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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®



 



10th Circuit Majority Says Insureds Failed To Offer Evidence Supporting Claims
DENVER - The majority of the 10th Circuit U.S. Court of Appeals on June 27 affirmed a district court's summary judgment ruling in favor of an insurer after finding that the insureds failed to present sufficient evidence in support of their claims for emotional distress, economic loss and attorney fees (Alan Blakely, et al. v. USAA Casualty Insurance Co., No. 15-4059, 10th Cir., 2017 U.S. App. LEXIS 11400).



Insureds Failed To State Bad Faith Claim Against Insurer, Judge Rules
HARRISON, Ark. - Insureds have failed to state a claim for relief in making their insurance bad faith claim against their homeowners insurance provider, a federal judge in Arkansas ruled June 22 in granting the insurer's motion to dismiss (Jon Lee, et al. v. State Farm Fire & Casualty Co., No. 17-3024, W.D. Ark., 2017 U.S. Dist. LEXIS 97754).



Insured Failed To Prove Attorney-Client Privilege Was Waived By Insurer
LAS VEGAS - A Nevada federal magistrate judge on June 22 denied an insured's motion to compel an insurer to produce reports and letters from one of its attorneys after determining that the insured failed to prove that the insurer's alleged bad faith conduct warrants a finding that the insurer impliedly waived the attorney-client privilege (Kirsten Spargo v. State Farm Fire and Casualty Company, No. 16-3036, D. Nev., 2017 U.S. Dist. LEXIS 96823).



Judge Allows Claims For Violation Of Nevada Law Against State Farm To Proceed
LAS VEGAS - A Nevada federal judge on June 20 dismissed the majority of claims asserted by an insured who asserts causes of action related to an insurer's alleged practice of applying a reduced cash value for vehicles that are a total loss, but allowed her claims under Nevada law to proceed (Luz Elena Cuadros v. State Farm Fire and Casualty Co., No. 16-2025, D. Nev., 2017 U.S. Dist. LEXIS 95384).



State Appeals Court Asked To Decide Whether Bad Faith Suit Dismissal Was Proper
CARSON CITY, Nev. - Parties in an insurance breach of contract and bad faith lawsuit asked the Nevada Court of Appeals recently to determine whether a trial court erred in granting summary judgment in favor of an insurer in an automobile insurance dispute and whether the trial court improperly denied the insured's motion for leave to file a third amended complaint (Valgene Sutherland v. State Farm Mutual Automobile Insurance Co., No. 71389, Nev. App.).



Insurer: Fla. Appellate Court Misapplied Key Legal Principles In Bad Faith Suit
TALLAHASSEE, Fla. - A Florida appellate court erred in reversing a jury's verdict in favor of an insured in a bad faith lawsuit, because it misapplied "well-settled principles of directed verdict law" in ruling that the insurer did not act in bad faith in failing to reach a settlement with a third party that ended up resulting in an excess verdict against the insured, the insured argues in a June 29 merits brief filed in the Florida Supreme Court (James M. Harvey v. GEICO General Insurance Co., No. SC17-85, Fla. Sup.).



9th Circuit Affirms Ruling In Insurer's Favor In Coverage Dispute Over Theft
SAN FRANCISCO - Finding that an insured's argument on appeal is waived because it never presented it to the lower court, the Ninth Circuit U.S. Court of Appeals on June 26 affirmed a lower federal court's summary judgment ruling in favor of a business owners insurer (Pacific Enterprises LLC v. AMCO Insurance Co., et al., No. 15-16042, 9th Cir., 2017 U.S. App. LEXIS 11319).



Panel: Professional Services Exclusion Bars Coverage For Suits Over Ponzi Scheme
ATLANTA - The 11th Circuit U.S. Court of Appeals on July 5 affirmed a lower federal court's finding that a professional services exclusion in both primary and excess executive organization liability insurance policies precludes coverage for underlying lawsuits arising from a Ponzi scheme (Herbert Stettin, et al. v. National Union Fire Insurance Company of Pittsburgh, Pa, et al., No. 15-14716., 11th Cir., 2017 U.S. App. LEXIS 11972).



