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®
Panel: Jury Lacked Evidence To Determine Whether Insurer Act In Bad Faith
ATLANTA - A state court jury did not have the evidence required to determine whether an insurer acted in bad faith in failing to provide its insured with the policy limits sought in an uninsured motorist claim dispute, an 11th Circuit U.S. Court of Appeals panel ruled Sept. 30 (Catherine S. Cadle v. GEICO General Insurance Co., No. 15-1128, 11th Cir.; 2016 U.S. App. LEXIS 17691).
Insured's Breach Of Contract, Bad Faith Claims Time-Barred, Judge Rules
COLUMBIA, S.C. - Because an insured failed to first preserve her claims against an underinsured motorist (UIM) before filing her insurance breach of contract and bad faith claims, those claims are barred by the applicable statute of limitations, a federal judge in South Carolina ruled Sept. 27 (Jodi A. Whitehead v. The Travelers Indemnity Company of America, No. 15-4200, D. S.C.; 2016 U.S. Dist. LEXIS 131957).
Judge: No Issue Exists Regarding Whether Insured's Diabetes Led To Amputation
SAN ANTONIO - An insurer did not breach its contract or act in bad faith in denying coverage under a term accidental death and dismemberment insurance policy because no genuine issue of material fact exists regarding whether an insured's diabetes contributed to an amputation after stepping on a nail, a federal judge in Texas ruled Oct. 3 (Randy Price v. Dearborn National Life Insurance Co., No. 15-0369, W.D. Texas; 2016 U.S. Dist. LEXIS 137289).
Policy Exclusion Bars Coverage In Underlying Suit, Judge Rules
SAN FRANCISCO - A federal judge in California on Sept. 26 granted an insurer's motion for summary judgment in an insurance bad faith lawsuit, ruling that the insurer had no duty to defend its insureds in an underlying lawsuit because the claims were barred by a policy exclusion (Sunrise Specialty Co. Inc., et al. v. Scottsdale Insurance Co., No. 16-1461, N.D. Calif.; 2016 U.S. Dist. LEXIS 131664).
Judge: Insured Failed To Provide Insurer Sufficient Notice Of Bad Faith Claim
ALBANY, Ga. - A Georgia federal judge on Sept. 30 found that an insured did not satisfy a statutory prerequisite demand requirement by failing to provide sufficient notice of a bad faith claim or litigation to its insurer before filing its initial complaint, granting the insurer's motion for summary judgment as to the bad faith claim (Foliar Nutrients Inc., et al. v. Nationwide Agribusiness Insurance Co., No. 14-75, M.D. Ga.; 2016 U.S. Dist. LEXIS 135327).
Insureds Offer Sufficient Facts To Support Their Bad Faith Claim, Judge Rules
TULSA, Okla. - Insureds have offered sufficient facts to support their claim for bad faith against their insurer in a homeowners insurance dispute, a federal judge in Oklahoma ruled Oct. 4 in denying the insurer's motion to dismiss (Larry W. Thomas, et al. v. Farmers Insurance Co., No. 16-17, N.D. Okla.; 2016 U.S. Dist. LEXIS 137564).
Insureds' Bad Faith Claim Is Not Time-Barred, Iowa Appeals Panel Concludes
DES MOINES, Iowa - A one-year contractual limitations period does not bar insureds' bad faith claim against their insurer, the Iowa Court of Appeals ruled Sept. 28, because the insureds were entitled to file a separate action after an arbitration hearing and had no knowledge that the denial of their claim was premised upon an alleged "secret" policy until the arbitration hearing (Thomas Schlapkohl and Lana Schlapkohl v. American Family Mutual Insurance Co., No. 15-1612, Iowa App.; 2016 Iowa App. LEXIS 1007).
