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Preview: LexisNexis® Mealey's™ Insurance Bad Faith Legal News

LexisNexis® Mealey's™ Insurance Bad Faith Legal News



Headline Insurance Bad Faith Legal News from LexisNexis®



 



Genuine Issues Of Fact Exist Precluding Dismissal In Bad Faith Suit, Judge Rules
SEATTLE - Dismissal of an insured's bad faith claim against his insurer for failure to timely settle his claim for underinsured motorist coverage is not warranted because genuine issues of material fact exist as to whether the insurer did not properly consider whether the insured's internal bleeding was related to the accident, a federal judge in Washington ruled May 26 in granting in part and denying in part the insurer's motion for partial summary judgment (Christopher Heide v. State Farm Mutual Automobile Insurance Co., No. 16-652, W.D. Wash., 2017 U.S. Dist. LEXIS 81341).



Arizona's Survival Statute Precludes Recovery For Emotional Distress Damages
PHOENIX - An Arizona federal judge on May 25 partially granted an insurer's motion for summary judgment after determining that Arizona's survival statute precludes the personal representative of an insured's estate from recovering damages for the insured's alleged emotional distress damages caused by injuries sustained in an automobile accident (Edward B. Kile, et al. v. USAA Casualty Insurance Co., No. 15-380, D. Ariz., 2017 U.S. Dist. LEXIS 81239).



Insured Failed To Prove Carrier Acted In Bad Faith In Handling Of UIM Claim
SEATTLE - A Washington federal judge on June 6 granted an insurer's motion for summary judgment after determining that an insured seeking underinsured motorist (UIM) benefits failed to prove that the insurer acted in bad faith by delaying its handling and investigation of the insured's claim (Eileen Hanson v. State Farm Mutual Automobile Insurance Co., No. 16-0568, W.D. Wash., 2017 U.S. Dist. LEXIS 86708).



Panel Reverses Judgment In Favor Of Insolvent Insurer On Personal Injury Claim
BATON ROUGE, La. - A Louisiana appeals panel on June 2 reversed a judgment entered in favor of an insolvent insurer on a personal injury claim arising out of a vehicle accident involving an insured and his father; however, the panel affirmed judgment on the involuntary dismissal of property damage and bad faith claims (John Cook and Jason J. Scott v. U.S. Agencies Mgt. Services, et al., No. 2016 CA 0802, La. App., 1st Cir., 2017 La. App. Unpub. LEXIS 182).



Iowa High Court Reverses $25M Punitive Damages Verdict In Bad Faith Suit
DES MOINES, Iowa - The Iowa Supreme Court on May 19 reversed a jury's $25 million punitive damages award entered in favor of an insured after determining that a trial court erred in ruling on motions for summary judgment that a workers' compensation insurer acted in bad faith by contesting the insured's request for a lump-sum settlement of a workers' compensation claim (Toby Thornton v. American Interstate Insurance Co., No. 15-1032, Iowa Sup., 2017 Iowa Sup. LEXIS 52).



Insurer's Delay In Policy Payment Not In Bad Faith, Judge Rules
SCRANTON, Pa. - Insureds have failed to show that an insurer acted in bad faith in failing to pay for coverage for personal property loss under a homeowners insurance policy because any delay in payment was a result of the insureds' failure to provide the insurer with the necessary personal property inventory until 18 months after the loss, a federal judge in Pennsylvania ruled in granting the insurer's summary judgment motion on May 30 (Ronald Turner, et al. v. State Farm Fire & Casualty Co., No. 15-906, M.D. Pa., 2017 U.S. Dist. LEXIS 81922).



Insurance Adjuster Not Properly Joined In Bad Faith Suit, Judge Rules
DALLAS - Remand of an insurance breach of contract and bad faith lawsuit is not proper because an insurance adjuster was improperly joined in the litigation, a federal judge in Texas ruled June 1 (Jesus Gutierrez v. Allstate Fire and Casualty Insurance Co., et al., No. 17-0636, N.D. Texas, 2017 U.S. Dist. LEXIS 84253).



