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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®



 



Judge: Insurer Breached Insurance Policy, But Reading Of Policy Was Reasonable
SEATTLE - A federal judge in Washington on Nov. 18 granted in part and denied in part competing motions for summary judgment in an insurance breach of contract and bad faith lawsuit, ruling that although an insurer breached its contract with its insureds under a homeowners insurance policy, its reading of the policy was reasonable (Noah Baskett, et al. v. Country Mutual Insurance Co., No. 15-1317, W.D. Wash.; 2016 U.S. Dist. LEXIS 160449).



Judge Allows Insured To Add Wife As Indispensable Party In Bad Faith Suit
PHILADELPHIA - A federal judge in Pennsylvania on Nov. 21 rejected an insurer's motion to dismiss in an insurance breach of contract and bad faith lawsuit for failure to join an indispensable party, allowing an insured to amend his complaint to add his wife as a plaintiff (William Koepke v. Allstate Vehicle & Property Insurance Co., No. 16-4633, E.D. Pa.; 2016 U.S. Dist. LEXIS 161112).



Judge: Amount In Controversy In Bad Faith Suit Doesn't Meet Removal Requirement
PHOENIX - Remand of an insurance breach of contract and bad faith lawsuit to state court is proper because an insurer failed to show that the amount in controversy in the action exceeds statutory requirements for removal, a federal judge in Arizona ruled Nov. 16 (Ray Romero, et al. v. Mendota Insurance Co., et al., No. 16-3149, D. Ariz.; 2016 U.S. Dist. LEXIS 158651).



Damages Demand Shows Amount In Controversy Is Met In Bad Faith Suit, Judge Rules
SACRAMENTO, Calif. - An insured's damages demand in her statement of damages in an insurance breach of contract and bad faith lawsuit constitutes sufficient evidence that the amount in controversy has been met, a federal judge in California ruled Nov. 16 in denying the insured's motion to remand (Beth Wheeler v. United Financial Casualty Co., No. 16-1875, E.D. Calif.; 2016 U.S. Dist. LEXIS 158907).



Judge Denies Insured's Request To Amend Complaint As Untimely In Bad Faith Suit
TULSA, Okla. - An insured's request for leave to amend his complaint to add a claim for declaratory relief is untimely because the deadline to file such a claim had passed nearly eight months before filing the request, a federal judge in Oklahoma ruled Nov. 14 (Ruben Hernandez v. State Farm Automobile Insurance Co., No. 16-0014, N.D. Okla.; 2016 U.S. Dist. LEXIS 157093).



Amount In Controversy In Bad Faith Suit Doesn't Exceed $75,000, Judge Rules
LOS ANGELES - On his own motion, a federal judge in California on Nov. 17 remanded an insurance breach of contract and bad faith lawsuit to state court, ruling that an insurer failed to show that the amount in controversy exceeded the statutory requirement (Maria L. Monroy, et al. v. Infinity Insurance Co., et al., No. 16-5296, C.D. Calif.; 2016 U.S. Dist. LEXIS 159591).



Panel: Settlement Agreement Made In Bad Faith, Cannot Be Enforced Against Insurer
ATLANTA - The 11th Circuit U.S. Court of Appeals on Nov. 17 held that a lower federal court properly applied the appropriate framework to determine whether an underlying settlement agreement could be enforced against an insurer, further affirming the lower court's finding that bad faith in the negotiation of the settlement agreement rested on substantial evidence (Orline Sidman, et al. v. Travelers Casualty and Surety, No. 15-15197, 11th Cir.; 2016 U.S. App. LEXIS 20580).



Louisiana Panel Affirms Ruling Granting Exception Of Res Judicata In Bad Faith Suit
NEW ORLEANS - A Louisiana appeals panel on Nov. 16 affirmed a lower court's ruling that granted an exception of res judicata and sustained exceptions of no cause and no right of action in favor of insurance agencies in a claimant's bad faith lawsuit (Munson Fletcher d/b/a Fletcher's Auto Sales and Service v. Southern Insurance Agency, No. 2016-0238, La. App., 4th Cir.; 2016 La. App. LEXIS 2126).



