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®
Judge Finds Bad Faith Claim Insufficient In Auto Insurance Dispute
PHILADELPHIA - An insured has failed to plead whether his insurance bad faith claim is a common-law contract law claim or a statutory claim, a federal judge in Pennsylvania ruled April 10 in dismissing the bad faith claim with leave to amend (Jeremy Z. Mittman v. Nationwide Affinity Insurance Co., No. 16-04658, E.D. Pa., 2017 U.S. Dist. LEXIS 54220).
Bad Faith Claim Against Insurer Is Not Supported, Federal Magistrate Judge Says
HARRISBURG, Pa. - A review of the communications between an insurer and its insured's counsel after the insurer was notified that the insured was pursuing a claim for underinsured motorist benefits does not support a claim of bad faith against the insurer, a Pennsylvania federal magistrate judge said April 10 in granting the insurer's motion for summary judgment (Tracey Ridolfi v. State Farm Mutual Automobile Insurance Co., No. 15-859, M.D. Pa., 2017 U.S. Dist. LEXIS 54267).
Insured's Bad Faith Suit Barred By Statute Of Limitations, Judge Rules
TAMPA, Fla - An insured's bad faith claim is based on his insurer's alleged breach of its fiduciary duty to him and is, thus, subject to a four-year statute of limitations, a federal judge in Florida ruled April 18 in granting the insurer' motion to dismiss (Waldermar Baranowski v. GEICO General Insurance Co., No. 17-301, M.D. Fla., 2017 U.S. Dist. LEXIS 5885).
Failure To Pay Judgment Constitutes Bad Faith, Federal Judge Determines
SEATTLE - A Washington federal judge on April 19 granted an insured's motion for summary judgment after determining that the insured presented sufficient evidence that the insurer's failure to pay a judgment entered in favor of the insured constitutes bad faith (Arika Prince v. State Farm Mutual Automobile Insurance Co., No. 16-563, W.D. Wash., 2017 U.S. Dist. LEXIS 59794).
Oklahoma Federal Judge Says Insureds' Bad Faith Claim Is Not Supported By Facts
TULSA, Okla. - An Oklahoma federal judge on April 7 granted an insurer's motion to dismiss claims of bad faith and intentional infliction of emotional distress alleged by insureds seeking coverage for damages to their home sustained by high winds after determining that the insureds failed to provide any facts in support of either claim (Lance W. Hightower, et al. v. USAA Casualty Insurance Co., et al., No. 16-274, N.D ..Okla., 2017 U.S. Dist. LEXIS 53645).
In Remanded False Claims Act Suit, Discovery Limited To Identified Properties
GULFPORT, Miss. - In a case concerning an insurer's False Claims Act (FCA) violations on Hurricane Katrina claims, a Mississippi federal judge on April 12 granted the parties' motions to reopen the case, which was remanded after a U.S. Supreme Court ruling, limiting initial discovery on those purported violations to properties previously identified in a list provided by the insurer (United States, ex rel. Cori Rigsby, et al. v. State Farm Fire & Casualty Co., No. 1:06-cv-00433, S.D. Miss.).
Texas Federal Judge Says Insurer Had Reasonable Basis For Denying Claim
WACO, Texas - Because a property insurer had a reasonable basis to deny an insured's claim for roof damages incurred as the result of a hailstorm, a Texas federal judge on April 6 granted the insurer's motion for summary judgment as it pertained to the insured's claims for bad faith and violations of the Texas Insurance Code and Texas Deceptive Trade Practices Act (Stephen Hahn v. United Fire and Casualty Co., No. 15-218, W.D. Texas, 2017 U.S. Dist. LEXIS 53178).
New York Federal Judge Grants Insurers' Motion To Withdraw Bankruptcy Reference
NEW YORK - A New York federal judge on April 17 granted a motion filed by two insurers to withdraw an insured's adversary proceeding from bankruptcy court because the bankruptcy court does not have the authority to decide the breach of contract and bad faith claims alleged against the insurers in the adversary proceeding (Phillip Michael Scott v. AIG Property Casualty Co., et al., No. 17-1052, S.D. N.Y., 2017 U.S. Dist. LEXIS 58339).
Bad Faith Counterclaim Based On Same Facts As Breach Of Contract Claim, Justice Says
NEW YORK - A New York justice on April 11 dismissed a counterclaim for bad faith alleged against an insurer because the bad faith counterclaim is premised on the same set of facts as the breach of contract counterclaim (Travelers Property Casualty Company of America, et al. v. ICCO Cheese Co. Inc., No. 652787/2016, N.Y, Sup., New York Co., 2017 N.Y. Misc. LEXIS 1363).
