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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®



 



Panel: State Trial Court Properly Denied Summary Judgment In Bad Faith Suit
LAKE CHARLES, La. - In a split decision, a Louisiana appellate panel on Aug. 31 upheld a state court's ruling that an insurer is not entitled to summary judgment on an insured's bad faith claim, finding that the trial court failed to properly make a factual determination regarding the "reasonableness of the liability dispute" being argued (Trae Thibodeaux v. Steven Arvie Jr., et al., No. 17-625, La. App., 3rd Cir., 2017 La. App. LEXIS 15520).



Judge: Plaintiff Properly Pleaded Elements Of Insurance Bad Faith Claim
RENO, Nev. - An insurer is not entitled to judgment on the pleadings on claims that it breached its contract and acted in bad faith in its handling of an underinsured motorist claim because a plaintiff has properly pleaded the elements of her claims, a federal judge in Nevada ruled Aug. 31 in denying the insurer's motion for judgment on the pleadings (Michael Wurm, et al. v. Markel Insurance Co., No. 16-0244, D. Nev., 2017 U.S. Dist. LEXIS 140487).



Judge Dismisses Remaining Claims In Third-Party Insurance Bad Faith Suit
SAN ANTONIO - Third-party claimants may not bring a claim for insurance bad faith against an automobile insurance provider because they have failed to show that a duty under G.A. Stowers Furniture Co. v. American Indemnity Co. existed between the insurer and its insured since the claimants had failed to make any settlement demand within the insured's policy limits, a federal judge in Texas ruled Aug. 29 in granting the insurer's motion for judgment on the pleadings (Amanda Montoya, et al. v. State Farm Mutual Automobile Insurance Co., No. 16-0005, W.D. Texas, 2017 U.S. Dist. LEXIS 138991).



Pennsylvania Judge: Court Should Affirm Judgment For Insurer That Tried To Settle
PHILADELPHIA - A Philadelphia County Court of Common Pleas judge on Aug. 17 issued an opinion concluding that the Pennsylvania Superior Court should affirm a trial court's order granting an insurer's motion for summary judgment in a bad faith suit stemming from a motor vehicle accident, finding that the insurer attempted to settle and that the difference between the offer and the subsequent arbitration award is immaterial (Gregory Boleslavsky v. Travco Insurance Company, No. 151000886, Pa. Comm. Pls., Philadelphia Co., 2017 Phila. Ct. Com. Pl. LEXIS 257).



North Carolina Federal Judge: No Evidence That Insurer Refused To Pay Valid Claim
STATESVILLE, N.C. - A North Carolina federal judge on Sept. 1 dismissed a bad faith claim alleged against an insurer in an automobile coverage suit after determining that there is no evidence that the insurer recognized that the insured's claim was a valid claim under the policy and then refused to pay (New Hickory Pizza Inc., d/b/a Domino's Pizza v. TIG Insurance Co., No. 16-164, W.D. N.C., 2017 U.S. Dist. LEXIS 142091).



Judge: Insureds Did Not Show That Insurer Conducted Bad Faith Investigation
NASHVILLE, Tenn. - Insureds failed to show that their automobile insurance provider acted in bad faith or breached its contract with the insureds in its handling of an underinsured motorist claim, a federal judge in Tennessee ruled Aug. 25 in granting the insurer's motion to dismiss for failure to state a claim for relief (Hanan Endrawes, et al. v. Safeco Insurance Co., No. 17-0929, M.D. Tenn., 2017 U.S. Dist. LEXIS 137040).



Judge Dismisses Bad Faith Claim In Homeowners Insurance Coverage Dispute
PHOENIX - An insurer acted "reasonably" in its handling of an investigation of a homeowners insurance claim, and insureds have failed to show that the insurer acted in bad faith in any way, a federal judge in Arizona ruled Aug. 25 in granting in part and denying in part the insurer's motion for summary judgment in an insurance breach of contract and bad faith lawsuit (Charles Mastowski, et al. v. American National Property and Casualty Co., No. 15-1893, D. Ariz., 2017 U.S. Dist. LEXIS 136862).



