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

Mealey's Insurance Bad Faith

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.
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.