Louisiana Panel Lowers Statutory Penalties Award, Vacates Attorney Fees Award
GRETNA, La. - A Louisiana appeals panel on May 31 decreased a lower court's award of bad faith penalties against an insurer from $32,162.46 to $8,040.61 in a Hurricane Isaac coverage dispute and vacated the lower court's $12,864.98 attorney fees award in favor of the insured (Mary Williams v. Security Plan Fire Insurance Co., No. 16-CA-714, La. App., 5th Cir., 2017 La. App. LEXIS 1004).



Insurer Owed No Duty To Defend Insured, Judge Rules In Bad Faith Suit
TAMPA, Fla. - An insurer had no duty to defend or indemnify its insured in a false advertising lawsuit because the insured failed to tender the complaint to the insurer as required, a federal judge in Florida ruled May 26 in granting the insurer's motion for partial summary judgment in an insurance bad faith and breach of contract lawsuit (Scott, Blane and Darren Recovery LLC, et al. v. Auto-Owners Insurance Co., No. 15-153, M.D. Fla., 2017 U.S. Dist. LEXIS 81042).



Production Company Owed No Further Defense For Suits Over Fatal Train Accident
LOS ANGELES - A California federal judge on May 23 granted an insurer's motion for summary judgment on the remaining claims in a production company insured's lawsuit seeking coverage for damages caused by a train accident that killed a camera technician and injured the film's director and several crew members (Film Allman LLC v. New York Marine and General Insurance Co., Inc., No 14-7069, C.D. Calif., 2017 U.S. Dist. LEXIS 79139).



Appeals Panel Says Policy Limits Were Exhausted, No Further Duty To Defend Exists
LOS ANGELES - The Second District California Court of Appeal on May 18 reversed a trial court's judgment in favor of an insured in a silica coverage case after determining that the insured released its right to assert any bad faith claims against the insurer and after finding that the insurer has no further duty to defend the insured because the insurer's policy limits were exhausted in 2013 (Truck Insurance Exchange v. Moldex Metric Inc., et al., No. B272378, Calif. App., 2nd Dist., 2017 Cal. App. Unpub. LEXIS 3485).



Judge Trims Claims In Renters Insurance Dispute Over Fire Losses
ST. LOUIS - A federal judge in Missouri partially dismissed claims in an insurance dispute over coverage for a renters insurance policy on May 22, ruling that insureds failed show that they could bring a state law claim for breach of fiduciary duty of good faith and fair dealing against their insurer (American Modern Home Insurance Co. v. Aaron Thomas, et al., No. 16-215, E.D. Mo., 2017 U.S. Dist. LEXIS 77302).



Judge: Issues Must Be Resolved In Bad Faith Suit Before Judgment Can Be Issued
OXFORD, Miss. - Summary judgment in an insurance breach of contract and bad faith lawsuit is not proper because an insured has stated material issues of genuine fact that must be determined before any judgment may be issued in the action, a federal judge in Mississippi ruled on May 23 in denying an insurer's motion (Patricia L. Smith, et al. v. Fidelity & Guaranty Life Insurance Co., No. 16-0001, N.D. Miss., 2017 U.S. Dist. LEXIS 78104).



Insured Failed To Show Cancellation Of Policy Was In Bad Faith, Judge Rules
NEWARK, N.J. - An insured has failed to state any plausible claims to support his contention that his life insurance provider breached its contract or acted in bad faith in canceling his policy without providing proper notification, a federal judge in New Jersey ruled June 5 in granting the insurer's motion to dismiss (David M. Watkins v. Protective Life Insurance Co., No. 17-0734, D. N.J., 2017 U.S. Dist. LEXIS 85862).



Adjuster Was Improperly Joined To Coverage Dispute Over Storm Damage, Judge Says
SHERMAN, Texas - A Texas federal judge on May 16 denied insureds' motion to remand their breach of contract and bad faith lawsuit arising from storm damage, finding that they failed to allege a claim that is plausible on its face against an insurance adjuster (Hidden Cove Park and Marina, et al. v. Lexington Insurance Co., et al., No. 17-00193, E.D. Texas, 2017 U.S. Dist. LEXIS 74097).



