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

Mealey's Insurance Bad Faith

September 29, 2023
Rhode Island Federal Judge Says Bifurcation Of Bad Faith Claims Is Appropriate

PROVIDENCE, R.I. — A Rhode Island federal judge granted a homeowners insurer’s motion to bifurcate bad faith claims from a breach of contract claim alleged against the insurer by an insured seeking coverage for water damages after determining that the case will benefit if the bad faith claims are bifurcated.
September 29, 2023
Insureds Failed To Show Auto Insurer’s Handling Of Claim Was Bad Faith, Judge Says

PHILADELPHIA — A bad faith claim against an auto insurer cannot proceed because the insureds failed to show that the insurer acted unreasonably and had no reasonable basis for delaying payment of the insureds’ claim for underinsured motorist (UIM) benefits, a Pennsylvania federal judge said in granting the insurer’s motion for summary judgment.
September 28, 2023
Insurer’s Motion To Dismiss Homeowners’ Bad Faith Claim Denied In Federal Court

PITTSBURGH — A federal judge in Pennsylvania denied a homeowners insurer’s motion to dismiss a bad faith claim, ruling that two homeowners adequately supported the claim by alleging that the insurer knew that one of the homeowners was disabled and did not advise him that his policy covered additional living expenses even though the insurer was informed that the disabled homeowner did not have access to a bathroom as a result of damage caused by a broken water line.
September 28, 2023
Fact Issues In Auto Coverage Suit Preclude Judgment For Insurer, Panel Says

ALBUQUERQUE, N.M. — An auto insurer was not entitled to judgment in its favor as a matter of law because disputed issues of fact exist as to whether the insurer acted reasonably in handling an insured’s claim for benefits and whether the insurer waived the policy’s consent-to-settle provision after receiving the insured’s notice of a proposed settlement with a third-party tortfeasor, the New Mexico Court of Appeals said.
September 27, 2023
Music Festival Organizer Seeks $2.8M For Losses Arising From Tuscany Storm

PHILADELPHIA — An insured that organized a three-day music festival in Tuscany sued its insurer for breach of contract, declaratory relief and bad faith in a Pennsylvania federal court, seeking coverage under an Event Cancellation Policy for its alleged $2.8 million in losses caused by severe weather.
September 27, 2023
Judge Grants Motion To File Amended Complaint In Hurricane Ida Coverage Row

NEW ORLEANS — A Louisiana federal judge granted homeowners’ motion to file an amended complaint and add the Louisiana Insurance Guaranty Association (LIGA) as a defendant in their breach of contract and bad faith suit against their now-insolvent insurer over its failure to cover purported damages caused by Hurricane Ida, finding no evidence that the motion to amend is “to defeat federal jurisdiction” and that because diversity jurisdiction no longer exists, the case must be remanded to state court.
September 26, 2023
Insurer: Ruling ‘Sharply Conflicts’ With Dupree, Warrants High Court Review

WASHINGTON, D.C. — An insurer asked the U.S. Supreme Court to review the 11th Circuit U.S. Court of Appeals’ finding that there is enough evidence for a jury to reasonably conclude that it acted in bad faith because it delayed acting on its duty to investigate and settle the underlying worker injury claim, asserting that the appeals court’s holding “sharply conflicts” with the high court’s recent ruling in Dupree v. Younger and warrants grant of its petition for writ of certiorari, vacatur of the lower court’s judgment and remand for further consideration.
September 26, 2023
Trial Court Erred In Granting Judgment For Insurer In Water Damage Suit

WAUKESHA, Wis. — The Second District Wisconsin Court of Appeals determined that a trial court erred in granting a homeowners insurer’s motion for judgment on the pleadings in a water damage coverage dispute because the insureds’ complaint does not allege that the water damage was caused by subsurface water, an excluded cause of loss, but by a sewer or drain backup, a covered cause of loss under the policy.
September 25, 2023
Questions Of Fact Exist Regarding When Insureds Knew Of Water Leak Problems

SANTA ANA, Calif. — A California federal judge denied a property insurer’s motion for summary judgment on breach of contract and bad faith claims after determining that questions of fact exist regarding when the insureds became aware of a water leak problem within a hotel they purchased and whether the insurer acted reasonably in handling the insureds’ claim for coverage.
September 19, 2023
Dismissal Granted In Multiple Hurricane Damage Suit Against Insolvent Insurer

LAKE CHARLES, La. — A Louisiana federal judge dismissed a homeowner’s breach of contract suit against a now-insolvent insurer over its failure to compensate for damages caused by two hurricanes, finding that the magistrate judge correctly determined in a report and recommendation that because the homeowner amended her complaint to add the Louisiana Insurance Guaranty Association (LIGA) as a defendant, the court lacks subject matter jurisdiction.
September 19, 2023
Insurers Cross-Appeal In Coverage Dispute With Home Depot Over 2014 Data Breach

CINCINNATI — Insurers filed cross-appeal notices in an Ohio federal court two weeks and one day after their mutual insured, Home Depot, appealed to the Sixth Circuit U.S. Court of Appeals the lower court’s finding that an insurance policy’s electronic data exclusion bars coverage for the retailer’s losses stemming from a 2014 data breach (The Home Depot, Inc., et al. v. Steadfast Insurance Co., et al., No. 21-00242, S.D. Ohio, Western Div.).
September 19, 2023
Remand To Florida Court Argued In Coverage Row Over Leased Aircraft

MIAMI — Arguing in a reply brief that “in lawsuits between parties of different countries, there is no federal diversity jurisdiction,” plaintiffs in a coverage dispute over aircraft that a Russian airline refused to return after the invasion of Ukraine urge a Florida federal court to remand the case to Florida state court.
September 18, 2023
Insurer Did Not Act In Bad Faith In Refusing To Settle For More Than Policy Limits