Judge: State Law Bars Insurers From Indemnifying For Punitive Damages Awards
FRESNO, Calif. - An insurer is entitled to summary judgment in an insurance breach of contract and bad faith lawsuit, a federal judge in California ruled Nov. 18, because California law bars insurers from indemnifying their insureds for punitive damages awards (Paul Evert's RV Country Inc., et al. v. Universal Underwriters Insurance Co., et al., No. 15-0124, E.D. Calif.; 2016 U.S. Dist. LEXIS 160519).



Insurer's Evidence 'Overwhelms' Insured's Wind Argument, New York Justice Rules
MINEOLA, N.Y. - A New York justice on Nov. 4 dismissed an insured's breach of contract and bad faith lawsuit against its insurer in a Superstorm Sandy coverage dispute, finding that the evidence demonstrates that the damage to the insured's two Inwood, N.Y., buildings pre-existed the storm or was the result of flooding from it, which is excluded from coverage (Five Towns Mason Materials, Inc. v. Hermitage Ins. Co., No. 603021/2013, N.Y. Sup., Nassau Co.).



Panel: Plaintiffs Failed To Move To Delay Ruling On Motion On Bad Faith Claim
PORTLAND, Ore. - A federal judge did not err in granting summary judgment in favor of an insurer on an insurance bad faith claim because insureds failed to oppose summary judgment on the basis that they needed more evidence or file a Federal Rule of Civil Procedure 56(d) motion seeking more time to collect the necessary evidence, a Ninth Circuit U.S. Court of Appeals panel ruled Nov. 1 (Sonia Braun-Salinas, et al. v. American Family Insurance Group, No. 14-35369, 9th Cir.).



Judge: Insured Failed To Show That Insurer Acted In Bad Faith In Denying Claim
LAS VEGAS - An insured failed to carry his burden to provide evidence that an insurer lacked a reasonable basis to dispute the amount sought in the insured's uninsured motorist claim or that it knew or recklessly disregarded the fact that there was no reasonable basis to dispute the amount sought, a federal judge in Nevada ruled Nov. 3 in granting the insurer's partial motion for summary judgment on the insured's insurance bad faith claims (Landon Amini v. CSAA General Insurance Co., No. 15-0402, D. Nev.; 2016 U.S. Dist. LEXIS 153339).



Judge Rejects Insurer's Amount In Controversy Argument In Bad Faith Suit
LAS VEGAS - Ruling that an insurer has failed to show by a preponderance of the evidence that the amount in controversy in an insurance breach of contract and bad faith lawsuit exceeds $75,000, a federal judge in Nevada on Nov. 1 remanded the action to state court (Junette Boyden v. State Farm Mutual Automobile Insurance Co., No. 16-1876, D. Nev.; 2016 U.S. Dist. LEXIS 151204).



Judge: Insured Cannot Bring Fiduciary Duty Claim Without Asserting Bad Faith
ALBUQUERQUE, N.M. - New Mexico does not recognize a claim for breach of fiduciary duty against an insurer independent of a bad faith claim in insurance disputes, a federal judge in New Mexico ruled Nov. 9, rejecting an insured's motion for partial summary judgment and denying her motion to certify three questions pertaining to her breach of fiduciary duty claim to the state Supreme Court (Grace C. Lucero v. Allstate Insurance Co., No. 15-1098, D. N.M.; 2016 U.S. Dist. LEXIS 155279).



Judge: Insurer's Removal Of Bad Faith Suit Was Outside Statute Of Limitations
TULSA, Okla. - Remand of an insurance bad faith suit to state court is proper because an insurer's removal of the action based on diversity jurisdiction was done outside the one-year statute of limitations, a federal judge in Oklahoma ruled Oct. 27 (Sammi Higgins v. Philadelphia Indemnity Insurance Co., No. 16-0564, N.D. Okla.; 2016 U.S. Dist. LEXIS 148957).