Florida Majority Quashes Ruling, Says Court Misapplied, Misinterpreted Statutes
TALLAHASSEE, Fla. - A majority of the Florida Supreme Court held Sept. 29 that an appellate court misapplied a statutory presumption of correctness and incorrectly found that another statute requires a showing of bad faith for an insured to recover attorney fees, quashing and remanding the appellate court's ruling in a sinkhole coverage dispute (Kathy Johnson v. Omega Insurance Co., No. SC14-2124, Fla. Sup.; 2016 Fla. LEXIS 2148).
Federal Judge Denies Insured's Motion To Remand In Bad Faith Suit
DALLAS - Remand of an insurance breach of contract and bad faith lawsuit is not proper because an insured has failed to show that an adjuster is liable for any of the claims against him, a federal judge in Texas ruled Oct. 4 (Ministerio Internacional Lirios del Valle v. State Farm Lloyds, et al., No. 16-1212, N.D. Texas; 2016 U.S. Dist. LEXIS 137453).
Claims Against Insurer In Water Damage Suit Cannot Stand, Federal Judge Says
BOISE, Idaho - An insurer did not breach its contract or act in bad faith in its handling of an insured's claim for water damages, an Idaho federal judge said Sept. 30 after determining that the insured failed to provide any support that the insurer breached its contract (Kim Peck v. The Cincinnati Insurance Co., No. 14-500, D. Idaho; 2016 U.S. Dist. LEXIS 136465).
Judge Denies Insured's Summary Judgment Motion In Insurance Bad Faith Suit
NEW ORLEANS - Ruling that certain declarations sought in an insured's motion for partial summary judgment in an insurance breach of contract bad faith lawsuit "seemingly rest upon disputed factual determinations and assessments of witness credibility that remain reserved to the trier of fact - a jury," a federal judge in Louisiana on Oct. 4 denied the insured's motion (AMA Discount Inc., et al. v. Seneca Specialty Insurance Co., No. 15-2845, E.D. La.; 2016 U.S. Dist. LEXIS 137349).
No Joint Venture Between Insurer, Claims Administrator Exists, Judge Rules
PHOENIX - Plaintiffs in an insurance bad faith lawsuit have failed to show that any joint venture existed between an insurer and a third-party claims administrator, and, as a result, no bad faith claim exists, a federal judge in Arizona ruled Sept. 22 (Kenneth Ingram, et al. v. Great American Insurance Co., et al., No. 13-2265, D. Ariz.; 2016 U.S. Dist. LEXIS 130632).
Judge Dismisses Bad Faith Suit, Allows Insured To Replead ERISA Claims
FRESNO, Calif. - Dismissal of claims in an insurance breach of contract and bad faith lawsuit are proper because the claims are preempted by the Employee Retirement Income Security Act (ERISA), a federal judge in California ruled Sept. 30 (April Powell v. Unum Life Insurance Company of America, et al., No. 16-1197, E.D. Calif.; 2016 U.S. Dist. LEXIS 136311).
Federal Judge: Fact Issues As To Material Breach Preclude Summary Judgment Ruling
PITTSBURGH - A Pennsylvania federal judge on Sept. 29 granted in part and denied in part dueling motions for summary judgment filed by a glass manufacturer insured, an insurer and a reinsurer in a coverage dispute over property damage and business interruption losses arising from the insured's equipment breakdown (The Hartford Steam Boiler Inspection and Insurance Co., et al. v. International Glass Products LLC, et al., No. 08-1564, W.D. Pa.; 2016 U.S. Dist. LEXIS 135045).
Judge Awards $972,878 In Attorney Fees To Insured Over Construction Defects Suit
PHOENIX - An Arizona federal judge on Sept. 21 awarded $972,878.30 in attorney fees and costs to a contractor and a developer following their successful victory in an insurance coverage dispute concerning an underlying construction defects case (Lexington Insurance Co. v. Scott Homes Multifamily Inc. and Silverbell 290 Limited Partnership, No. 12-02119, D. Ariz.; 2016 U.S. Dist. LEXIS 128806).
