Mealey's Insurance Bad Faith
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November 15, 2023
Judge Denies Dismissal In Hurricane Coverage Suit, Says Substitution Has No Impact
LAKE CHARLES, La. — A Louisiana federal judge denied dismissal of a homeowners’ bad faith suit against their now-insolvent homeowners insurer for purportedly failing to adequately compensate them for damages caused by Hurricane Laura, finding that substituting the Louisiana Insurance Guaranty Association (LIGA) does not impact the court’s subject matter jurisdiction.
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November 14, 2023
No Coverage For Damages To Insured’s Dock Caused By Water, Structural Defects
SPOKANE, Wash. — A Washington federal judge on Nov. 13 granted summary judgment in favor of a homeowners insurer after determining that the insured’s claims for breach of contract and bad faith cannot proceed because the insurer’s denial of coverage for damage to a dock on the insured’s property was reasonable as the damage was caused by water and structural defects, excluded causes of losses, rather than wind.
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November 14, 2023
Conversion Bid Denied, Exclusivity Terminated In Vesttoo Bankruptcy Cases
WILMINGTON, Del. — A Delaware federal bankruptcy judge has denied without prejudice a U.S. trustee’s motion to convert the jointly administered Chapter 11 cases of Vesttoo Ltd. and 48 affiliates to Chapter 7 cases.
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November 13, 2023
Insured Condo Association Says Coverage Owed For Hidden Water Damage
SEATTLE — A property insurer’s denial of coverage for hidden water damage discovered in the buildings of a condominium development constitutes a breach of contract and bad faith because coverage is afforded under the policies at issue, an insured condominium association says in a complaint filed in Washington federal court.
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November 13, 2023
Reserve Information In COVID-19 Coverage Suit Not Relevant To Bad Faith Claim
SANTA ANA, Calif. — A California federal magistrate judge denied an insured’s motion to compel documents related to the reserve set by an insurer in response to the insured’s claim for business losses sustained in the wake of the COVID-19 pandemic after determining that the reserve information is not relevant to the insured’s bad faith claim because only a nominal reserve was set by the insurer and no changes were made to the reserve since the coverage claim was filed.
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November 09, 2023
Insured’s Disability Income Suit Barred By Policy’s Suit Limitations Provision
ATLANTA — A suit against a disability income insurer is barred by the policy’s three-year suit limitations provision because the insured failed to file the breach of contract and bad faith suit within three years of his claim for benefits being denied, the 11th Circuit U.S. Court of Appeals said in affirming a district court’s ruling.
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November 09, 2023
Bad Faith Claim In Disability Suit Cannot Proceed, Judge Says
SAN DIEGO — A bad faith claim alleged against a disability insurer cannot proceed because the insured failed to show that the insurer acted unreasonably and because the insurer showed that a genuine issue of fact existed on the cause of the insured’s disability, a California federal judge said in partly granting the disability insurer’s motion for summary judgment.
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November 08, 2023
Debtors In Vesttoo Bankruptcy Cases Note Agreement With Unsecured Creditors
WILMINGTON, Del. — In a Nov. 7 objection to conversion to Chapter 7, Chapter 11 debtors Vesttoo Ltd. and 48 affiliates tell a Delaware federal bankruptcy court that they hope to close on a sale of assets “around December 1” and “if such a sale is not possible or cannot come together in that time frame . . . will have worked with [the Official Committee of Unsecured Creditors] toward a singular liquidating plan.”
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November 07, 2023
Judgment Granted To Nationwide In Truck Theft Row Over Insured’s Misrepresentation
SCRANTON, Pa. — A Pennsylvania federal judge granted summary judgment to Nationwide in a breach of contract and bad faith suit over Nationwide’s failure to cover an auto insurance claim when its insured’s truck was purportedly stolen and burned, finding that because the insured failed to show that “Nationwide lacked a reasonable basis in denying his claim” due to the insured’s purported material misrepresentations, summary judgment is appropriate.
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November 07, 2023
Discovery Will Start In Crop Insurance Row Despite Regulators’ Stay Bid
GRAND RAPIDS, Mich. — Without explanation, a Michigan federal judge denied a motion to stay discovery as to the U.S. Department of Agriculture (USDA) and the Federal Crop Insurance Corp. (FCIC) until resolution of their dismissal bid in a suit over crop insurance claims that the plaintiffs say have not been adjusted in more than three years.
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November 06, 2023
Insured Municipality Files Suit, Says Coverage Owed For Remediation Costs
TRENTON, N.J. — A premises pollution liability insurer breached its contract and acted in bad faith by denying coverage for environmental contamination remediation costs incurred by an insured municipality because the policy obligates the insurer to provide coverage for the remediation costs, the insured says in a complaint filed in New Jersey state court.
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November 06, 2023
Breach Of Contract, Bad Faith Suit Against Rental Insurer Must Be Remanded
LAS VEGAS — A Nevada federal judge granted a motion to remand filed by insureds in a breach of contract and bad faith suit over coverage owed under a rental dwelling policy after determining that the insurer failed to meet its burden of showing that the federal jurisdictional amount-in-controversy requirement of $75,000 has been met.