Insured Pleaded Necessary Elements To State Bad Faith Claim, Judge Rules
SIOUX FALLS, S.D. - Although the state of South Dakota does not recognize an independent cause of action for breach of the implied covenant of good faith and fair dealing, an insured has properly pleaded a claim for bad faith against his automobile insurance provider for failing to provide him with underinsured motorist (UIM) coverage, a federal judge in South Dakota ruled Oct. 25 (Greg A. Haanen v. North Star Mutual Insurance Co., No. 16-1007, D. S.D.; 2016 U.S. Dist. LEXIS 147435).



Insurer Must Produce Attorney Billing Records In Auto Accident Contractual Suit
LAS VEGAS - An insurer's attorney billing records in an underlying lawsuit over auto accident liability claims may be material to contractual and bad faith claims in the related coverage dispute, a Nevada federal magistrate judge ruled Nov. 4, granting in part the claimants' motion to compel (Melinda Booth Dogra, et al. v. Liberty Mutual Fire Insurance Co., No. 2:14-cv-01841, D. Nev.; 2016 U.S. Dist. LEXIS 154121).



Judge: Insurers Did Not Act In Bad Faith In Failing To Pay Entire Settlement
HONOLULU - An insured has failed to show that insurers acted in bad faith in failing to pay the entire amount of a settlement in a patent infringement lawsuit pursuant to the terms of a commercial liability insurance policy, a federal judge in Hawaii ruled Oct. 21 in dismissing the insured's insurance bad faith counterclaim (The Hanover Insurance Co., et al v. Anova Food LLC, No. 14-0281, D. Hawaii; 2016 U.S. Dist. LEXIS 146114).



Claimant's Insurance Bad Faith Claim Not Redundant, Federal Judge Rules
BROOKLYN, N.Y. - A claimant has properly stated a claim for breach of the implied covenant of good faith and fair dealing in a disability benefits dispute because the claim is not redundant and "cannot be questioned that such a claim generally exists under New York law," a federal judge in New York ruled Nov. 7 in granting in part and denying in part an insurer's motion to dismiss (Barry Pastor v. Woodmere Fire District, et al., No. 16-892, E.D. N.Y.; 2016 U.S. Dist. LEXIS 154859).



Judge: Insurer's Actions During Negotiations Do Not Support Bad Faith Claim
PHILADELPHIA - A federal judge in Pennsylvania on Nov. 9 granted an insurer's motion for summary judgment in an insurance breach of contract and bad faith lawsuit, ruling that an insured failed to present any evidence to support her bad faith claim with regard to the insurer's handling of her homeowners insurance claim (Lillian Pecko v. Allstate Insurance Co., No. 16-1988, E.D. Pa.; 2016 U.S. Dist. LEXIS 155355).



Denial Of Benefits Not In Bad Faith In Insurance Dispute, Judge Rules
NEW HAVEN, Conn. - A federal judge in Connecticut on Oct. 25 ruled that insureds failed to state a claim for breach of the implied covenant of good faith and fair dealing against their homeowners insurance provider because the insurer's denial of benefits and threat to cancel their policy fail to "demonstrate the requisite bad faith" (Lynne Liston-Smith, et al. v. CSAA Fire & Casualty Insurance Co., No. 16-0510, D. Conn.; 2016 U.S. Dist. LEXIS 147165).



Claims Arising Out Of Cracked Basement Walls Will Proceed To Trial, Federal Judge Says
BRIDGEPORT, Conn. - A Connecticut federal judge on Nov. 3 denied an insurer's motion for reconsideration after determining that the insurer failed to identify any controlling decisions that were overlooked when the court determined that insureds' claims arising out of cracks discovered in their home's basement walls must proceed to trial (Stephen Belz and Karla Belz v. Peerless Insurance Co., No. 13-01315, D. Conn.; 2016 U.S. Dist. LEXIS 152493).



Parties Seek 9th Circuit Review Of Homeowners Insurance Dispute
SAN FRANCISCO - Parties in a homeowners insurance dispute have asked the Ninth Circuit U.S. Court of Appeals to determine whether an insurer was proper in denying coverage under the policy due to the insureds' failure to pay their premium, which led to their policy being canceled prior to the time coverage was sought (Robert Fuller, et al. v. Safeco Insurance Company of Oregon, No. 16-35289, 9th Cir.).