7th Circuit Briefed On Whether Insurer's Info Requests Breached Policy
CHICAGO - A life insurance provider and a policy's securities intermediary filed briefs in the Seventh Circuit U.S. Court of Appeals arguing over whether a Wisconsin's anti-wagering law bars policies procured by a third party and whether the insurer's request for information in connection with a claim request constituted a breach or bad faith (Sun Life Assurance Company of Canada v. U.S. Bank National Association, as Securities Intermediary, No. 16-1049, 7th Cir.).
Judge: Reinsurers Failed To State A Claim For Relief In Breach Of Contract Suit
WASHINGTON, D.C. - Dismissal of claims in an insurance breach of contract and bad faith lawsuit is proper because reinsurers have failed to state a claim for relief against the Federal Crop Insurance Corp. (FCIC) regarding its modification of the methodology that sets crop premiums, a federal judge in Washington ruled Sept. 20 (ACE American Insurance Co., et al. v. Federal Crop Insurance Corp., et al., No. 14-1992, D. D.C.; 2016 U.S. Dist. LEXIS 128123).
Judge: Rockfall Damage Excluded From Coverage Under Insurance Policy
SALT LAKE CITY - An insurer did not act in bad faith in denying a claim for coverage under a homeowners insurance policy pursuant to the policy's earth movement exclusion for damage caused by a rockfall, a federal judge in Utah ruled Sept. 15, because the policy was not ambiguous and did not provide coverage for such an event (Western United Insurance Co., d/b/a AAA Insurance Co., v. Janelle Heighton, et al., No. 14-435, D. Utah; 2016 U.S. Dist. LEXIS 125598).
Magistrate Judge Recommends That Claims In Insurance Be Dismissed
MIAMI - Dismissal of state law claims in an insurance breach of contract lawsuit is proper because at least one of them fails as a stand-alone claim, a federal magistrate judge in Florida said on Sept. 9 recommending that a motion to dismiss be granted (Morris Hinds v. American Security Insurance Co., No. 16-20780, S.D. Fla.; 2016 U.S. Dist. LEXIS 123348).
Federal Judge: No Private Right Of Action Available On Bad Faith Claim
MEDFORD, Ore. - An insured's insurance bad faith claim is insufficient and cannot be brought pursuant to state statute because the statute does not recognize a private right of action for the claim, a federal judge in Oregon ruled Sept. 13 (Ronald Lennon, et al. v. State Farm Fire & Casualty Insurance Co., No. 16-1041, D. Ore.; 2016 U.S. Dist. LEXIS 124767).
Judge: Insureds Conceded They Are Not Entitled To Defense In Insurance Dispute
TULSA, Okla. - An insurer is entitled to judgment on the pleadings on claims that it failed to properly provide a defense for insureds under the terms of a homeowners insurance policy because the insureds conceded that they were not entitled to a defense for the claims made against them, a federal judge in Oklahoma ruled Sept. 20 (Delilah M. Paul, et al. v. CSAA Fire & Casualty Insurance Co., et al., No. 15-712, N.D. Okla.; 2016 U.S. Dist. LEXIS 127165).
New York Federal Judge Dismisses Claims Against Insurer In Mold Coverage Dispute
CENTRAL ISLIP, N.Y. - A New York federal judge on Sept. 8 granted an insurer's motion to dismiss claims stemming from the insurer's denial of coverage for mold damage after determining that the current owner of the property was not listed as an insured on the policy, as required under New York law, and the former owner, who was listed as an insured on the policy, no longer had an insurable interest in the property (Mikael Mikaelian, et al. v. Liberty Mutual Insurance Co., No. 15-6182, E.D. N.Y.; 2016 U.S. Dist. LEXIS 121561).
Insurer Appeals Attorney Fee Award For Bad Faith Denial Of Hurricane Irene Damage
RICHMOND, Va. - A federal flood insurer on Sept. 6 filed a notice of appeal in the Fourth Circuit U.S. Court of Appeals from a lower court's $63,962.50 attorney fee award in favor of insureds for its bad faith denial of their Hurricane Irene flood damage claim (Gary Woodson, et al. v. Allstate Insurance Co., No. 16-2018, 4th Cir.).