Judge: Insured Failed To Show Reconsideration In Bad Faith Suit Warranted
INDIANAPOLIS - An insured failed to show that any manifest error of law or fact exists that would require amendment of three previous orders in an insurance bad faith lawsuit, a federal judge in Indiana ruled April 18 in denying the insured's motion for reconsideration of three earlier rulings in the suit (H.E. McGonigal Inc. v. Harleysville Lake States Insurance Co., et al., No. 15-549, S.D. Ind., 2017 U.S. Dist. LEXIS 58782).
Insurer Estopped From Use Of Subcontractors Exception Based On Improper Info
PHOENIX - An insurer is estopped from asserting a coverage defense to a homeowner's breach of contract and bad faith lawsuit based on the subcontractors exclusion because the information relevant to that defense was improperly disclosed by an insured contractor's counsel, a visiting Alaska federal judge to the Arizona federal court ruled April 10 (Karen Cosgrove v. National Fire & Marine Insurance Co., No. 14-2229, D. Ariz., 2017 U.S. Dist. LEXIS 54479).
Forty Niners' Insurer Appeals Ruling Ordering It To Equally Contribute To Defense
PASADENA, Calif. - The San Francisco Forty Niners Football Co.'s primary commercial general liability insurer on April 12 filed a notice of appeal in the Ninth Circuit U.S. Court of Appeals challenging a lower federal court's finding that it has duty to contribute by equal shares with another insurer to defense costs in an underlying lawsuit against the football team and others (First Mercury Insurance Co. v. Great Divide Insurance Co., No. 17-1511, 9th Cir.).
Judge Allows Testimony On Cause Of Damages In Bad Faith Suit Against Insurer
CHARLESTON, S.C. - An additional insured may offer layman testimony about the cause of damages or cost of repairs at a condominium association for purposes of its bad faith lawsuit against an insurer, a South Carolina federal judge ruled April 6 (UFP Eastern Division Inc. f/k/a Universal Forest Products Eastern Division Inc. v. Selective Insurance Company of South Carolina, No. 15-2801, D. S.C., 2017 U.S. Dist. LEXIS 53190).
Judge: Fact Issues Exist On If Independent Counsel Is Required For Insured's Defense
CHICAGO - In an insured's breach of contract and bad faith lawsuit against its commercial general liability insurer, an Illinois federal judge ruled April 11 that the parties failed to provide evidence to clear up genuine issues of material fact regarding whether independent counsel should be appointed for an insured in an underlying construction defects case (DePasquale Steel Erectors Inc. v. Gemini Insurance Co., No. 16-10892, N.D. Ill., 2017 U.S. Dist. LEXIS 54917).
Louisiana Federal Judge Says Insured Failed To Prove Damage Was Covered
NEW ORLEANS - Because an insured failed to prove that heavy rains caused engine damage to a recreational vehicle and because the insured failed to submit a proof of loss for the claim, a Louisiana federal judge on April 19 granted the insurer's motion for summary judgment on the insured's claims for breach of contract and bad faith (Henry Rosenthal v. Allstate Property and Casualty Insurance Co., No. 16-13732, E.D. La., 2017 U.S. Dist. LEXIS 59564).
No Claim For Wrongful Act; No Coverage, Insurer Argues To Federal Court
TULSA, Okla. - An insurer recently argued to an Oklahoma federal court that an underlying breach of contract lawsuit brought against its insured by a former business partner fails to allege a wrongful act to trigger coverage under a professional liability insurance policy (Doug Schwegman, d/b/a Schwegman Insurance and Financial Services v. Continental Casualty Co., No. 16-0730, N.D. Okla.).
Judge Denies Insurer's Summary Judgment Motion In Bad Faith Suit
OMAHA, Neb. - An insurer has failed to show any lack of a material dispute of genuine fact supporting its motion for summary judgment on an insurance bad faith claim in a homeowners insurance dispute, a federal judge in Nebraska ruled March 30 in denying the motion (Eric D. Hayes v. Metropolitan Property & Casualty Insurance Co., No. 14-339, D. Neb., 2017 U.S. Dist. LEXIS 47848).
Insured Failed To State A Viable Bad Faith Claim, Federal Judge Rules
PHILADELPHIA - An insured's insurance breach of contract and statutory bad faith lawsuit against its insurer was untimely filed pursuant to the policy's limitations period, and the insured failed to state a claim upon which relief could be granted for bad faith, a federal judge in Pennsylvania ruled March 30 in granting the insurer's motion for judgment on the pleadings (Michael Long v. Farmers New Century Insurance Co., No. 15-6724, E.D. Pa., 2017 U.S. Dist. LEXIS 47552).