California Federal Judge Denies Motion To Dismiss Counterclaims In Sewage Suit
LOS ANGELES - A California federal judge on June 23 denied a motion to dismiss bad faith counterclaims against an insurer in a coverage dispute arising out of a sewage spill after determining that the counterclaims sufficiently allege facts in support of the claims (Travelers Property Casualty Company of America v. Mountain Movers Engineering Contactors Inc., No. 16-2127, S.D. Calif., 2017 U.S. Dist. LEXIS 97731).



Judge Dismisses Bad Faith Claim In Suit Challenging Life Insurance Calculations
PHILADELPHIA - A Pennsylvania federal judge on June 26 granted a life insurer's motion to dismiss a bad faith claim and the majority of the breach of contract claims in an insured's lawsuit challenging the methods by which the insurer calculated the cost of insurance rates (Kalodner v. Genworth Life and Annuity Insurance Co., No. 16-4817, E.D. Pa., 2017 U.S. Dist. LEXIS 97990).



Judge: Insurer Did Not Act In Bad Faith In Delegating Employer Trust To Reinsurer
CHICAGO - A contract placed no limits on an insurer's discretion to assign its responsibility to an employer's trust and contained no requirements for disclosure of any assignments, an Illinois federal judge ruled July 5, finding that the insurer did not act in bad faith when it delegated to a reinsurer (Midco International Inc. and Employees Profit Sharing Trust v. Metropolitan Life Insurance Co., No. 14-9470, N.D. Ill., 2017 U.S. Dist. LEXIS 103296).



9th Circuit Panel Upholds Court's Bad Faith Ruling In Auto Coverage Suit
PASADENA, Calif. - A federal district court did not err in denying an insurer's motion for judgment as a matter of law on an insurance bad faith claim because a reasonable jury could have determined that the insurer had a reasonable opportunity to settle the claims against its insured, a Ninth Circuit U.S. Court of Appeals panel ruled June 15 in affirming (Carlos Madrigal, et al. v. Allstate Indemnity Co., Nos. 16-55839 and 16-55863, 9th Cir.).



California Appeals Panel Says Issue Of Fact Exists On Insurer's Denial Of Coverage
SANTA ANA, Calif. - The Fourth District California Court of Appeal on June 19 reversed a summary judgment ruling entered in favor of an insurer after determining that a genuine issue of material fact exists as to whether the insurer's refusal to cover an insured's epidural injections for injuries sustained in an automobile accident was reasonable (Carmen Zubillaga v. Allstate Indemnity Co., No. G052603, Calif. App., 4th Dist., Div. 3, 2017 Cal. App. LEXIS 562).



Panel: Court Did Not Err In Dismissing Bad Faith Claim In Coverage Dispute
SAN FRANCISCO - A federal district court did not err in granting an insurer's motion for summary judgment on an insured's claim for insurance bad faith because the insured failed to plead any genuine issues of material facts to support the claim, a Ninth Circuit U.S. Court of Appeals panel ruled June 19 in affirming (Jesse Kalberer v. American Family Mutual Insurance Co., No. 14-17220, 9th Cir., 2017 U.S. App. LEXIS 10779).



California Federal Judge Says Bad Faith Claims Are Not Duplicative Of Each Other
SAN DIEGO - A California federal judge on June 9 denied a motion to dismiss a life insurance beneficiary's claims of bad faith alleged against two insurers after determining that the beneficiary alleged sufficient facts in support of the claims (Mehdi Vossoughi v. AIG Property Casualty Company et al., No. 17-0247, S.D. Calif., 2017 U.S. Dist. LEXIS 89206).



Judge Grants Insurer's Summary Judgment Motion On Bad Faith Claim
MUSKOGEE, Okla. - An insured failed to show that material issues of fact exist as to whether his insurer acted in bad faith in denying his claim for coverage under the terms of a commercial property insurance policy and, as a result, is not entitled to punitive damages on the bad faith claim, a federal judge in Oklahoma ruled June 20 in granting in part the insurer's motion for summary judgment (Billy Hamilton v. Northfield Insurance Co., No. 16-519, E.D. Okla., 2017 U.S. Dist. LEXIS 94672).



