice because the insureds failed to allege sufficient facts in support of the claims, a Pennsylvania federal judge said Feb. 6.
February 07, 2024
Disability Claimant Says Insurer Fails To Show Policy Rider Is Clear, Unambiguous

SAN FRANCISCO — A disability insurer fails to show that a rider included in its disability income policy is not ambiguous and should be enforced, a disability claimant says, maintaining in his appellant reply brief filed in the Ninth Circuit U.S. Court of Appeals that a district court incorrectly interpreted the policy’s monthly benefit rider.
February 06, 2024
Hail Damage Suit Against Guaranty Association Tossed For Lack Of Jurisdiction

BATON ROUGE, La. — A Louisiana federal judge dismissed a breach of contract and bad faith suit regarding failure to compensate a homeowner for hailstorm damage against a now-insolvent insurer and the Louisiana Insurance Guaranty Association (LIGA), finding that the court lacks subject matter jurisdiction because both LIGA and the homeowner are citizens of Louisiana.
February 06, 2024
Bank’s Claim ‘Insurable’ As A Matter Of Ohio Law, 6th Circuit Rules In Reversal

CINCINNATI — The Sixth Circuit U.S. Court of Appeals reversed a lower federal court’s summary judgment ruling in favor of professional liability insurers in a bank insured’s breach of contract and bad faith lawsuit, finding that the bank’s underlying settlement payment to a bankruptcy trustee is “insurable” pursuant to Ohio law and that an ambiguous exclusion should be construed in the insured’s favor.
February 05, 2024
Insured Cannot Recover Attorney Fees, Texas High Court Says In Answering Question

AUSTIN, Texas —The Texas Supreme Court on Feb. 2 answered “yes” to a certified question from the Fifth Circuit U.S. Court of Appeals in an insured’s lawsuit alleging that its insurer violated the Texas Prompt Payment of Claims Act (TPPCA), concluding that the TPPCA prohibits the insured from recovering attorney fees because the insurer voluntarily paid the full appraisal award for the insured’s tornado damage plus any statutory interest.
February 05, 2024
Judge: No Coverage Owed For Unfair Competition Suit Brought Against Insured

SAN DIEGO — A federal judge in California concluded that an insurer has no duty to defend its furniture delivery company insured against an underlying misappropriation of trade secrets and unfair competition lawsuit brought by a competitor, granting the insurer’s motion for summary judgment in the insured’s breach of contract and bad faith lawsuit.
February 05, 2024
Federal Judge Says Insurer Had ‘Reasonable Basis’ For Not Paying Appraisal Award

LAS VEGAS — A Nevada federal judge granted an insurer’s motion for summary judgment on a bad faith claim after determining that the insurer offered evidence showing that it had a “reasonable basis” for not paying an appraisal award.
February 02, 2024
Judge Says Prompt Payment Claim Cannot Be Resolved Until Coverage Is Resolved

FORT WORTH, Texas — A Texas federal judge on Feb. 1 partially adopted a magistrate judge’s findings, conclusions and recommendations (FCR) after determining that a homeowners insurer is entitled to summary judgment on all but one extracontractual claim alleged against the insurer because the insured’s claim for violation of the Texas Prompt Payment Claims Act (TPPCA) is dependent on resolution of the coverage issue.
February 02, 2024
Bad Faith, Insurance Code Violation Claims To Proceed Against Homeowners Insurer

MARSHALL, Texas — An insured’s claims for bad faith and violation of the Texas Insurance Code will proceed to trial because questions of fact exist regarding the cause of a fire at the insured’s home and whether the homeowners insurer investigated the claim with the pretext of denying coverage on the basis that the fire was intentionally set by the insured, a Texas federal magistrate judge said in denying the insurer’s motion for summary judgment.
February 02, 2024
Questions Of Fact Exist On Breach Of Contract Claim In Fire Coverage Suit

TOLEDO, Ohio — An insured’s breach of contract claim against a homeowners insurer in a fire coverage dispute will proceed because questions of fact exist regarding the materiality of an insured’s alleged misrepresentations and regarding the insurer’s affirmative defense of arson; however, the insured’s bad faith claim cannot proceed because the insurer’s denial of coverage was not unreasonable, an Ohio federal judge said in partially granting the insurer’s motion for summary judgment.
February 01, 2024
Breach Of Contract, Bad Faith Claims In Hurricane Damages Suit Fail, Judge Says

NEW ORLEANS — A Louisiana federal judge granted a homeowners insurer’s motion to dismiss an insured’s breach of contract and bad faith claims without prejudice to amend the complaint after determining that the insured fails to allege sufficient facts in support of the claims stemming from the insurer’s adjustment of a hurricane damages claim.
February 01, 2024
Airline And Insurer Agree To Dismiss UCL, Bad Faith Suit Over Passenger’s Coma

SAN FRANCISCO — A California federal judge on Jan. 31 entered an order of dismissal after an airline and two insurers entered a joint stipulation requesting dismissal of the airline’s suit accusing one insurer of violating California’s unfair competition law (UCL) and bad faith based on an allegedly improper denial of coverage for a separate lawsuit brought against the airline by the family of a quadriplegic man who fell into a coma while traveling, which recently settled for $30 million.
February 01, 2024
Federal Judge Tosses Hurricane Coverage Case After Suspending Homeowner’s Counsel

LAFAYETTE, La. — A Louisiana federal judge adopted a magistrate judge’s report and recommendation to dismiss for failure to prosecute after a homeowner failed to attend a status conference in her hurricane coverage suit against her now-insolvent insurer following the judge’s termination of her legal counsel.
February 01, 2024
Breach Of Contract, Bad Faith Counterclaims Must Be Dismissed, Judge Says

CHICAGO — An insured’s counterclaims for breach of contract and bad faith cannot proceed against a commercial property insurer because the breach of contract claim is duplicative of the insurer’s declaratory judgment claim and because the bad faith claim fails to state any facts in support of the insured’s allegation that the insurer acted unreasonably in handling the insured’s claim for property damages.
February 01, 2024
Late Objection Bid Draws Opposition In Vesttoo Chapter 11 Cases

WILMINGTON, Del. — Asserting that “Vesttoo’s defrauded creditors have overwhelmingly voted to accept” a Chapter 11 plan of liquidation for Vesttoo Ltd. and dozens of its affiliates, two creditors are among the entities urging a Delaware federal bankruptcy court to reject a motion to allow an untimely objection to claims against one of the affiliates.
January 31, 2024
Wall’s Structural Instability Caused By Deterioration, Not Collapse, Judge Says

CHATTANOOGA, Tenn. — No coverage is owed for the replacement of an entire wall of a building undergoing renovations because the cause of the structural instability of the wall was deterioration and not the collapse of a limited number of bricks from the wall during the construction work, a Tennessee federal judge said Jan. 30 in entering judgment in favor of the insurer.
January 31, 2024
Extracontractual Claims Against Insurer Dismissed For Failure To State Claim

HOUSTON — A Texas federal judge dismissed an insured’s extracontractual claims alleged against an insurer in a property damage coverage dispute after determining that the insured failed to provide sufficient facts to support allegations that the insurer acted in bad faith and violated Texas law in its adjustment and handling of her property damage claim.