Panel: Surety Did Not Act In Bad Faith In Settling Work Contract Dispute
CINCINNATI - A surety's settlement of breach of contract claims against the state of Michigan for refusal to make final payments to a general contractor for work to a prison kitchen was not in bad faith because the surety and the contractor had shared interests, the Sixth Circuit U.S. Court of Appeals ruled Nov. 7 (Great American Insurance Co. v. E.L. Bailey & Company Inc. and Edward L. Bailey, No. 15-2149, 6th Cir.; 2016 U.S. App. LEXIS 20018).



Judge Rules On Motions To Bar Competing Expert Witnesses In Bad Faith Dispute
CHICAGO - An Illinois federal judge on Nov. 2 granted in part dueling motions to bar expert witnesses in a breach of contract and bad faith coverage dispute arising from a $14 million consent judgment entered against an insured (Ray A. Fox, by and through his guardian, Rose Fox v. Admiral Insurance Co., No. 12-8740, N.D. Ill., Eastern Div.; 2016 U.S. Dist. LEXIS 151738).



Judge: Insured's Bad Faith Evidence Enough To Survive Motion To Dismiss
OKLAHOMA CITY - Ruling that an insured has provided enough evidence to show that its insurer unreasonably and in bad faith denied coverage for water damage and vandalism to a church, a federal judge in Oklahoma on Nov. 4 denied the insurer's motion to dismiss the insurance bad faith claim against it (Calvary Baptist Church v. Church Mutual Insurance Co., No. 15-1283, W.D. Okla.; 2016 U.S. Dist. LEXIS 153318).



Plaintiff's Claim Sufficient To Survive Dismissal In Bad Faith Suit, Judge Rules
MONTGOMERY, Ala. - Beneficiaries have pleaded enough evidence for their breach of contract claim to proceed to the summary judgment stage of the litigation, a federal judge in Alabama ruled Nov. 4 in denying an insurer's motion to dismiss in an insurance breach of contract and bad faith lawsuit (Nicholas Vinson, et al. v. Metropolitan Life Insurance Co., et al., No. 15-885, M.D. Ala.; 2016 U.S. Dist. LEXIS 153369).



Judge: Insured Showed She Incurred Economic Loss To Sustain Bad Faith Claim
PASADENA, Calif. - Although a California federal court did not err in its interpretation of California insurance law, it erred in determining that the insurer failed to show that the insured incurred an economic loss as required to sustain her insurance bad faith claim against a life insurance provider, a Ninth Circuit U.S. Court of Appeals panel ruled Oct. 18 (Beverly Burton v. The Prudential Insurance Company of America, No. 14-56721, 9th Cir.; 2016 U.S. App. LEXIS 18617).



Insured Failed To Show That Insurer Breached Its Contract, Judge Rules
SEATTLE - An insured has failed to show that an insurer acted in bad faith in handling a claim for coverage pursuant to an automobile insurance policy because the insured has failed to first show that there was any breach of the insurance contract, a federal judge in Washington ruled Oct. 13 (Kristopher Crowthers v. The Travelers Indemnity Co., No. 16-606, W.D. Wash.; 2016 U.S. Dist. LEXIS 142123).



Attorney Was Improperly Joined In Bad Faith Suit, Federal Judge Rules
SAN ANTONIO - Remand of an insurance breach of contract and bad faith lawsuit to state court is not proper because an attorney was improperly joined in the litigation and, thus, must be dismissed from the action, a federal judge in Texas ruled Oct. 12 (Amanda Montoya, et al. v. State Farm Mutual Automobile Insurance Co., et al., No. 16-00005, W.D. Texas; 2016 U.S. Dist. LEXIS 141322).



Judge: Payment Of Policy Limits Does Not Constitute Breach Of Contract
PORTLAND, Ore. - An insurer did not breach its contract with its insured because the insurer timely paid the insured policy limit benefits on an uninsured motorist (UM) claim after a bench trial verdict found in favor of the insured, a federal judge in Oregon ruled Oct. 14 in granting the insurer's motion for summary judgment (Peggy Foraker v. USAA Casualty Insurance Co., No. 14-0087, D. Ore.; 2016 U.S. Dist. LEXIS 142511).