Lack Of Insurance Bad Faith Evidence Leads To Dismissal In Coverage Dispute
CAMDEN, N.J. - Insureds have failed to provide sufficient evidence to show that their homeowners insurance provider acted in bad faith in denying their claim for coverage, a federal judge in New Jersey ruled April 3 in granting the insurer's motion to dismiss (William Williams, et al. v. State Farm Fire & Casualty Insurance Co., No. 16-9028, D. N.J., 2017 U.S. Dist. LEXIS 50261).
Magistrate Rules On Discovery Motions In Bad Faith Dispute Over Vandalism Claim
SEATTLE - A Washington federal magistrate judge on March 24 granted in part an insurer's motion for a protective order and denied in part insureds' motion to compel production of documents in a bad faith lawsuit arising from the insureds' $185,000 claim for vandalism damage (Stay@Home Design LLC, et al. v. Foremost Insurance Company Grand Rapids, Michigan, No. 16-1673, W.D. Wash., 2017 U.S. Dist. LEXIS 44734).
Judge: Bifurcation Won't Result In Quicker Resolution Of Claims In Bad Faith Suit
ALBUQUERQUE, N.M. - Bifurcation and a stay of all noncontractual claims in an insurance breach of contract and bad faith lawsuit is not proper because bifurcation would not result in a "more expeditious resolution" of the action, a federal judge in New Mexico ruled March 27 in denying an insurer's motion to bifurcate (Theresa Martinez v. State Farm Mutual Automobile Insurance Co., No. 16-1029, D. N.M., 2017 U.S. Dist. LEXIS 44277).
Judge: Prejudgment Interest Denied; Material Issue Remains On Bad Faith Claim
BROOKLYN, N.Y. - A judge in the U.S. District Court for the Eastern District of New York on March 31 ruled that an insurer was not obligated to pay prejudgment interest in excess of policy limits on two underlying auto accident claims that were consolidated, but denied the insurer's request for a finding that it acted in good faith on grounds that conflicting evidence presented by the parties "gives rise to a genuine dispute of material fact" (Government Employees Insurance Company v. Diane Saco, et al., No. 12-5633 and Suzanne Kusulas, et al. v. Government Employees Insurance Company, No. 15-634, E.D. N.Y.; 2017 U.S. Dist. LEXIS 49366).
Court Finds Uninsured Motorist Case Did Not Prevent Bad Faith Claim
SEATTLE - A Washington state court on March 28 reversed a trial court's decision that granted summary judgment for an insurer on an insurer's bad faith claim in relation to a coverage suit, finding that a previous action seeking uninsured motorist coverage did not preclude her from filing a bad faith action (Anastasia Forston-Kemmerer v. Allstate Insurance Co., No. 34640-4-III, Wash. App., Div. 3, 2017 Wash. App. LEXIS 739).
Wrongly Disclosed Materials To Be Returned In Bad Faith Case; Counsel Disqualified
ORLANDO, Fla. - A Florida federal judge on March 30 found that privileged attorney communications were mistakenly submitted in response to an insurer's discovery request in an insurance bad faith lawsuit, leading the judge to affirm a magistrate's order compelling the documents' return to the plaintiff (Nadine Walker v. GEICO Indemnity Co., No. 6:15-cv-01002, M.D. Fla., 2017 U.S. Dist. LEXIS 47670).
New Mexico Federal Judge Says Bad Faith, Breach Of Contract Claims Can Stand
ALBUQUERQUE, N.M. - A New Mexico federal judge on March 29 denied a motion for partial judgment on the pleadings filed by insurers in a hail damage and theft coverage dispute after determining that the insured alleged sufficient facts in support of claims for breach of contract and bad faith (Sedillo Electric, et al. v. Colorado Casualty Insurance Co., et al., Nos. 15-1172, 16-43, D. N.M., 2017 U.S. Dist. LEXIS 46442).
Insured's Misrepresentation Defeats Coverage, Bad Faith Claim, Judge Rules
BALTIMORE - Finding that a policyholder was bound by a material misrepresentation made by its insurance broker on a policy application, a Maryland federal judge on March 27 held that an insurer was entitled to rescind the policy, defeating the insured's breach of contract and bad faith claims (Dominant Investments 113 LLC v. United States Liability Insurance Co., No.1:16-cv-03081, D. Md., 2017 U.S. Dist. LEXIS 44008).