Idaho Supreme Court Majority Reverses, Remands Breach Of Contract Ruling
BOISE, Idaho - The majority of the Idaho Supreme Court on May 11 reversed a judgment entered in favor of an insurer after determining that the trial court erred in finding that the insurer did not breach its contract or act in bad faith in its handling of its insureds' claim for the repair of a motor home (Joel W. Harmon et al., v. State Farm Mutual Automobile Insurance Co., No. 43802, 2017, Idaho Sup., 2017 Ida. LEXIS 127).



Federal Judge Stays Bad Faith Suit Pending Appeal In Underlying Action
SEATTLE - A stay of proceedings in an insurance breach of contract and bad faith lawsuit is proper because the stay will not substantially injure the plaintiffs, a federal judge in Washington ruled May 8 in granting an insurer's motion in a third-party automobile insurance dispute (Kathleen Link, et al. v. American Family Mutual Insurance Co., No. 16-1117, W.D. Wash., 2017 U.S. Dist. LEXIS 70046).



Judge Dismisses Bad Faith Claim In Class Action Suit Against Automobile Insurer
SCRANTON, Pa. - A Pennsylvania federal judge on May 10 granted an automobile insurer's motion to dismiss bad faith and other claims in a class action brought by a woman claiming that she was wrongfully denied medical benefits coverage following an automobile accident, but allowed claims brought under the Pennsylvania Motor Vehicle Financial Responsibility Law (MVFRL) to proceed (Sayles v. Allstate Insurance Co., No. 16-1534, M.D. Pa., 2017 U.S. Dist. LEXIS 71760).



Judge Green-Lights Expert Opinions In Bad Faith Insurance Action
TAMPA, Fla. - Experts for both a driver injured in a crash and an insurance company accused of acting in bad faith in not settling the driver's claim can offer their opposing opinions based on their qualifications and sound methodology, as long as the opinions are not legal in nature, a Florida federal judge held May 12 (Nicky B. Dudash v. Southern-Owners Insurance Co., No. 8:16-cv-290, M.D. Fla., 2017 U.S. Dist. LEXIS 73002).



California Appellate Panel Affirms Dismissal Of Bad Faith Suit As Time-Barred
LOS ANGELES - A state trial court's dismissal of an insured's breach of contract and bad faith claims in a homeowners insurance dispute was proper because the insured's claims were filed after the claims' one-year statute of limitations had run, a California appellate panel ruled in affirming on May 12 (Heather A. Smillie v. State Farm General Insurance Co., No. B268353, Calif. App., 2nd Dist., Div. 8, 2017 Calif. App. Unpub. LEXIS 3252).



Claims In Hurricane Irene Dispute Are Time-Barred, 4th Circuit Says In Reversal
RICHMOND, Va. - The Fourth Circuit U.S. Court of Appeals on May 3 held that a breach of contract and bad faith lawsuit against a federal flood insurer arising from Hurricane Irene damage is barred by the one-year statute of limitations pursuant to its Standard Flood Insurance Policy (SFIP), reversing a lower court's ruling that awarded the insureds $233,398 for breach of contract, $700,194 for bad faith and $63,962.50 in attorney fees (Gary Woodson, et al. v. Allstate Insurance Co., Nos. 16-1935 and 16-2018, 4th Cir., 2017 U.S. App. LEXIS 7862).



Texas Panel Refuses To Revisit Ruling In Favor Of Insurer, Adjuster
FORTH WORTH, Texas - A Texas appeals panel on May 4 denied insureds' motion to reconsider a Feb. 9 ruling that found they failed to produce competent evidence to raise a genuine issue of material fact regarding whether their property damage loss occurred during their homeowners insurance policy period (Richard Seim, et al. v. Allstate Texas Lloyds, et al., No. 02-16-00050, Texas App., 2nd Dist., 2017 Tex. App. LEXIS 4068).