TAMPA, Fla. — A trial court properly found that an auto insurer did not act in bad faith in refusing a settlement demand that was in excess of the insurance policy limits; however, the trial court erred in failing to properly consider applicable Florida precedent regarding the other theories of bad faith alleged by the insureds and third-party claimant, the Second District Florida Court of Appeal said.
September 18, 2023
Insured Sufficiently Alleged Insurer Was A Party To Commercial Property Policy

FRESNO, Calif. — A California federal judge denied a motion to dismiss filed by two insurers after determining that an insured’s breach of contract, bad faith and unfair business practices claims can proceed against one of the insurers because the insured nursing home sufficiently alleged that the insurer was a party to a commercial property insurance policy.
September 18, 2023
Insurer Acted Reasonably In Enclosing Release With Tender Of Bodily Injury Limits

HELENA, Mont. — A Montana federal magistrate judge granted an auto insurer’s motion for summary judgment after determining that claims alleging violations of Montana’s Unfair Trade Practices Act (UTPA) and bad faith cannot proceed because the insurer acted reasonably by enclosing an optional release when it tendered its insured’s bodily injury limits to the claimants following a motorcycle accident for which its insured was liable.
September 18, 2023
Unfair Trade Practices, Bad Faith Claims Against Auto Insurer Dismissed

PHILADELPHIA — Claims for violation of Pennsylvania’s Unfair Trade Practices and Consumer Protection Law (UTPCPL) and bad faith against an auto insurer cannot proceed because the insureds failed to allege sufficient facts in support of the claims, a Pennsylvania federal magistrate judge said in granting the auto insurer’s motion to dismiss.
September 15, 2023
Motion To Add Guaranty Association Granted, Case Remanded In Hurricane Ida Suit

NEW ORLEANS — A Louisiana federal judge granted insured homeowners’ motion to file a supplemental complaint to add the Louisiana Insurance Guaranty Association (LIGA) as a defendant in a Hurricane Ida coverage suit against their now-insolvent insurer, finding a lack of evidence that the homeowners sought to amend their complaint to defeat diversity jurisdiction but that because it is defeated by adding LIGA, the case must be remanded to state court.
September 14, 2023
Triable Issues Exist As To Reasonableness Of Auto Insurer’s Claims Handling

SEATTLE — An auto insurer is not entitled to summary judgment on an insured’s extracontractual claims because the insured raised triable issues of fact as to whether the auto insurer’s investigation and claims handling was reasonable, a Washington federal judge said in partially denying the auto insurer’s motion for summary judgment.
September 13, 2023
Judge Dismisses Elder Abuse Suit Against LTC Insurer, Cites Inadequate Pleading

SAN FRANCISCO — A California federal judge dismissed a breach of contract and elder abuse suit filed against a couple’s long-term care (LTC) insurer for its failure to cover the wife’s claim for benefits, finding that though the amended complaint contains “a bundle of allegations that might constitute plausible causes of action with some additional facts,” the amended complaint does not currently suffice to “allow this case to proceed.”
September 12, 2023
Judge Remands Bad Faith Homeowners Insurance Suit Against Insolvent Insurer

BATON ROUGE, La. — A Louisiana federal judge remanded to state court a bad faith homeowners insurance coverage suit over purported water damage from a plumbing leak, finding that remand is appropriate for lack of subject matter jurisdiction due to the Louisiana Insurance Guaranty Association (LIGA) being added as a defendant after the insurer was placed into liquidation.
September 08, 2023
Home Depot Seeks 6th Circuit Review Of No Coverage Ruling For 2014 Data Breach Losses

CINCINNATI — Home Depot filed a notice of appeal in an Ohio federal court asking the Sixth Circuit U.S. Court of Appeals to review the lower court’s finding that an insurance policy’s electronic data exclusion bars coverage for the retailer’s losses stemming from a 2014 data breach, challenging the lower court’s grant of the insurers’ motions for summary judgment in its breach of contract and bad faith lawsuit seeking damages up to the full collective policy limits of $50 million.
September 08, 2023
Builders Risk Insurer’s JMOL, New Trial Motions Denied; $7.62M Judgment Entered

DENVER — A federal judge in Colorado denied a builders risk insurer’s renewed motion for judgment as a matter of law (JMOL) and motion for a new trial following a jury’s award of $2.54 million in breach of contract damages to its condominium developer insured, rejecting the insurer’s arguments that the developer failed to prove that it suffered “resulting loss” damages and that the jury rendered an inconsistent verdict.
August 31, 2023
Insurance Expert Is Admissible But Cautioned On Limits Of Testimony By Judge

PHILADELPHIA — A federal judge in Pennsylvania denied a motion to exclude an expert on insurance industry standards in a bad faith dispute but ruled that the expert is barred from offering impermissible legal conclusions.
August 31, 2023
Rehearing Denied After 9th Circuit Vacates Medical Payment Class Case Ruling

PORTLAND, Ore. — The Ninth Circuit U.S. Court of Appeals denied a petition for rehearing en banc filed by an insurer accused in a putative class action of bad faith and other violations related to delayed medical payments following vehicle accidents after a panel vacated a summary judgment ruling and directed the trial court to first determine whether it has jurisdiction under the Class Action Fairness Act (CAFA).
August 31, 2023
Condo Owner Is Not Insured; Breach Of Contract, Bad Faith Claims Properly Dismissed

WAUKESHA, Wis. — A condominium owner’s breach of contract and bad faith claims against the condominium association’s insurer were properly dismissed by a trial court because the condominium owner is not an insured or a third-party beneficiary under the policy at issue, the Second District Wisconsin Court of Appeals said in affirming a trial court’s ruling.