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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®



 



Insured Failed To Prove Damages In Insurance Bad Faith Lawsuit, Panel Rules
LAS VEGAS - A Nevada trial court did not err in granting summary judgment in favor of an insurer in an insurance breach of contract and bad faith lawsuit because an insured failed to prove damages in making his claims, a Nevada appellate panel ruled Oct. 31 in affirming (Valgene Sutherland v. State Farm Mutual Automobile Insurance Co., No. 71389, Nev. App., 2017 Nev. App. Unpub. LEXIS 768).



Texas Panel Vacates Discovery Order, Says Documents Not Relevant To Contract Claim
TYLER, Texas - The 12th District Texas Court of Appeals on Nov. 8 determined that a trial court erred in granting an insured's motion to compel because the documents sought by the insured are not relevant to the contract claim and will not be relevant unless and until the extracontractual claims are tried (In re: Allstate Fire & Casualty Insurance Co., No. 12-17-00266, Texas App., 12th Dist., 2017 Tex. App. LEXIS 10428).



Ohio Panel Affirms Trial Court's Judgment In Insurer's Favor On Bad Faith Claim
TOLEDO, Ohio - A trial court did not err in granting an insurer's motion for summary judgment in a bad faith dispute over underinsured motorist coverage because the insured's voluntary dismissal of a prior bad faith claim was with prejudice and, therefore, prohibited the insured from refiling the claim, the Sixth District Ohio Court of Appeals said Nov. 9 (The Estate of Faye Brummitt, et al., v. Ohio Mutual Insurance Group, et al., No. E-17-014, Ohio App., 6th Dist., 2017 Ohio App. LEXIS 4898).



Judge: Amount In Controversy In Bad Faith Suit Does Not Exceed Statutory Limit
LAS VEGAS - An insurer has failed to show that an insured's damages sought in an insurance breach of contract and bad faith lawsuit exceed the $75,000 statutory threshold, a federal judge in Nevada ruled Nov. 9 in remanding that action to state court (Aurora Garcia v. Standard Insurance Co., No. 17-858, D. Nev., 2017 U.S. Dist. LEXIS 185891).



Questions Of Fact Exist As To Whether Insurer Acted In Bad Faith In Handling Claim
SEATTLE - A Washington federal judge on Nov. 14 denied an insurer's motion to dismiss a bad faith claim alleged against an insurer by an insured in an auto coverage dispute suit after determining that questions of fact exists as to whether the insurer acted reasonably in handling the insured's claim for underinsured motorist benefits (Lika Oung v. Allstate Fire & Casualty Insurance Co., et al, No. 16-1200, W.D. Wash., 2017 U.S. Dist. LEXIS 188393).



9th Circuit Panel Affirms Summary Judgment Ruling In Bad Faith Lawsuit
SAN FRANCISCO - A federal district court did not err in granting an insurer's motion for summary judgment in an insurance breach of contract and bad faith lawsuit because the repair cost estimate decided by a neutral umpire "was determinative of whether" an insured would receive a total loss payment under the terms of its aviation insurance policy for a loss sustained after an aircraft accident, a Ninth Circuit U.S. Court of Appeals panel ruled Nov. 3 in affirming the lower court's ruling (Minden Air Corp. v. Starr Indemnity & Liability Co., No. 16-15712, 9th Cir., 2017 U.S. App. LEXIS 22091).



Insurer Breached Contract In Denying Fire Loss Claim, Georgia Court Majority Says
ATLANTA - The majority of the Georgia Court of Appeals on Nov. 3 reversed a trial court's ruling that an insurer did not breach its contract by denying a claim for a fire loss after determining that the policy at issue does not require that the insured be a resident of the home that was insured prior to the fire loss (Ronald Lee v. Mercury Insurance Company of Georgia, et al., No. A17A0624, Ga. App., 2017 Ga. App. LEXIS 562).



Texas Panel: Insurer Was Properly Granted Judgment On Bad Faith Claims
SAN ANTONIO - The Fourth District Texas Court of Appeals on Nov. 8 affirmed a trial court's grant of summary judgment to an insurer on the insured's common-law bad faith claim after determining that the insured failed to offer evidence of an extreme act that caused an injury that was independent of the insured's breach of contract claim (Oscar Ortiz v. State Farm Lloyds, No. 04-17-00252, Texas App., 4th Dist., 2017 Tex. App. LEXIS 10395).