Federal Judge: Excess Insurer Has No Duty To Defend, Indemnify Manufacturer
EVANSVILLE, Ind. - An Indiana federal judge on March 22 ruled in favor of an excess insurer in a manufacturer insured's breach of contract and bad faith lawsuit seeking coverage for an underlying lawsuit alleging claims for breach of contract, breach of express warranty, breach of implied warranty of fitness for a particular purpose, breach of implied warranty of merchantability and negligence (Berry Plastics Corporation v. Illinois National Insurance Co., No. 15-00170, S.D. Ind., 2017 U.S. Dist. LEXIS 41546).
Loss Of Boats Was Not Theft, Judge Finds In Ruling For Insurer
FRESNO, Calif. - An insurer did not breach a boat business' all-risk policy in bad faith by denying coverage for a theft claim because the evidence at trial showed that the loss of the business' boat inventory was not the result of theft but rather a family's asset transfer scheme gone awry, a California federal judge held March 31 (Pacific Marine Center, Inc. v. Philadelphia Indemnity Insurance Company, No. 1:13-cv-00992, E.D. Calif., 2017 U.S. Dist. LEXIS 49637).
9th Circuit Affirms $6.1M Judgment In Favor Of Insured In Dispute With Excess Insurer
PASADENA, Calif. - The Ninth Circuit U.S. Court of Appeals on March 21 affirmed a lower federal court's $6,080,568 judgment in favor of an insured in a breach of contract and bad faith lawsuit against its excess general liability insurer arising from an underlying patent infringement dispute (Teleflex Medical Incorporated v. National Union Fire Insurance Company of Pittsburgh, Pa., No. 14-56366, 9th Cir., 2017 U.S. App. LEXIS 4996).
Implied Covenant Of Good Faith Out In Indemnification Lawsuit For Worker's Injury
ROCHESTER, N.Y. - A New York federal judge on March 15 dismissed a claim of breach of implied covenant of good faith and fair dealing in a dispute over who pays for injuries to a construction subcontractor employee (Nazareth College of Rochester, et al. v. Harleysville Preferred Insurance Co., No. 16-6418, W.D. N.Y., 2017 U.S. Dist. LEXIS 37050).
Federal Judge Orders Forty Niners' Insurer To Equally Contribute To Defense
SAN JOSE, Calif. - A California federal judge on March 14 found that San Francisco Forty Niners Football Co.'s primary commercial general liability insurer has a duty to contribute by equal shares with another insurer to defense costs in an underlying lawsuit against the football team and others (First Mercury Insurance Co. v. Great Divide Insurance Co., No. 16-02114, N.D. Calif., 2017 U.S. Dist. LEXIS 36501).
Judge: Insurer Breached Duty To Defend, Indemnify Construction Suit Settlement
ANCHORAGE, Alaska - An insurer breached its duty to defend and indemnify an insured for a settlement of underlying claims arising out of a breach of contract dispute on a construction project, an Alaska federal judge ruled March 16; however, the judge held that the insurer did not breach its duty of good faith (KICC-Alcan General, joint venture v. Crum & Forster Specialty Insurance Company Inc., No. 15-00255, D. Ala., 2017 U.S. Dist. LEXIS 37560).
Judge: Jury Instructions Not Needed To Properly State Law In Bad Faith Suit
ATLANTA - A federal district court did not abuse its discretion in denying a third party's proposed jury instructions in an insurance bad faith lawsuit because the proposed instructions were not necessary "to correctly state the law," an 11th Circuit U.S. Court of Appeals panel ruled March 17 in affirming (Douglas Stalley v. Allstate Insurance Co., et al., No. 16-14816, 11th Cir., 2017 U.S. App. LEXIS 4734).
Other Insurer's Claims Handling Not Relevant In Bad Faith Suit, Judge Rules
TAMPA, Fla. - Reconsideration of a federal district court's ruling to grant an insurer a new trial in an insurance bad faith lawsuit is not warranted because an insured's reference to another insurer's claims handling for a bodily injury claim was not relevant and not properly considered by a jury, a federal judge in Florida ruled March 13 in denying the insured's motion for reconsideration (Joshua Moore v. GEICO General Insurance Co., No. 13-1569, M.D. Fla., 2017 U.S. Dist. LEXIS 35136).
No UIM Coverage For Pedestrian Injury Under Antique Car Policy, Magistrate Rules
PITTSBURGH - An auto insurer properly denied underinsured motorist (UIM) coverage to a policyholder injured while a pedestrian, a Pennsylvania federal magistrate judge ruled March 13, finding that the antique auto policy limited UIM coverage to vehicle occupants in compliance with state law (John Bish, et al. v. American Collectors Insurance Inc., et al., No. 2:16-cv-01434, W.D. Pa., 2017 U.S. Dist. LEXIS 35205).