Judge: No Valid Lack Of Reasonable Basis Argument Made In Bad Faith Suit
PHILADELPHIA - A federal judge in Pennsylvania granted an insurer's motion to dismiss claims in an insurance bad faith lawsuit on Sept. 15, ruling that an insured failed to show that the insurer lacked a reasonable basis for denying her claim for underinsured motorists (UIM) benefits (Linda Murphy v. State Farm Mutual Automobile Insurance Co., No. 16-2922, E.D. Pa.; 2016 U.S. Dist. LEXIS 125841).
Magistrate Judge Grants Insurer's Motion To Bifurcate Insurance Bad Faith Claim
ALBUQUERQUE, N.M. - A federal magistrate judge in New Mexico on Sept. 13 granted an insurer's motion to bifurcate a bad faith claim in an insurance dispute, ruling that an insured has brought her bad faith failure-to-pay claim against an insurer without first establishing that she is legally entitled to recover damages from an underinsured motorist (UIM) under the terms of an automobile insurance policy (Joann Ortiz v. Safeco Insurance Company of America, No. 16-739, D. N.M.; 2016 U.S. Dist. LEXIS 123718).
Arizona Federal Judge: No Duty To Defend, Indemnify City For Asbestos Claim
PHOENIX - Excess and umbrella insurers have no duty to defend or indemnify the City of Phoenix for the settlement of an asbestos bodily injury claim because when the amount of defense costs is allocated across the effective policy periods, the costs do not exceed the city's self-insured retained limit, an Arizona federal judge said Sept. 2 (City of Phoenix v. First State Insurance Co., et al., No. 15-00511, D. Ariz.; 2016 U.S. Dist. LEXIS 119024).
Diocese's Insurer Asks 2nd Circuit To Reverse Discovery, Breach Of Contract Rulings
NEW YORK - An insurer filed a notice of appeal on Aug. 29 in the Second Circuit U.S. Court of Appeals, seeking reversal of a lower federal court's $945,265.11 breach of contract judgment against it and an earlier discovery ruling in a dispute over coverage stemming from underlying sexual misconduct cases brought against its diocese insured (Hartford Roman Catholic Diocesan Corp. v. Interstate Fire & Casualty Co., No. 16-2999, 2nd Cir.).
Insurer Breached Contract In Handling Of Insured's Prior Claims, Judge Rules
COLUMBIA, S.C. - Although an insured has properly pleaded its insurance bad faith and breach of contract claims against its insurer regarding the insurer's actions in an underlying lawsuit and its handling of prior claims, the insured failed to state its breach of contract claim regarding its handling of the prior claims, a federal judge in South Carolina ruled Sept. 14 (Agape Senior Primary Care Inc. v. Evanston Insurance Co., No. 16-1610, D. S.C.; 2016 U.S. Dist. LEXIS 124533).
Judge Declines Insurer's Dismissal Motion, Rules That Argument Is Vague
DALLAS - A federal judge in Texas on Sept. 15 denied an insurer's motions to dismiss and for summary judgment in an insurance breach of contract and bad faith lawsuit, ruling that the insurer failed to plead, in detail, each of an insured's claims it seeks to dismiss (David Giboney v. Allstate Vehicle and Property Insurance Co., No. 15-3073, N.D. Texas; 2016 U.S. Dist. LEXIS 125440).
Insured Did Not Comply With Terms Of Insurance Policy, Federal Judge Rules
HOUSTON - An insured is not entitled to coverage under a one-year casualty insurance policy for losses as the result of a burglary because the insured failed to pay the premium by the required deadline, failed to disclose that he has filed similar claims under the terms of a previous policy and failed to properly maintain his business's security system, a federal judge in Texas ruled Sept. 22 (Perfit Vision, et al. v. Mount Vernon Fire Insurance Co., No. 15-408, S.D. Texas; 2016 U.S. Dist. LEXIS 129865).