Insurer Did Not Act In Bad Faith By Only Paying For A Portion Of Floor Replacement
PHILADELPHIA - A Pennsylvania federal judge on Nov. 15 dismissed a bad faith claim alleged against a homeowners insurer after determining that the insureds failed to prove that the insurer acted unreasonably by paying for only a portion of the insureds' kitchen floor following a flood at the insureds' home (Steven Barnwell et al. v. Liberty Mutual Insurance Co., No. 16-4739, E.D. Pa., 2017 U.S. Dist. LEXIS 188427).



Insurer Did Not Act In Bad Faith In Denying Property Damage Claim, Panel Says
PHILADELPHIA - The Third Circuit U.S. Court of Appeals on Nov. 15 affirmed a district court's ruling in favor of an insurer in a property damage coverage dispute after finding that the evidence establishes that the insurer did not act in bad faith because it adequately investigated the insured's claim before determining that the claim was not covered under the policy (Edward Wehrenberg v. Metropolitan Property & Casualty Insurance Co., No. 17-1327, 3rd Cir., 2017 U.S. App. LEXIS 22887).



Federal Judge: Flood Did Not Become Excluded Peril Once Sublimits Were Exhausted
SHERMAN, Texas - A Texas federal judge on Nov. 9 granted insureds' motion for partial summary judgment in their breach of contract and bad faith lawsuit arising from storm damage, finding that the insurer remains liable for any damages caused by pure wind and the combination of wind and flood if such damages are proven by the insureds (Hidden Cove Park and Marina, et al. v. Lexington Insurance Co., et al., No. 17-00193, E.D. Texas, 2017 U.S. Dist. LEXIS 186191).



Insurer's Denial Of Coverage Was Not Made In Bad Faith, Ohio Federal Judge Says
TOLEDO, Ohio - An Ohio federal judge on Nov. 6 granted an insurer's motion for summary judgment after determining that the insureds, who seek coverage for a fire at their rental property, breached the policy's cooperation clause and as a result, the insurer's denial of coverage was reasonable and not in bad faith (Earnest Bolton Sr. v. State Farm Fire & Casualty Co., No. 16-220, N.D. Ohio, 2017 U.S. Dist. LEXIS 183469).



Judge: Policy Does Not Exclude Contractors' Work As Home Builder, Not Roofer
OKLAHOMA CITY - An insurance company must provide coverage for two contractors under two commercial general liability policies because the language in the policies does not exclude coverage for their work as home builders rather than as roofers, a federal judge in Oklahoma ruled Nov. 9 in denying the insurer's motion for summary judgment (James River Insurance Company v. 5 Star Integrity Roofing & Exteriors, LLC, et al., No. CIV-16-950-M, W.D. Okla., 2017 U.S. Dist. LEXIS 185945).



District Court Properly Found Insurer Did Not Act In Bad Faith, Panel Says
NEW YORK - A district court properly found that an insurer did not act in bad faith when handling an insurer's claim related to the settlement of an underlying personal injury suit arising out of a boating accident because the insured failed to prove that the insurer acted with gross disregard of the insured's interest, the Second Circuit U.S. Court of Appeals said Oct. 27 (Sea Tow International Inc. v. St. Paul Fire & Marine Insurance Co., et al., No. 16-3672, 2nd Cir., 2017 U.S. App. LEXIS 21308).



Question Of Fact Exists Regarding Agent's Statement In Auto Dispute, Judge Says
SCRANTON, Pa. - A Pennsylvania federal judge on Oct. 25 denied an insurer's motion for summary judgment on an insured's bad faith claim in an auto coverage dispute after determining that a question of fact exists as to whether the insurer's claims agent purposefully misstated the amount of a medical lien assessed against the insured in hopes of effectuating a settlement below the policy limits or simply made an honest mistake in communicating the amount of the medical lien to the insured (David Farrell v. United Financial Casualty Co., No. 16-2180, M.D. Pa., 2017 U.S. Dist. LEXIS 177042).



Judge: Regular Use Exception Precludes Coverage In Insurance Bad Faith Suit
PHILADELPHIA - An insurer did not breach its contract or act in bad faith when denying coverage under an automobile insurance policy for an insured who was injured in an automobile accident while traveling in a work vehicle because the accident was subject to a "regular use exception" in the policy, a federal judge in Pennsylvania ruled Oct. 30 in granting the insurer's summary judgment motion (Douglas Reeves v. The Travelers Companies, No. 16-6448, E.D. Pa., 2017 U.S. Dist. LEXIS 179720).