Amount In Controversy In Bad Faith Suit Exceeds Statutory Limit, Judge Rules
HOUSTON - Remand of an insurance breach of contract and bad faith lawsuit to state court is not proper because the amount in controversy exceeds the statutory limit, a federal judge in Texas ruled May 5 in denying an insured's motion (Pamela Crouch v. Nationwide General Insurance Co., No. 17-634, S.D. Texas, 2017 U.S. Dist. LEXIS 68814).



Issues Of Fact Exist In Water, Mold Damage Suit, 10th Circuit Majority Says
DENVER - The majority of the 10th Circuit U.S. Court of Appeals on May 4 agreed with an insured that a Utah federal magistrate judge erred in granting judgment in an insurer's favor because genuine issues of material fact exist regarding whether water and mold damage occurred over an extensive period of time and whether the damage was caused by a sudden and accidental escape of water (Thomas Wheeler v. Allstate Insurance Co., et al., No. 15-4159, 10th Cir., 2017 U.S. App. LEXIS 7954).



Judge Dismisses Bad Faith Claims As Untimely In Dispute Over $15.1M Judgment
BIRMINGHAM, Ala. - An Alabama federal judge on May 11 dismissed insureds' bad faith claims as untimely against two insurers in the insureds' lawsuit seeking indemnification for an underlying $15,150,000 judgment that arose from a fatal car accident involving intoxicated minors (Ibrahim Sabbah v. Nationwide Mutual Insurance Co., No. 15-1772, N.D. Ala., 2017 U.S. Dist. LEXIS 71726).



Adjuster Was Improperly Joined To Coverage Dispute Over Storm Damage, Judge Says
SHERMAN, Texas - A Texas federal judge on May 16 denied insureds' motion to remand their breach of contract and bad faith lawsuit arising from storm damage, finding that they failed to allege a claim that is plausible on its face against an insurance adjuster (Hidden Cove Park and Marina, et al. v. Lexington Insurance Co., et al., No. 17-00193, E.D. Texas, 2017 U.S. Dist. LEXIS 74097).



Insured May Be Able To Recover Against Adjuster In Bad Faith Suit, Judge Rules
DALLAS - A federal judge in Texas on May 10 ruled that remand of an insurance breach of contract and bad faith lawsuit to state court is warranted because an insured has shown that it may recover against the adjuster for failing to offer a fair settlement on a commercial property insurance claim (Arlington Heights Memorial Post No. 8234 Veterans Of Foreign Wars of the United States, Fort Worth, Texas, v. Covington Specialty Insurance Co., et al., No. 16-3112, N.D. Texas, 2017 U.S. Dist. LEXIS 71125).



California Federal Judge Allows Counterclaims In Sewage Spill Coverage Suit
LOS ANGELES - A California federal judge on May 4 partially granted a motion to assert breach of contract and bad faith counterclaims against an insurer in a coverage dispute arising out of a sewage spill after determining that the insurer would not be prejudiced if the counterclaims were asserted by the defendants (Travelers Property Casualty Company of America v. Mountain Movers Engineering Contactors Inc., No. 16-2127, S.D. Calif.; 2017 U.S. Dist. LEXIS 68575).



Legal Conclusions Out, Rest Of Testimony In, Judge Says In Coverage Row
MOBILE, Ala. - The legal nature of the opinions of one expert witness for an insurer in a coverage dispute over underlying trademark infringement claims precludes the expert from testifying about such opinions, but the expert's other opinions, and those of a second expert for the insurer, are admissible under Daubert, an Alabama federal judge held May 12 (Hibbett Patient Care, LLC, et al. v. Pharmacists Mutual Insurance Co., No. 16-0231, S.D. Ala., 2017 U.S. Dist. LEXIS 72786).