Federal Magistrate Denies Summary Judgment Motion In Insurance Bad Faith Case
MIAMI - A Florida federal magistrate judge on Aug. 31 denied an insurer's motion for summary judgment in an insurance bad faith action brought by a restaurant franchise because the franchise demonstrated the existence of fact issues that require the action to proceed to trial (Chicken Kitchen USA. LLC v. Maiden Specialty Insurance Company, No. 14-23282-CIV-GOODMAN, S.D. Fla.; 2016 U.S. Dist. LEXIS 117430).
Homeowners Insurance Policy Provision 'Unlawfully More Restrictive,' Judge Rules
CHARLESTON, W.Va. - Ruling on a topic not yet decided by the West Virginia Supreme Court of Appeals, a federal judge in West Virginia on Aug. 30 determined that insureds are entitled to summary judgment on their breach of contract claim in a bad faith lawsuit because an insurer breached its contract with insureds by inserting an "unlawfully more restrictive" residence premises provision into a homeowners insurance policy (William Shank v. Safeco Insurance Company of America, No. 15-9033, S.D. W.Va.; 2016 U.S. Dist. LEXIS 116367).
Judge: Insurer's Failure To Provide Proof Of Loss Caused Delay In Payment
ASHLAND, Ky. - An insurer is entitled to judgment as a matter of law in an insurance breach of contract and bad faith lawsuit because insureds failed to show that the insurer breached the terms of a homeowners insurance policy by failing to pay on claims within 30 days of receiving the proof of loss, a federal judge in Kentucky ruled Sept. 7 (Billie W. Hamm v. American Bankers Insurance Co. of Florida, No. 14-39, E.D. Ky.; 2016 U.S. Dist. LEXIS 120567).
Judge: Attorney Fee Award Sends Message That Bad Faith Denials Will Not Be Tolerated
ELIZABETH CITY, N.C. - A North Carolina federal judge on Aug. 23 found that insureds' request of $63,962.50 in attorney fees is reasonable, reiterating that a Hurricane Irene coverage dispute is a rare instance of a bad faith denial for which the important goal of sending a strong message that bad faith denials will not be tolerated is best served by awarding atypical attorney fees (Gary Woodson, et al. v. Allstate Insurance Co., No. 13-21, E.D. N.C., Northern Div.; 2016 U.S. Dist. LEXIS 112098).
Judge: Insureds Properly Pleaded Bad Faith Allegation In Amended Complaint
MILWAUKEE - A federal judge in Wisconsin on Sept. 2 denied an insurer's motion to dismiss in an insurance bad faith lawsuit, ruling that the insureds' inclusion of a letter in their amended complaint that properly spelled out the terms of their bad faith claim does not "inherently" contradict the bad faith allegations made by the insureds in their amended complaint (Elizabeth Baires, et al. v. State Farm Mutual Automobile Insurance Co., No. 16-402, E.D. Wis.; 2016 U.S. Dist. LEXIS 119155).
Judge: Insurer Did Not Act In Bad Faith In Not Paying Full Benefits To Insured
LAS VEGAS - An insurer did not act in bad faith in failing to pay an insured the policy limits under the underinsured motorist (UIM) provision of an automobile insurance policy because the insured had received payments from workers' compensation for his injuries that were deducted from the insurance payment, a federal judge in Nevada ruled Sept. 7 in granting the insurer's motion for reconsideration (Jose R. Luna v. State Farm Mutual Automobile Insurance Co., No. 15-1104, D. Nev.; 2016 U.S. Dist. LEXIS 120598).
Judge Denies Insured's Motion To Remand Bad Faith Suit To State Court
LAS VEGAS - An insurer's removal of an insurance breach of contract and bad faith lawsuit to federal court was timely, and the insurer proved that the amount in controversy exceeded statutory limits, a federal judge in Nevada ruled Aug. 30 in denying an insured's motion to remand (Susan R. Montoya v. State Farm Mutual Automobile Insurance Co., No. 16-1530, D. Nev.; 2016 U.S. Dist. LEXIS 116434).