Judge Denies Summary Judgment Motions In Insurance Bad Faith Suit
NEW ORLEANS - Ruling that summary judgment in an automobile insurance dispute is inappropriate in an insurance bad faith lawsuit because the record fails to show when an insurer received the necessary proof of loss during discovery to trigger an unconditional tender under the policy's underinsured motorist provision, a federal judge in Louisiana on Oct. 24 denied summary judgment motions filed by both parties (Ralph Sacks v. Allstate Property and Casualty Insurance Co., No. 16-16578, E.D. La., 2017 U.S. Dist. LEXIS 175798).



Insurer's Motion To Remove Bad Faith Suit Was Not Timely, Federal Judge Says
SEATTLE - A Washington federal judge on Oct. 25 granted an insured's motion to remand in an auto coverage suit after determining that the insurer's notice of removal was not timely filed because the insurer had knowledge when the insured filed the complaint in state court that the damages would exceed the federal jurisdictional minimum amount of $75,000 (Anthony Grazia v. Safeco Insurance Company of Illinois, No. 17-1130, W.D. Wash., 2017 U.S. Dist. LEXIS 177179).



Potential For Bad Faith Damages Does Not Change Actual Amount In Controversy
LAS VEGAS - A Nevada federal judge on Oct. 30 rejected an insurer's argument that because an insured asserted a claim of bad faith against the insurer, which could subject the insurer to pay additional damages, the federal minimum amount in controversy has been met even though the insured's actual damages are only $11,500 (Ashley Gugino v. Government Employees Insurance Co., No. 17-2431, D. Nev., 2017 U.S. Dist. LEXIS 180385).



Insurance Adjuster Improperly Joined In Bad Faith Suit, Judge Rules
FORT WORTH, Texas - Remand of an insurance breach of contract and bad faith lawsuit to state court is not necessary because insureds improperly joined an insurance adjuster in an attempt to defeat federal court jurisdiction, a federal judge in Texas ruled Oct. 27 in denying the insureds' motion (Cheryl Fernandez, et al. v. Allstate Texas Lloyds, et al., No. 17-729, N.D. Texas, 2017 U.S. Dist. LEXIS 178273).



Bad Faith Claim Survives Dismissal In Homeowners Insurance Dispute
OKLAHOMA CITY - Insureds have pleaded minimally sufficient facts to support their insurance bad faith claim against their homeowners insurance provider for its alleged failure to properly investigation their claim and provide coverage under the policy, a federal judge in Oklahoma ruled Oct. 24 in denying the insurer's motion to dismiss the bad faith claim (Daniel E. Lang, et al. v. Farmers Insurance Co. Inc., No. 17-0919, W.D. Okla., 2017 U.S. Dist. LEXIS 175858).



Judge Awards Summary Judgment To Insurer On Bad Faith Claim
HUNTSVILLE, Ala. - A federal judge in Alabama on Oct. 25 awarded summary judgment to an insurer on a man's cause of action for bad faith, holding that the company had a legitimate reason for denying his claim for wind and water damage because the leak occurred due to the deterioration of his roof (Roger Walker v. Auto-Owners Insurance Company, No. 16-cv-448-CLS, N.D. Ala., 2017 U.S. Dist. LEXIS 176703).



Ohio Federal Magistrate Recommends Remanding Insured's Bad Faith Suit
DAYTON, Ohio - An Ohio federal magistrate judge on Oct. 24 recommended remanding an insured's bad faith suit to Ohio state court, where an underlying wrongful death suit against the insured is pending, because both cases hinge on whether the insured's airplane was unlawfully used by the insured's son (Peter H. Heins v. Commerce and Industry Insurance Co. et al., No. 17-0110, S.D. Ohio, 2017 U.S. Dist. LEXIS 175672).



Disability Insurer Did Not Act In Bad Faith In Failing To Pay Disability Claim
MOBILE, Ala. - A disability insurer did not act in bad faith in investigating and in failing to pay a disability claim because the insurer conducted an extensive investigation into the claim and had an arguable and debatable reason for denying the claim, an Alabama federal judge said Oct. 24 in granting the insurer's motion for summary judgment (Scott R. Weisberg, M.D., v. Guardian Life Insurance Company of America et al., No. 16-568, N.D. Ala., 2017 U.S. Dist. LEXIS 176021).