No Coverage For Cracking, Crumbling Foundation, Connecticut Federal Judge Says
NEW HAVEN, Conn. - No coverage is owed for an insured's foundation damage caused by a chemical reaction because the damage was not sudden and accidental as required by the policy's exception to the collapse exclusion, a Connecticut federal judge said Aug. 29 in dismissing the insured's claims of breach of contract and bad faith (Daniel Adams v. Allstate Insurance Co., No. 16-1360, D. Conn., 2017 U.S. Dist. LEXIS 139998).



Bad Faith Claim Dismissed, Breach Of Contract Claim Stands In Coverage Dispute
NEW HAVEN, Conn. - A Connecticut federal judge on Aug. 28 held that despite the court's rejection of a homeowners insurer's coverage position regarding concrete wall cracks in the insureds' basement, the evidence on record is insufficient for a reasonable jury to find that the insurer denied the insureds' claim in bad faith (Michael Roberts v. Liberty Mutual Fire Insurance Co., No. 13-0435, D. Conn., 2017 U.S. Dist. LEXIS 137412).



Connecticut Federal Judge Finds No Coverage Owed For Foundation Damages
NEW HAVEN, Conn. - A Connecticut federal judge on Aug. 29 granted an insurer's motion to dismiss breach of contract and bad faith claims in a suit seeking coverage for a cracked foundation after determining that the cause of the foundation loss was not sudden and accidental as required for coverage to exist under the policy (Sandra Miller v. Allstate Insurance Co., No. 16-2059, D. Conn., 2017 U.S. Dist. LEXIS 140023).



Judge Finds Failing Concrete Walls Not Covered In Home's Insurance Policy
NEW HAVEN, Conn. - An insurer did not breach its contract when it refused to pay to correct structural concrete issues caused by a chemical reaction because under the policy a home's walls must actually fall, a federal judge in Connecticut held Aug. 28 (Barry Agosti, et al. v. Merrimack Mutual Fire Insurance Co., et al., No 16-1686, D. Conn., 2017 U.S. Dist. LEXIS 137411).



No Sudden Or Accidental Damage, Federal Judge Says In Dismissing Bad Faith Claim
NEW HAVEN, Conn. - No coverage is afforded for damage to the foundation walls of an insured home because the damage was not sudden and accidental as required by the terms of the policy at issue, a Connecticut federal judge said Aug. 29 in dismissing the insureds' claims for breach of contract and bad faith (Linda Clough, et al. v. Allstate Insurance Co., et al., No. 17-140, D. Conn., 2017 U.S. Dist. LEXIS 140009).



Pennsylvania Federal Judge: Insured Failed To Prove Carrier Acted In Bad Faith
PHILADELPHIA - A Pennsylvania federal judge on Aug. 25 granted an insurer's motion for partial summary judgment on a bad faith claim after determining that the insured, seeking coverage for water damages, failed to show by clear and convincing evidence that State Farm acted unreasonably in its denial of his insurance claim (Darryl Brodzinski v. State Farm Fire and Casualty Co., No. 16-6125, E.D. Pa., 2017 U.S. Dist. LEXIS 136644).



Professional Services Exclusion Bars Coverage, Pennsylvania Court Affirms
HARRISBURG, Pa. - A Pennsylvania court on Aug. 23 affirmed a lower court's finding that an insurer has no duty to defend or indemnify against an underlying negligence lawsuit because the allegations arise from a bodily injury that was sustained as a result of the insured's rendering of or failure to render professional services (Debra M. Campayno, et al. v. Auto-Owners Insurance, et al., No. 1210 WDA 2016, No. 1255 WDA 2016, Pa. Super., 2017 Pa. Super. Unpub. LEXIS 3195).



