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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®



 



Idaho Supreme Court Affirms Summary Judgment Ruling In Bad Faith Suit
BOISE, Idaho - In a split opinion, a majority of justices on the Idaho Supreme Court on Nov. 29 ruled that a state trial court did not err in granting an insurer's motion for summary judgment in an insurance bad faith lawsuit arising out of a claim for underinsured motorist (UIM) benefits because an insured failed to provide the necessary facts to support the "fairly debatable element" of her claim (Peggy Cedillo v. Farmers Insurance Co. of Idaho, No. 43890 2017, Idaho Sup., 2017 Ida. LEXIS 314).



11th Circuit Panel Affirms Summary Judgment Ruling In Bad Faith Suit
ATLANTA - A federal district court did not err in granting an insurer's motion for summary judgment in an insurance bad faith lawsuit because an insured failed to provide sufficient evidence that would allow a reasonable jury to determine that the insurer acted in bad faith in its investigation into a wrongful death claim, the 11th Circuit U.S. Court of Appeals ruled Nov. 29 (Gregory C. Welford v. Liberty Insurance Corp., No. 16-14054, 11th Cir., 2017 U.S. App. LEXIS 24081).



Judge: Insureds Failed To Sufficiently Plead Bad Faith Claim Against Insurer
PHILADELPHIA - Insureds in an insurance breach of contract and bad faith lawsuit against their automobile insurance provider have failed to plead the necessary facts to support their claim that their insurer acted in bad faith in the handling of the underinsured motorist (UIM) claim, a federal judge in Pennsylvania ruled Nov. 17 in granting the insurer's motion to dismiss (Edward Sherman, et al. v. State Farm Insurance Co., No. 17-4822, E.D. Pa., 2017 U.S. Dist. LEXIS 190363).



Insurer's Motion For Bifurcation In Bad Faith Suit Substantially Denied
ALBUQUERQUE, N.M. - A federal judge in New Mexico on Nov. 20 substantially denied an insurer's motion to bifurcate trial on an insured's noncontractual claims in an insurance breach of contract and bad faith lawsuit, ruling that bifurcation of the contractual claims from the noncontractual claims will be granted at trial by the judge as needed, even though all claims will be tried "before the same jury" (Claudell Hodges v. GEICO Insurance, No. 17-0960, D. N.M., 2017 U.S. Dist. LEXIS 191479).



Bad Faith Claim Cannot Be Adjudicated Until After Contract Claim Is Resolved
FORT MYERS, Fla. - A bad faith claim stemming from an auto insurance dispute must be dismissed because the claim cannot be adjudicated until after the breach of contract claim is resolved, a Florida federal judge said Nov. 27 in granting the insurer's motion to dismiss (James Robert Wadsworth, et al. v. State Farm Mutual Automobile Insurance Co., No. 17-502, M.D. Fla., 2017 U.S. Dist. LEXIS 194254).



Removal Of Bad Faith Lawsuit Not Permitted Under Statute, Judge Rules
OKLAHOMA CITY - Remand of an insurance breach of contract and bad faith lawsuit is warranted because an insurer failed to show that removal was permitted under the bad faith exception to Federal Rule of Civil Procedure 1446(c)(1), a federal judge in Oklahoma ruled Nov. 17 in remanding the action to state court (Travis B. Holman, et al. v. Coventry Health & Life Insurance Co., et al., No. 17-0886, W.D. Okla., 2017 U.S. Dist. LEXIS 190903).



Disability Income Insurer Must Produce Documents Pertaining To Claims Decision
COLUMBUS, Ohio - Following an in camera review, an Ohio federal magistrate judge on Nov. 27 granted an insured's motion to compel the production of seven documents after determining that the documents will help to determine whether the insurer acted in bad faith in its handling of the insured's disability income claim (Mukesh R. Shah, M.D. v. Metropolitan Life Insurance Co., et al., No. 16-1124, S.D. Ohio, 2017 U.S. Dist. LEXIS 194347).



Illinois Panel Affirms Judgment For Insurer, Dismisses Appeal Of Bad Faith Claim
CHICAGO - The First District Illinois Appellate Court, Sixth Division, on Nov. 17 affirmed a trial court's ruling in favor of an insurer on a breach of contract claim but dismissed the insured's appeal as it pertained to the trial court's ruling on the bad faith claim because the insured failed to cite any legal authority in her brief regarding the bad faith claim (Carolyn Anderson v. Allstate Indemnity Co., No. 1-16-2043, Ill. App., 1st Dist., 6th Div., 2017 Ill. App. Unpub. LEXIS 2357).



No Evidence Offered To Support Breach Of Contract, Bad Faith Claims, Federal Judge Says
SHERMAN, Texas - Because insureds failed to offer evidence supporting their claims for breach of contract and bad faith arising out of an insurer's denial of coverage for a water damage claim, a Texas federal judge on Nov. 29 granted the insurer's motion for summary judgment (Jon and Leslie Young v. Allstate Vehicle and Property Insurance Co., No. 17-87, E.D. Texas, 2017 U.S. Dist. LEXIS 196094).



New Mexico Federal Judge Says Bifurcation Of Bad Faith Counterclaims Is Warranted
ALBUQUERQUE, N.M. - A New Mexico federal judge on Nov. 22 granted an insurer's motion to bifurcate and stay discovery of extracontractual claims because the interests of judicial economy and judicial efficiency favor bifurcation as the bad faith counterclaim alleged against the life insurer is dependent upon the outcome of the insurer's declaratory judgment claim (New York Life Insurance Co. v. Roger Saul, et al., No. 17-621, D. N.M., 2017 U.S. Dist. LEXIS 193210).



Montana Federal Magistrate: Bad Faith Suit Should Be Remanded For Lack Of Diversity
BILLINGS, Mont. - A Montana federal magistrate judge on Nov. 8 recommended that an insured's motion to remand its bad faith suit against its insurer be granted because complete diversity of citizenship is lacking (Hochhalter Inc. v. Diamond State Insurance Co., et al., No. 17-30, D. Mont., 2017 U.S. Dist. LEXIS 195258).



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).