Insurance Policy Does Not Bar 'Faulty Construction,' Federal Judge Concludes
SEATTLE - An insurance policy does not exclude and, thus, covers the perils "faulty construction," "faulty maintenance" and "wet or dry rot," a Washington federal judge ruled Oct. 31, granting in part summary judgment to an insured (Westridge Townhomes Owners Association v. Great American Assurance Co., et al., No. 16-1011, W.D. Wash., 2017 U.S. Dist. LEXIS 180373).



Florida Panel Reverses Dismissal Of Bad Faith Suit In Hurricane Wilma Dispute
WEST PALM BEACH, Fla. - A Florida appeals panel on Oct. 18 found that a bad faith lawsuit should not have been dismissed because the record undisputedly establishes that an insurer received an insured's civil remedies notice (CRN) in a Hurricane Wilma coverage dispute nearly four years before the insured filed its bad faith suit and responded to the CRN without challenging its service (Evergreen Lakes HOA, Inc. v. Lloyd's Underwriters at London, No. 4D16-2657, Fla. App., 4th Dist., 2017 Fla. App. LEXIS 14833).



Wisconsin Federal Judge: Insurer Breached Policy By Failing To Pay Fire Claim
MILWAUKEE - In a dispute where a state insurance fund argued that a policy above its own was reinsurance, a Wisconsin federal judge ruled Oct. 31 that an insurer breached an agreement with the fund by failing to pay a fire claim (State of Wisconsin Local Government Property Insurance Fund v. Lexington Insurance Co., et al., No. 15-142, E.D. Wis., 2017 U.S. Dist. LEXIS 180096).



Nevada High Court Majority Upholds Verdict, Judgment In Misrepresentation Suit
CARSON CITY, Nev. - The majority of a Nevada Supreme Court panel on Sept. 28 affirmed a trial court's motion for judgment in favor of an insurer and upheld a jury's award of an additional $56,000 after determining that the trial court did not abuse its discretion and that the insured failed to prove that there was any negligent misrepresentation regarding the availability of coverage (MG&S Enterprise, LLC v. Travelers Casualty Insurance Company of America, et al., No. 69622, Nev. Sup., 2017 Nev. App. Unpub. LEXIS 673).



11th Circuit Says Insurer Did Not Act In Bad Faith In Handling Of Auto Claim
ATLANTA - An insurer did not act in bad faith in its handling of settlement negotiations because no reasonable jury could conclude that the insurer's potential negligence caused a failure to settle a claim arising out of an auto accident, the 11th Circuit U.S. Court of Appeals said Oct. 10 (Dennis Lee Kemp v. USAA Casualty Insurance Co., et al., Nos. 16-15087, 16-15169, 11th Cir., 2017 U.S. App. LEXIS 19753).



Insured's Breach Of Contract, Bad Faith Suit Remanded To Pennsylvania State Court
PHILADELPHIA - A Pennsylvania federal judge on Oct. 12 remanded an insured's suit alleging claims for breach of contract and bad faith against an auto insurer and the insured's insurance agent after determining that the agent was not fraudulently joined to defeat jurisdiction (Melinda Bradley-Williams v. Agency Insurance Company of Maryland Inc., et al., No. 17-3755, E.D. Pa., 2017 U.S. Dist. LEXIS 169264).



Dismissal Of Bad Faith Claim In Auto Coverage Dispute Is Appropriate, Judge Says
ORLANDO, Fla. - A Florida federal judge on Oct. 17 dismissed an insured's bad faith counterclaim against an auto insurer because under Florida law, a bad faith claim cannot be alleged until a determination of the insured's damages has been made (Owners Insurance Co. v. Michael Berke, No. 17-1505, M.D. Fla., 2017 U.S. Dist. LEXIS 171454).



Insurer Acted In Good Faith In Handling Underinsured Motorist Claim, Judge Rules
TAMPA, Fla. - An insured failed to show that injuries he sustained in an automobile accident were permanent in nature during negotiations with his automobile insurance provider, and thus, the insurer did not act in bad faith in the handling of his claim, a federal judge in Florida ruled Oct. 13 in granting the insurer's summary judgment motion (David Duncan v. GEICO General Insurance Co., No. 17-40, M.D. Fla., 2017 U.S. Dist. LEXIS 169347).



Bad Faith Claim Alleged Against Auto Insurer Is Not Ripe For Adjudication
ORLANDO, Fla. - A Florida federal judge on Oct. 11 dismissed an insured's claim for bad faith alleged against an insurer in an auto coverage dispute after finding that the bad faith claim is not ripe for adjudication and will not be ripe for adjudication until after the insured's breach of contract claim is decided (Gordon McBride v. Liberty Mutual Fire Insurance Co., No. 17-1639, M.D. Fla., 2017 U.S. Dist. LEXIS 167901).