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November 06, 2023
No Evidence That Homeowners Insurer’s Investigation Was Unreasonable, Judge Says
HOUSTON — A breach of contract claim against a homeowners insurer can proceed in a dispute over coverage for storm-related damages; however, a claim for violations of the Texas Insurance Code cannot proceed because the insured failed to show that the insurer’s investigation was unreasonable or that the insurer acted in bad faith in handling her claim, a Texas federal judge said in partially granting the insurer’s motion for summary judgment.
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November 03, 2023
Ohio High Court Majority Affirms Choice-Of-Law Analysis For Bad Faith Claim
COLUMBUS, Ohio — An Ohio appellate court applied the correct factors in a choice-of-law analysis for a bad faith claim in an environmental contamination coverage suit because the bad faith claim sounds in tort rather than contract, the majority of the Ohio Supreme Court said in affirming the appellate court’s ruling.
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November 03, 2023
Questions Of Fact Exist On Reasonableness Of Auto Insurer’s Claims Handling
SEATTLE — An insured’s extracontractual claims against an auto insurer can proceed because questions of fact exist as to whether the auto insurer’s handling of the insured’s claim and settlement offer to the insured were reasonable, a Washington federal judge Nov. 2 said in denying the insurer’s motion for partial summary judgment on the extracontractual claims.
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November 03, 2023
Breach Of Contract, Bad Faith Suit Will Remain In Louisiana Federal Court
NEW ORLEANS — An insured’s breach of contract and bad faith suit arising out of a hurricane damage coverage dispute will remain in federal court because the property insurer met its burden of showing that the federal jurisdictional amount in controversy requirement has been exceeded, a Louisiana federal judge said in denying the insured’s motion to remand to state court.
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November 03, 2023
Bad Faith Claim Against Homeowners Insurer In Fire Damage Suit To Proceed
PHILADELPHIA — Insureds’ bad faith claim against their homeowners insurer can proceed because the insureds sufficiently allege facts to support their allegation that the insurer acted in bad faith in handling their claim for damages caused by a fire in their home.
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November 03, 2023
Common-Law Bad Faith, Statutory Bad Faith Claims Dismissed In Auto Suit
PHILADELPHIA — A Pennsylvania federal judge granted an auto insurer’s motion to dismiss claims for common-law bad faith, statutory bad faith and violation of Pennsylvania’s unfair trade practices law in an auto coverage dispute because the common-law bad faith claim is barred by res judicata and because the complaint does not allege facts in support of a statutory bad faith claim or an unfair trade practices claim.
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November 03, 2023
Insured’s Suit Seeking Coverage For Hurricane Damages Cannot Survive, Judge Says
LAKE CHARLES, La. — A Louisiana federal judge dismissed an insured’s suit against her homeowners insurer after determining that the breach of contract claim cannot survive based on the policy’s 24-month suit limitations provisions and that the bad faith and negligent infliction of emotional distress claims cannot survive because the insured failed to provide any support for the claims.
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October 31, 2023
Conversion To Chapter 7 Sought For Vesttoo Bankruptcy Cases By U.S. Trustee
WILMINGTON, Del. — A Delaware federal bankruptcy judge on Oct. 30 set a Nov. 8 hearing on a motion to convert the jointly administered Chapter 11 cases of Vesttoo Ltd. and 48 affiliates to Chapter 7 cases.
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October 30, 2023
California Appeals Panel Affirms Ruling For Insurer In Water Damage Suit
LOS ANGELES — The Second District California Court of Appeal affirmed a trial court’s summary judgment ruling in favor of an insurer in a bad faith coverage dispute over water damage caused by a sewer line backup after determining that the insured forfeited its argument that coverage is provided for the water damage by not raising the issue in the trial court.
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October 26, 2023
Policy’s Business Income Coverage Language Is Ambiguous, Federal Judge Rules
LOS ANGELES — A California federal judge partly denied a commercial property insurer’s motion for summary judgment in a breach of contract lawsuit arising from a now defunct restaurant’s suspension of operations, finding that the policy’s business income coverage language is ambiguous.
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October 25, 2023
Insurer, Subcontractor Agree To Dismiss 9th Circuit Appeal Over $2.5M Award
SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals has ordered the dismissal of an insurer’s appeal of a lower court’s 2021 ruling granting its subcontractor insured summary judgment on breach of contract and bad faith claims and awarding it $2.5 million, granting the parties’ stipulated motion for voluntary dismissal.
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October 24, 2023
Verdict On Bad Faith, Unfair Practices Claims Supported By Substantial Evidence
PASADENA, Calif. — Substantial evidence supports a jury verdict on claims for bad faith and unfair insurance practices, the Ninth Circuit U.S. Court of Appeals said Oct. 23 in affirming a more than $5.7 million judgment entered in favor of an insured and against an auto insurer.
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October 24, 2023
Judge Dismisses Punitive Damages Claim Despite Allegedly Egregious Breach
CENTRAL ISLIP, N.Y. — A federal judge in New York partly granted an insurer’s motion to dismiss two homeowners’ claims, dismissing only a claim for punitive damages on the grounds that the homeowners failed to adequately allege that when the insurer breached the covenant of good faith and fair dealing by underpaying covered plumbing damages, it was part of a pattern of harming the public.