Federal Judge Refuses To Reconsider Ruling In Equitable Indemnification Dispute
SACRAMENTO, Calif. - A California federal judge on Aug. 21 denied an insurer's motion to reconsider the court's denial of its summary judgment motion in an equitable indemnification dispute between it and another insurer (Public Service Mutual Insurance Co. v. Liberty Surplus Insurance Corp., No. 14-00226, E.D. Calif., 2017 U.S. Dist. LEXIS 134339).



Federal Magistrate: Claims That Insured Failed To Pay Wages Do Not Trigger Coverage
SAN JOSE, Calif. - A California federal magistrate judge on Aug. 31 held that a professional liability insurer owes no coverage for underlying class action claims alleging that its staffing services company insured failed to pay wages (W.G. Hall, LLC v. Zurich American Insurance Co., No. 17-00646, N.D. Calif., 2017 U.S. Dist. LEXIS 141389).



Punitive Damages Award Upheld; Award Justified Based On Insurer's Deceit
ST. LOUIS - A jury's award of $2.75 million in favor of a plaintiff who was injured while a passenger in an insured vehicle was not excessive and was justified based on the jury's finding that the insurer deceived the passenger regarding coverage on the insured vehicle, the Eighth Circuit U.S. Court of Appeals said Aug. 15 (Laura Dziadek v. The Charter Oak Fire Insurance Co., Nos. 16-4070, 16-4210, 8th Cir., 2017 U.S. App. LEXIS 15270).



Insured Stated Plausible Claim For Bad Faith, Oklahoma Federal Judge Says
TULSA, Okla. - An Oklahoma federal judge on Aug. 18 denied an insurer's motion to dismiss an insured's bad faith counterclaim in a dispute over uninsured motorist benefits after determining that the insured stated a plausible claim for bad faith under Oklahoma law (Massachusetts Bay Insurance Co. v. Curtis Scott Langager, No. 16-685, N.D. Okla., 2017 U.S. Dist. LEXIS 132055).



Federal Magistrate Denies Motion To Bifurcate In Auto Insurance Suit
ALBUQUERQUE, N.M. - A New Mexico federal magistrate judge on Aug. 17 refused to bifurcate a bad faith suit arising out of claim for uninsured auto benefits after determining that judicial economy is best served by allowing the claims to proceed simultaneously and that the insurer will not be prejudiced if the claims proceed simultaneously (Rita Buccheri v. GEICO Insurance Co., et al., No. 17-490, D. N.M., 2017 U.S. Dist. LEXIS 131694).



Insurer Ordered To Produce Claim Documents, Billing Records In Bad Faith Case
HATTIESBURG, Miss. - A federal magistrate judge in Mississippi on Aug. 4 ordered an insurer to produce documents and its former attorney to produce billing records related to the handling of an uninsured/underinsured motorist's claim, finding that the insurer waived its protections under attorney-client privilege and the work product doctrine (Craig Flanagan, et al. v Nationwide Property and Casualty Insurance Company, No. 2:17-cv-33-KS-MTP, S.D. Miss., Eastern Div., 2017 U.S. Dist. LEXIS 123204).



Insured: GEICO's Brief Ignores Adverse Evidence, Violates Directed Verdict Standard
TALLAHASSEE, Fla. - Replying to an insurer's answering brief of its initial appeal, an insured on Aug. 1 reiterated to the Florida Supreme Court that a Florida appellate court erred in reversing a state trial court's denial of the insurer's motion for a directed verdict in an insurance bad faith lawsuit (James M. Harvey v. GEICO General Insurance Co., No. SC17-85, Fla. Sup.).