11th Circuit Set To Hear Bad Faith Claims Against GEICO In Accident Case
ATLANTA - The 11th Circuit U.S. Court of Appeals has been asked to determine whether a federal judge erred in granting GEICO General Insurance Co. summary judgment in a case in which it offered to pay $14,104 to an accident victim who brought a bad faith action against the insurer for failing to pay the full uninsured motorist (UM) benefit in her insurance policy (Ethel Cousin v. GEICO General Insurance Co., No. 16-10113, 11th Cir.).
Federal Judge Partially Dismisses Bad Faith Claim In Insurance Dispute
WILLIAMSPORT, Pa. - A federal judge in Pennsylvania on Aug. 29 granted in part and denied in part an insurer's motion to dismiss in an insurance breach of contract and bad faith lawsuit, ruling that Pennsylvania does not provide for recovery for bad faith claims made pursuant to the Pennsylvania Unfair Insurance Practices Act (UIPA) (Ronald E. Long v. Stonebridge Life Insurance Co., No. 16-0139, C.D. Pa.; 2016 U.S. Dist. LEXIS 115324).
Bad Faith Claims Brought Pursuant To Unfair Insurance Practices Law Dismissed
WILLIAMSPORT, Pa. - Although an insured has properly pleaded his claim for insurance bad faith, he has failed to do so with regard to claims made under the Pennsylvania Unfair Insurance Practices Act (UIPA) because Pennsylvania does not provide for recovery for such claims, a federal judge in Pennsylvania ruled Aug. 29 (Ronald E. Long v. Hartford Life and Accident Insurance Co., No. 16-0138, M.D. Pa.; 2016 U.S. Dist. LEXIS 115328).
Judge: Bad Faith Suit Subject To Stay Pending Workers' Compensation Action
RUTLAND, Vt. - An insured's bad faith lawsuit against her former employer's workers' compensation insurance provider is subject to the primary jurisdiction doctrine and, thus, is subject to a stay pending the outcome of the insured's workers' compensation proceedings with the Vermont Department of Labor (DOL), a federal judge in Vermont ruled Aug. 26 (Annemieke Graven Meau v. Sentry Casualty Co., No. 15-67, D. Vt.; 2016 U.S. Dist. LEXIS 113653).
Judge Awards Insurer More Than $53,000 In Long-Term Disability Payments
WORCESTER, Mass. - Although a federal judge in Massachusetts expressed concerns with how an estimate of overpayment of long-term disability payments was reached and how "narrow a view" an instruction on remand was regarding allocation of permanent scarring benefits in a related personal injury settlement, the judge on Aug. 25 ruled that an insurer was entitled to recovery of $53,292.80 in benefit overpayment from its insured in an insurance breach of contract and bad faith lawsuit (Rachel C. Sugalski v. The Paul Revere Life Insurance Co., No. 14-40015, D. Mass.; 2016 U.S. Dist. LEXIS 113016).
Insured's Failure To Comply With Proof Of Loss Appears 'Willful,' Judge Says
CAMDEN, N.J. - A New Jersey federal judge on Aug. 25 granted an insurer's motion for summary judgment on an ambulance owner insured's amended complaint arising from Superstorm Sandy damage, finding that the insured's failure to comply with the policy's proof-of-loss requirement is fatal to its breach of contract and bad faith claims (Sea Bright First Aid Squad Inc. v. Arch Insurance Co., No. 14-1447, D. N.J.; 2016 U.S. Dist. LEXIS 113811).
Texas High Court Agrees To Hear Dispute Over Insured Vs. Insured Exclusion
AUSTIN, Texas - The Texas Supreme Court granted a directors and officers liability insurer's petition to review an appeals court's finding that an insured vs. insured policy exclusion is inapplicable, according to its orders pronounced Sept. 2 (Great American Insurance Co. v. Robert Primo, No. 15-0317, Texas Sup.).