Federal Judge Won't Dismiss Insurer From Bad Faith Suit Over Storm Damage Claim
TULSA, Okla. - A federal judge in Oklahoma on June 13 denied an insurer's motion to dismiss in an insurance breach of contract and bad faith lawsuit, rejecting the insurer's claim that, at this time, it is not a party to the insurance contract at issue (Ranchers Pipe & Steel Corp. v. Ohio Security Insurance Co., et al., No. 17-0192, N.D. Okla., 2017 U.S. Dist. LEXIS 90278).



California Federal Judge Orders Insurer To Prove That Parties Are Completely Diverse
LOS ANGELES - A California federal judge on June 13 ordered an insurer to show cause as to why an insured's breach of contract and bad faith lawsuit should be litigated in federal court and not be dismissed for lack of subject matter jurisdiction (Reseda Medical Clinic, et al. v. Liberty Mutual Ins. Company, et al., No. 17-3686, C.D. Calif., 2017 U.S. Dist. LEXIS 90932).



9th Circuit Finds Jury Instructions Were Adequate For Dispute Over Coverage
SAN FRANCISCO - A Ninth Circuit U.S. Court of Appeals panel on June 16 overruled arguments from a general contractor that a jury was not properly instructed about certain exclusions included in a policy obtained from ProBuilders Specialty Insurance Co., finding that the contactor was reading the exclusions too narrowly (ProBuilders Specialty Insurance Company, RRG v. Valley Corp. B., et al., No. 14-17544, 9th Cir., 2017 U.S. App. LEXIS 10716).



Professional Services Exclusion Does Not Bar Coverage, Insured Tells 9th Circuit
SAN FRANCISCO - An insured has asked the Ninth Circuit U.S. Court of Appeals to reverse a lower federal court's finding that coverage for an underlying qui tam action brought against it under the False Claims Act (FCA) is barred because the claims arose out of its professional services (HotChalk Inc. v. Scottsdale Insurance Co., No. 16-17287, 9th Cir.).



Judge: Lawsuits Arose Out Of 'Single Scheme'; No Professional Liability Coverage Due
DENVER - A Colorado federal judge on June 12 entered a final judgment in favor of a professional liability insurer after finding that it has no duty to defend or indemnify against an underlying lawsuit alleging that its insured entered into a "kickback contract" to steer additional subcontractor work to city-employee-controlled companies (Ciber, Inc. v. Ace American Insurance Co., No. 16-1189, D. Colo., 2017 U.S. Dist. LEXIS 89895).



9th Circuit: Court Properly Dismissed Complaint Without Leave To Amend
PASADENA, Calif. - The Ninth Circuit U.S. Court of Appeals on June 13 affirmed a lower federal court's dismissal of an insured's lawsuit against its partners management liability reimbursement insurer, finding that the lower court did not abuse its discretion in denying the insured leave to amend its complaint (Cove Partners, LLC v. XL Specialty Insurance Company, No. 16-55315, 9th Cir., 2017 U.S. App. LEXIS 10504).



Texas Federal Judge Grants Insured's Motion To Remand, Dismisses Adjuster From Suit
SHERMAN, Texas - A Texas federal judge on June 20 adopted a magistrate judge's recommendation that an insured's motion to remand be denied because complete diversity of citizenship exists as the insured's complaint does not specifically allege any claims against the insurer's adjuster, who also is a resident of Texas (Max Wang v. Safeco Insurance Company of Indiana et al., No. 17-158, E.D. Texas, 2017 U.S. Dist. LEXIS 94255).



Appeals Court Dismisses Nationwide's Challenge Of Ruling Denying Discovery Stay
CHILLICOTHE, Ohio - An Ohio appeals panel on May 31 dismissed an appeal from Nationwide Mutual Fire Insurance Co.'s over the denial of its motion to stay discovery in a suit accusing a couple of intentionally setting fire to their home to collect insurance proceeds, finding that the ruling does not require the insurer to produce privileged documents (Nationwide Mutual Fire Insurance Company v. Mark Jones, et al., No. 15CA3709, Ohio App., 4th Dist., 2017 Ohio App. LEXIS 2300).



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).