No Support For Breach Of Contract Tied To Payment Of Reinsurance Deductible
NEW YORK - In support of a breach of contract claim in an insurance coverage dispute over flood damage at a construction site, construction companies failed to show that their insurer's settlement caused them to pay a $50,000 deductible under a captive reinsurance agreement, a New York federal judge ruled May 4, dismissing the complaint (Keller Foundations LLC, et al. v. Zurich American Insurance Co., No. 16-6751, S.D. N.Y., 2017 U.S. Dist. LEXIS 68902).



Panel Affirms Dismissal Of Bad Faith Lawsuit Against Automobile Insurer
ATLANTA - A federal district court did not err in excluding certain testimony from an insurer's adjusters in an insurance bad faith lawsuit because an insured failed to show that the excluded testimony was a legally permissible opinion, an 11th Circuit U.S. Court of Appeals panel ruled April 20 in affirming (John F. Hooks v. GEICO General Insurance Co., No. 16-16767, 11th Cir., 2017 U.S. App. LEXIS 6860).



Judge Refuses To Dismiss Bad Faith Claims In Vehicle Accident Coverage Case
TAMPA, Fla. - A Florida federal judge on May 1 denied an insurer's motion to dismiss bad faith claims against it in relation to coverage for an automobile accident, finding that the question of whether the insurer acted in bad faith when it failed to participate in settlement negotiations should be decided by a jury (Nicky B. Dudash v. Southern-Owners Insurance Co., No. 16-290, M.D. Fla., 2017 U.S. Dist. LEXIS 65367).



Federal Judge Remands Bad Faith Suit Based On Amount In Controversy
DALLAS - A Texas federal judge on April 21 remanded an insured's suit alleging bad faith and breach of contract after determining that the amount in controversy does not meet the jurisdictional minimum to remain in federal court (Doris Marie Washington v. Geico General Insurance Co., No. 17-961, N.D. Texas, 2017 U.S. Dist. LEXIS 60828).



Judge: Insurer In Bad Faith Suit Failed To Show Why Offer Was Appropriate
SPOKANE, Wash. - A federal judge in Washington on April 27 partially granted an insured's summary judgment motion in an insurance bad faith lawsuit, ruling that an insurer, in offering a settlement on an underinsured motorist claim, failed to provide any explanation as to why it felt the settlement amount it was offering was a fair value (Richard H. Phillips III v. USAA Casualty Insurance Co., No. 16-0381, E.D. Wash., 2017 U.S. Dist. LEXIS 64081).



Nevada Federal Judge Finds No Bad Faith, Says Policy Excluded Off-Road Vehicles
LAS VEGAS - An insurer did not act in bad faith in denying a claim for uninsured/underinsured motorist benefits because the insurer investigated the claim and reasonably denied coverage based on the policy's exclusion for off-road vehicles, a Nevada federal judge said April 26 (Jennifer Walker, et al. v. State Farm Mutual Automobile Insurance Co., No. 16-986, D. Nev., 2017 U.S. Dist. LEXIS 63269).



Judge Declines To Remand Insurance Bad Faith Lawsuit To State Court
LAS VEGAS - Remand of an insurance breach of contract and bad faith lawsuit to state court is not warranted because the amount in controversy exceeds statutory limits and because an insured brought his motion to remand pursuant to the wrong rules, a federal judge in Nevada ruled April 26 in denying the insured's motion (Robert Conway v. National General Insurance Co., No. 17-748, D. Nev., 2017 U.S. Dist. LEXIS 63147).



Federal Magistrate Judge Says Bifurcation Could Delay Resolution Of Insureds' Suit
ALBUQUERQUE, N.M. - A New Mexico federal judge on April 24 denied an insurer's motion to bifurcate insureds' extracontractual claims from a breach of contract claim after determining that bifurcation could result in a significant delay of the resolution of the case (Lisa Yazzie, et al. v. Government Employees Insurance Co., et al., No. 16-1085, D. N.M., 2017 U.S. Dist. LEXIS 61459).