Federal Judge Refuses To Reconsider Ruling In Credit Life Insurance Bad Faith Suit
COLUMBUS, Ohio - An Ohio federal judge on Aug. 21 denied a credit life insurer's motion for reconsideration and motion to certify questions to the Ohio Supreme Court in a breach of contract and bad faith lawsuit after determining that the insurer failed to offer any new evidence that there was any error or manifest injustice in the court's summary judgment ruling in favor of the insured (Sheela K. O'Donnell v. Financial American Life Insurance Co., No. 14-1071, S.D. Ohio, 2017 U.S. Dist. LEXIS 133377).



Insured Failed To Allege Sufficient Facts Supporting Bad Faith Claim Against Insurer
CAMDEN, N.J. - A New Jersey federal judge on Aug. 18 granted an insurer's motion to dismiss a bad faith claim in a dispute over withdrawn annuity payments after determining that the plaintiff failed to allege any specific facts supporting the claim that the insurer acted in bad faith (Janette K. Adams v. Allstate Life Insurance Co., et al., No. 16-9465, D. N.J., 2017 U.S. Dist. LEXIS 132022).



Florida Majority Reverses Ruling In Bad Faith Suit Over Sinkhole Damage
DAYTONA BEACH, Fla. - A majority of a Florida appeals panel on Aug. 11 held that no Florida statute or case law precludes an insured from filing a civil remedy notice (CRN) while a demand for appraisal is outstanding, reversing and remanding a lower court's ruling in favor of the insurer in a bad faith lawsuit arising from the insured's claim for sinkhole damage (Phillip Landers v. State Farm Florida Insurance Co., No. 5D15-4032, Fla. App., 5th Dist., 2017 Fla. App. LEXIS 11543).



9th Circuit Reverses Ruling In Water Damage Suit, Says Questions Of Fact Exist
SAN FRANCISCO - The Ninth Circuit U.S. Court of Appeals on Aug. 22 reversed and remanded a district court's ruling that no coverage is afforded for water damage to a California couple's home after determining that the lower court abused its discretion in excluding relevant evidence that, if properly considered, raises genuine issues of material fact on the breach of contract and bad faith claims alleged against the insurer (Neda Raschkovsky, et al. v. Allstate Insurance Co., No. 16-55093, 9th Cir., 2017 U.S. App. LEXIS 16006).



Federal Judge Finds Questions Of Fact Exist On Amount Of Coverage Owed
ABERDEEN, Miss. - A Mississippi federal judge on Aug. 10 denied an insurer's motion for summary judgment in a suit alleging that the insurer acted in bad faith by failing to pay the insured the full replacement cost of his home after determining that genuine issues of material fact exist regarding the insured's claim for contractual damages (James Whitfield v. Allstate Vehicle and Property Insurance Co., No. 16-51, N.D. Miss., 2017 U.S. Dist. LEXIS 127732).



Texas Federal Judge Denies Motion To Sever Insured's Extracontractual Claims
HOUSTON - A Texas federal judge on Aug. 16 denied an insurer's motion to sever an insured's extracontractual claims after determining that the insurer failed to prove that it would be prejudiced if the claims are not severed and failed to prove that judicial economy would be promoted if the claims are severed (Elizabeth Hazen v. Allstate Insurance Co., No. 16-3068, S.D. Texas, 2017 U.S. Dist. LEXIS 130416).



8th Circuit: Faulty Fire System Is Not An 'Accident' Under Insurance Policy
ST. LOUIS - Replacing drywall and insulation as a result of a subcontractor's faulty fire suppression system did not constitute an "accident" under a general liability insurance policy, the Eighth Circuit U.S. Court of Appeals held Aug. 11, affirming the dismissal of breach of contract and bad faith claims against an insurer (McShane Construction Company LLC v. Gotham Insurance Co., No. 16-2632, 8th Cir., 2017 U.S. App. LEXIS 14875).



Insured Appeals Ruling In Aviation Insurer's Favor In Bad Faith Dispute
SAN FRANCISCO - An insured has asked the Ninth Circuit U.S. Court of Appeals to reverse a lower federal court's ruling in favor of an aviation insurer in a coverage dispute arising from damage to one of the insured's tanker aircrafts (Minden Air Corporation v. Starr Indemnity & Liability Co., 16-15712, 9th Cir.).