Breach Of Fiduciary Duty Claim Duplicative Of Bad Faith Claim, Judge Rules
LAS VEGAS - Ruling that an insured's breach of contract claim is duplicative of its breach of the implied duty of good faith and fair dealing claim in a workers' compensation insurance dispute, a federal judge in Nevada on Oct. 18 granted an insurer's motion for partial dismissal (Insurance Company of the State of Pennsylvania v. Three Square, No. 14-0344, D. Nev.; 2016 U.S. Dist. LEXIS 144071).



Only 2 Claims Against W.R. Grace Insurers Survive Summary Judgment
WILMINGTON, Del. - Two claimants in Libby, Mont., seeking to hold insurers of W.R. Grace & Co. liable for their asbestos injuries can pursue negligence and bad faith claims in state court against an insurer based on workers' compensation policies not covered by W.R. Grace's Chapter 11 reorganization; however, similar claims in other state court actions are barred by an injunction in W.R. Grace's case channeling asbestos claims to a trust for resolution, a Delaware federal bankruptcy judge ruled Oct. 17 (In re: W.R. Grace & Co., et al., No. 01-01139 [Ralph Hutt and Carl Osborn v. Maryland Casualty Company, No. 14-50867], [Continental Casualty Company, et al. v. Jeremy B. Carr, et al., No. 15-50766], D. Del. Bkcy.).



Judge: Lack Of Question Of Federal Law Requires Remand Of Bad Faith Suit
JACKSON, Miss. - Remand of an insurance breach of contract and bad faith lawsuit to state court is proper because an insurer failed to show that a substantial question of federal law exists, a federal judge in Mississippi ruled Oct. 9 (State of Mississippi, ex. rel. Jim Hood, Attorney General for the State of Mississippi, v. State Farm Fire and Casualty Co., No. 15-374, S.D. Miss.; 2016 U.S. Dist. LEXIS 140218).



Judge: Insurer Did Not Act In Bad Faith In Denying Coverage For Flip House
TACOMA, Wash. - An insurer has properly shown that an insured intentionally misrepresented certain material facts in his application for a landlord insurance policy in order to obtain coverage that the insurer otherwise would have not provided, a federal judge in Washington ruled Oct. 11 in granting the insurer's motion for summary judgment (Zach Minor v. Liberty Mutual Insurance Co., No. 15-5630, W.D. Wash.; 2016 U.S. Dist. LEXIS 140802).



Judge Won't Grant Summary Judgment In Insurance Bad Faith Suit
SALT LAKE CITY - Genuine issues of material fact exist as to whether an insured had actual knowledge of a superior deed of trust on property it acquired, a federal judge in Utah ruled in denying cross-motions for summary judgment in an insurance breach of contract and bad faith lawsuit on Oct. 18 (Johnsen and Allphin Properties LLC v. First American Title Insurance Co., No. 12-740, D. Utah; 2016 U.S. Dist. LEXIS 144429).



Policy's No Action Clause Not Applicable In Bad Faith Suit, Judge Rules
OKLAHOMA CITY - Dismissal of insurance breach of contract and bad faith claims against an insurer is not proper because an insurance policy's no action clause is inapplicable, a federal judge in Oklahoma said Oct. 19 (Wilbanks Securities Inc., et al. v. Scottsdale Insurance Co., et al., No. 16-294, W.D. Okla.; 2016 U.S. Dist. LEXIS 144761).



Judge: Insurer Did Not Act In Bad Faith In Dispute Over Grain Elevator Explosion
EAST ST. LOUIS, Ill. - An Illinois federal judge on Oct. 18 held that the record fails to contain sufficient concrete evidence showing that an excess insurer acted in bad faith in a coverage dispute arising from an April 27, 2010, grain elevator explosion that injured three workers (West Side Salvage Inc. v. RSUI Indemnity Co., No. 15-0442, S.D. Ill.).