Auto Insurer Will Not Be Prejudiced If Bad Faith Claim Is Not Severed
SCRANTON, Pa. - An auto insurer failed to prove that it will be prejudiced if an insured's bad faith claim is tried at the same time as the insured's breach of contract claim, a Pennsylvania federal judge said Oct. 11 in denying the insurer's motion to sever and stay the claim (Sandra Mulgrew v. Government Employees Insurance Co., et al., No. 16-2217, M.D. Pa., 2017 U.S. Dist. LEXIS 167770).



Bad Faith Claim Dismissed Without Prejudice To Refile After Auto Claim Is Resolved
JACKSONVILLE, Fla. - After determining that a bad faith claim is premature, a Florida federal judge on Oct. 13 granted an insurer's motion to dismiss the bad faith claim without prejudice to the insured to refile the claim after the insured's claim for uninsured motorist benefits is resolved (Kelsa Toburen v. State Farm Mutual Automobile Insurance Co., No. 17-955, M.D. Fla., 2017 U.S. Dist. LEXIS 169642).



Evidence Supports Insured's Claims For Bad Faith Against Auto Insurer, Judge Says
SCRANTON, Pa. - An insured seeking uninsured motorist benefits for injuries sustained in a hit-and-run accident provided sufficient evidence in support of claims for bad faith against the auto insurer, a Pennsylvania federal judge said Oct. 10 in denying the insurer's motion to dismiss (Thomas Meyers, et al. v. Protective Insurance Co., No. 16-1821, M.D. Pa., 2017 U.S. Dist. LEXIS 166955).



Panel: Method Of Calculating Estimated 'Actual Cash Value' Does Not Breach Contract
ST. LOUIS - The Eighth Circuit U.S. Court Appeals on Sept. 25 found that a homeowners insurer's method of determining an insured's estimated "actual cash value" does not breach its replacement cost contract, further finding that there is no basis to certify a class of insureds who incurred "unique, individual covered losses" and no basis to sustain a special master's "burdensome classwide discovery orders" in a hailstorm coverage dispute (In re: State Farm Fire and Casualty Company, Nos. 16-3185 and 16-3562, 8th Cir., 2017 U.S. App. LEXIS 18457).



Insured Breached Cooperation Clause, Cannot Maintain Bad Faith Claims Against Insurer
LAS VEGAS - An insured's breach of an insurance policy's cooperation clause by failing to provide the insurer with needed information about a vehicle theft claim precludes the insured from alleging claims of breach of contract and bad faith against the insurer, a Nevada federal judge said Sept. 28 (Edward Stolz v. Safeco Insurance Company of America, No. 14-2060, D. Nev., 2017 U.S. Dist. LEXIS 162532).



Bad Faith Suit Over Property Insurance Claim Remanded To State Court
OXFORD, Miss. - Remand of an insurance breach of contract and bad faith lawsuit to state court is proper because an insured has shown that the amount in controversy in the action will not exceed statutory limits, a federal judge in Mississippi ruled Oct. 17 in granting the insured's motion to remand (Strawberry Missionary Baptist Church v. Church Mutual Insurance Company Foundation Inc., No. 17-155, N.D. Miss., 2017 U.S. Dist. LEXIS 171545).



Bifurcation Of Bad Faith Claim For Trial Permitted In Asbestos Coverage Dispute
NEWPORT NEWS, Va. - Bifurcation of a bad faith claim in an asbestos coverage dispute is appropriate for trial but not for discovery as the issue of coverage intertwines and overlaps with the issue of bad faith, a Virginia federal magistrate judge said Oct. 2 (Hopeman Brothers Inc. v. Continental Casualty Co., et al., No. 16-187, E.D. Va., 2017 U.S. Dist. LEXIS 164434).



Additional Insured's Bad Faith, Breach Of Contract Claims Survive Dismissal
LAS VEGAS - An additional insured sufficiently alleged breach of contract and bad faith claims against an insurer for improperly denying a construction defects claim, a Nevada federal judge ruled Sept. 29, declining to dismiss the claims (Centex Homes v. Everest National Insurance Co., et al., No. 16-01275, D. Nev., 2017 U.S. Dist. LEXIS 162687).