Employer Trust Appeals No Bad Faith Ruling Over Insurer's Delegation To Reinsurer
CHICAGO - An employer's trust on Aug. 2 appealed to the Seventh Circuit U.S. Court of Appeals a ruling that an insurer did not act in bad faith when it delegated to a reinsurer its responsibility to the trust because a contract placed no limits on the insurer's ability to do so and contained no requirements for disclosure of any assignments (Midco International Inc., employees profit sharing trust v. Metropolitan Life Insurance Co., No. 17-2570, 7th Cir.).



Federal Judge Denies Untimely Filed Motion In Insurance Bad Faith Suit
SACRAMENTO, Calif. - Denial of an insurer's motion for judgment on the pleadings in an insurance bad faith lawsuit is proper because the insurer filed the motion over a year and a half after the deadline for dispositive motions, a federal judge in California ruled July 24 in denying the motion (Joanne Koegel v. Government Employees Insurance Co., No. 14-0256, E.D. Calif., 2017 U.S. Dist. LEXIS 116322).



Bad Faith Claims Alleged Against Insurer, Law Firm Will Be Tried In State Court
SANTA FE, N.M. - A bad faith lawsuit filed against an insurer and the law firm that represented the insured in an underlying personal injury suit must be remanded to New Mexico state court because complete diversity of citizenship does not exist, a federal circuit judge, sitting by designation, said July 24 (Amanda Jones Worthington, et al. v. MGA Insurance Co. Inc., et al., No. 17-498, D. N.M., 2017 U.S. Dist. LEXIS 116136).



Michigan Panel Says Insured Not Owed UIM Limits Under Auto Policy
DETROIT - The Michigan Court of Appeals on Aug. 3 found no error in a circuit court's conclusion that an insured is not entitled to the underinsured motorist limit of an auto policy for a motorcycle accident because the auto policy provides no coverage for the insured's motorcycle and the insured collected the underinsured motorist limit on a separate motorcycle policy (James V. Toder v. Progressive Michigan Insurance Co., No. 332786, Mich. App., 2017 Mich. App. LEXIS 1239).



Insurer's Motion To Dismiss Granted; Federal Judge Says Negligence Claim Not Allowed
PORTLAND, Ore. - An Oregon federal judge on July 26 granted an insurer's motion to dismiss an insured's claims for declaratory relief and negligence per se after determining that the claim for declaratory relief is not an amended claim and that the negligence per se claim is not permitted under Oregon law (Peggy Foraker v. USAA Casualty Insurance Co., No. 14-87, D. Ore., 2017 U.S. Dist. LEXIS 116895).



Auto Exclusion Bars Claims, Federal Judge Says In Dismissing Assignee's Suit
SAN DIEGO - A California federal judge on July 25 granted an insurer's motion to dismiss an assignee's complaint after determining that the breach of contract and bad faith claims alleged against the insurer could not stand because the insurer had no duty to defend or indemnify its insured in an underlying suit pursuant to the policy's auto exclusion (Zoe Bernstein v. Nautilus Insurance Co., No. 16-2883, S.D. Calif., 2017 U.S. Dist. LEXIS 116343).



Jury Could Find Insurer Acted In Bad Faith, Judge Says In Refusing Summary Judgment
TAMPA, Fla. - Denying an automobile insurer's motion for summary judgment in a bad faith lawsuit, a Florida federal judge on Aug. 4 held that a jury could find that the insurer did not handle a bodily injury claim with the same degree of care that it would have used to handle its own affairs (Richard Soricelli v. GEICO Indemnity Co., No. 16-1535, M.D. Fla., 2017 U.S. Dist. LEXIS 122950).