Federal Judge Says Claims Arising From Conduct Prior To Earlier Lawsuit Are Barred
LAS VEGAS - An insured's bad faith claims stemming from an insurer's conduct that occurred prior to the insured's filing of a previous lawsuit are precluded, but claims arising from the insurer's conduct that occurred after the first lawsuit was filed are not precluded, a Nevada federal judge said March 17 (Rosalind Searcy v. Esurance Insurance Co., No. 15-47, D. Nev., 2017 U.S. Dist. LEXIS 38705).
Judge: Insureds Point To Series Of Improper Acts In Making Bad Faith Claim
NEW HAVEN, Conn. - Insureds properly stated a claim for bad faith against their homeowners insurance provider for its denial of a claim for coverage due to policy exclusions because the insureds have pleaded a series of improper acts by the insurer in the handling of the claim, a federal judge in Connecticut ruled March 20 in denying the insurer's motion to dismiss (Justyn Cyr, et al. v. CSAA Fire & Casualty Insurance Co., No. 16-085, D. Conn., 2017 U.S. Dist. LEXIS 39387).
Judge Finds Dismissal Of Couple's Claim Does Not Establish Unfair Practices
NEW HAVEN, Conn. - A federal judge in Connecticut on March 17 dismissed a couple's claim that their insurer engaged in unfair and deceptive practices in violation of the Connecticut Unfair Insurance Practices Act (CUIPA) and the Connecticut Unfair Trade Practices Act (CUTPA) when denying their claim for concrete decay in their basement, finding that the plaintiffs did not show that the company practiced a pattern of denying similar claims (Kenneth T. Courteau, et al. v. Teachers Insurance Company, No. 16-cv-580, D. Conn., 2017 U.S. Dist. LEXIS 38434).
Court Remands Issue On Depreciation Rate, Affirms Dismissal Of Bad Faith Claim
HARRISBURG, Pa. - After finding that a genuine issue of fact exists as to the value of a property destroyed by a fire, a Pennsylvania court on March 10 reversed a portion of a trial court's ruling for an insurer but affirmed a finding that the insurer did not act in bad faith when it denied the insureds certain coverage under the policy (Sabrina Brown v. Everett Cash Mutual Insurance Co., et al., No. 1549 WDA 2015, Pa. Super., 2017 Pa. Super. LEXIS 161).
Claims Barred By Statute Of Limitations, Nevada Federal Judge Determines
LAS VEGAS - A Nevada federal judge on March 8 determined that insureds seeking coverage for a water damage claim cannot allege claims for bad faith, unfair claims practices and intentional infliction of emotional distress against their insurer because the claims are barred by the applicable statute of limitations (Maxwell B. Williams, et al. v. The Travelers Home and Marine Insurance Co., et al., No. 16-1856, D. Nev., 2017 U.S. Dist. LEXIS 33954).
Insureds Failed To Prove Bad Faith Claim, Delaware Supreme Court Concludes
WILMINGTON, Del. - Insureds failed to establish evidence that their insurer did not have a reasonable justification for denying their claim for water damage from a broken toilet to their condominium unit, the Delaware Supreme Court ruled March 13, affirming a directed verdict to the insurer on a bad faith claim (Debra Bennett and William Bennett v. USAA Casualty Insurance Co., No. S10C-02-010, Del. Sup.; 2017 Del. LEXIS 105).
Florida Federal Magistrate Judge Abates Bad Faith Claim, Says Claim Is Premature
MIAMI - A Florida federal magistrate judge on March 13 abated a plaintiff's bad faith claim on the basis that the bad faith claim is premature and cannot be adjudicated until after there has been a determination that the insurer breached its contract of insurance (Southeast Distributors Inc. v. United Specialty Insurance Co., No. 16-24549, S.D. Fla., 2017 U.S. Dist. LEXIS 35453).
Judge Denies Insured's Remand Motion In Insurance Bad Faith Suit
COLUMBUS, Ohio - 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 Ohio ruled March 13 (Leslie Wyatt v. New England Mutual Life Insurance Co., et al., No. 17-40, S.D. Ohio, 2017 U.S. Dist. LEXIS 35504).
Judge: Coverage For Negligence In Performing Insurance Services Was Not Triggered
LOS ANGELES - A California federal judge on March 17 dismissed without prejudice a breach of contract and bad faith lawsuit against a professional liability insurer in a coverage dispute arising from the insured's alleged breach of a loan agreement (GemCap Lending, LLC v. Scottsdale Indemnity Co., et al., No. 15-09942, C.D. Calif., 2017 U.S. Dist. LEXIS 38931).