Insurer Did Not Act In Bad Faith In Storm Damage Dispute, 10th Circuit Affirms
DENVER - The 10th Circuit U.S. Court of Appeals on April 19 rejected insureds' argument that an insurer acted in bad faith by unreasonably delaying an appraisal and by failing to conduct an adequate claim investigation, affirming a lower federal court's ruling in favor of the insurer (Hayes Family Trust, et al. v. State Farm Fire and Casualty, No. 15-6231, 10th Cir., 2017 U.S. App. LEXIS 6713).



Bad Faith, Breach Of Fiduciary Duty Claims Severed In Coverage Suit
NEWARK, N.J. - A New Jersey federal judge on April 25 denied an insurer's motion to dismiss but stayed the insured's claims for bad faith and breach of fiduciary duty until the insured's declaratory judgment and breach of contract claims are resolved after determining that staying those claims will better help to manage the case (Port Liberte Homeowners Association Inc. v. Lexington Insurance Co., No. 16-7934, D. N.J., 2017 U.S. Dist. LEXIS 63394).



Judge Refuses To Revisit Ruling In Coverage Dispute Over $2.6M In Punitives
PHILADELPHIA - A Pennsylvania judge on March 21 rejected the appeal of a Jan. 20 ruling that a commercial umbrella liability insurer has no duty to indemnify its insured against $2.6 million in punitive damages that it paid to settle an underlying wrongful death and survival action (Bensalem Racing Association, Inc., et al. v. Ace Property and Casualty Insurance Co., No. 4858, Pa. Comm. Pls., Philadelphia Co.).



California Federal Judge Tosses Intentional Infliction Of Emotional Distress Claims
SACRAMENTO, Calif. - A California federal judge on April 20 dismissed with prejudice an elderly man's claims of intentional infliction of emotional distress (IIED) against Mutual of Omaha because the man has not identified "any extreme and outrageous conduct" by the defendant (Donald Mann v. Mutual of Omaha, et al., No. 16-2560, E.D. Calif., 2017 U.S. Dist. LEXIS 60579).



Washington High Court Majority Says Coverage Owed For Negligent Installation
SEATTLE - The majority of the Washington Supreme Court on April 27 determined that an insurer has a duty to defend underlying claims arising out of carbon monoxide poisoning because the efficient proximate cause of the loss was the negligent installation of a hot water heater, which is a covered occurrence under the policy (Zhaoyun Xia, et al. v. ProBuilders Specialty Insurance Co., et al., No. 92436-8, Wash. Sup., 2017 Wash. LEXIS 443).



N.J. Panel: Broker Had No Duty To Provide Quotes For Higher Policy Limits
TRENTON, N.J. - A New Jersey panel on May 1 rejected a tool manufacturer insured's argument that its insurance broker breached a duty to provide additional flood quotes for its Harrison, N.J., commercial facilities, affirming a lower court's ruling in favor of the broker in a dispute arising from Superstorm Sandy flood damage (C.S. Osborne & Co., Inc. v. The Charter Oak Fire Insurance Co., et al., No. A-2182-15T4, N.J. Super., App. Div., 2017 N.J. Super. Unpub. LEXIS 1051).



Parties Debate Whether Defendant Pleaded Negligence Claim In Insurance Dispute
NEW ORLEANS - Parties in an insurance dispute recently asked the Fifth Circuit U.S. Court of Appeals to determine whether a federal district court erred in ruling that a third-party defendant failed to properly plead her negligence claim against an insurer and abused its discretion in denying the defendant's motion for leave to amend her complaint to add a claim for bad faith (Jenny Berry v. Banner Life Insurance Co., No. 16-51198, 5th Cir.).



9th Circuit Asked To Decide Whether Summary Judgment Was Proper In Bad Faith Suit
SAN FRANCISCO - Parties in an insurance dispute asked the Ninth Circuit U.S. Court of Appeals recently to determine whether a federal district court erred in granting an insurer's motion for summary judgment on claims that it breached its duty to defend and acted in bad faith in denying coverage under an indemnity insurance policy (Sunrise Specialty Co. Inc., et al. v. Scottsdale Insurance Co., No. 16-16856, 9th Cir.).