Appellate Court Applied Right Standard In Reversing Bad Faith Ruling, GEICO Says
TALLAHASSEE, Fla. - A Florida appellate court did not err in reversing a state trial court's denial of a motion for a directed verdict in an insurance bad faith lawsuit because the appellate court properly considered all factors presented and applied the necessary factors in ruling that an insurer was entitled to judgment as a matter of law, the insurer argues in a July 19 answering brief filed in the Florida Supreme Court (James M. Harvey v. GEICO General Insurance Co., No. SC17-85, Fla. Sup.).



Federal Judge Dismisses Disability-Related Coverage Claims As Time-Barred
SAN DIEGO - A California federal judge on Aug. 3 granted an insurer's motion to dismiss claims for breach of contract and fraud in relation to its denial of long-term disability (LTD) benefits for a university employee, finding that all of the employee's claims were untimely (Laurel Davis v. Liberty Life Assurance Company of Boston, No. 3:17-cv-00738, S.D. Calif., 2017 U.S. Dist. LEXIS 122776).



Arizona Federal Judge Denies Motion To Remand Insured's Bad Faith Suit
PHOENIX - An Arizona federal judge on Aug. 4 denied an insured's motion to remand after determining that the insurer has shown by a preponderance of the evidence that the amount in controversy exceeds the federal jurisdictional minimum of $75,000 (Ziva Hoarau v. Safeco Insurance Company of America, No. 17-1594, D. Ariz., 2017 U.S. Dist. LEXIS 123059).



Oklahoma Federal Judge: No Evidence Supports Breach Of Contract, Bad Faith Claims
OKLAHOMA CITY - An Oklahoma federal judge on July 26 granted an insurer's motion for summary judgment after determining that the insured failed to present any evidence that the insurer breached its contract or delayed payment for a vandalism claim in bad faith (Karen Sue Sperling v. CSAA Fire & Casualty Insurance Co., No. 16-101, N.D. Okla., 2017 U.S. Dist. LEXIS 116823).



Judge Grants Motion To Bifurcate Trial And To Hold Bad Faith Issues In Abeyance
LOUISVILLE, Ky. - A Kentucky federal judge on July 18 granted an insurer's motion to bifurcate an insured's bad faith counterclaim from other claims in a hailstorm coverage dispute and to hold the discovery of bad faith issues in abeyance pending the resolution of the other claims (Employers Mutual Casualty Co. v. SG&D Ventures LLC, No. 17-00105, W.D. Ky., 2017 U.S. Dist. LEXIS 111956).



Panel: Insurer Has No Duty To Defend, Indemnify $7M Wrongful Death Judgment
SEATTLE - The Ninth Circuit U.S. Court of Appeals on July 26 affirmed a lower federal court's ruling that a homeowners insurer has no duty to defend or indemnify an underlying $7 million judgment awarded in a wrongful death lawsuit brought against the estate of its insured (Western National Assurance Co. v. Sally Wipf, et al., No. 15-35071, 9th Cir., 2017 U.S. App. LEXIS 13532).



Kentucky Panel Affirms Dismissal Of Third-Party Bad Faith Claim In Malpractice Suit
FRANKFORT, Ky. - A Kentucky appeals panel on July 21 affirmed a lower court's grant of summary judgment in favor of a professional liability insurer in a lawsuit alleging that the insurer breached its duty to deal in good faith with a third party who sued its doctor insured for medical malpractice (Deborah Lemaster v. Medical Protective Insurance Services, Inc., No. 2016-CA-000826, Ky. App., 2017 Ky. App. Unpub. LEXIS 534).



Policyholders Seek Right To Sue For Financial Elder Abuse Under Oregon Law
SALEM, Ore. - An insurer is not exempt from liability under Oregon state law for civil financial elder abuse, individuals who have purchased long-term care insurance policies from Bankers Life and Casualty Co. claim in a May 10 opening brief filed in the Oregon Supreme Court (Lorraine Bates, et al. v. Bankers Life and Casualty Company, et al., No. CA S064742, Ore. Sup.).