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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: Insurer Did Not Act In Bad Faith During Settlement Process
NEW ORLEANS - A federal district court did not err in granting summary judgment in favor of an insured in a third-party insurance bad faith lawsuit because the third party failed to show that the insurer failed to meet its obligations to its insured as required, an 11th Circuit U.S. Court of Appeals panel ruled Feb. 1 in affirming (Norma Ines Feijoo v. GEICO General Insurance Co., No. 15-14947, 11th Cir., 2017 U.S. App. LEXIS 1759).



Insurer's Delay In Claims Offer Not Unreasonable Or In Bad Faith, Judge Rules
SCRANTON, Pa. - Insureds have failed to state a claim for relief in arguing that their automobile insurance provider acted in bad faith in delaying payment of their underinsured/uninsured motorist claims because they have not shown that the insurer's delay in making an offer or the offer amount were unreasonable, a federal judge in Pennsylvania ruled Jan. 27 (Thomas and Colleen Meyers v. Protective Insurance Co., No. 16-1821, M.D. Pa., 2017 U.S. Dist. LEXIS 11338).



Trade Associations File Amicus Brief In Support Of Insurer In Bad Faith Suit
RENO, Nev. - A federal district court did not err in finding that, without bad faith, the liability of an insurer that has breached its duty to defend is not increased beyond the limits of the policy, and the Nevada Supreme Court should answer a question posed by a federal appeals court in the affirmative, a group of trade associations of major property and casualty insurance companies argues in a Jan. 24 amicus brief filed in the Nevada Supreme Court (James Nalder, guardian ad litem on behalf of Cheyanne Nalder, et al. v. United Automobile Insurance Co., No. 70504, Nev. Sup.).



Judge: Insurer's Delay In Appraisal Process Supports Insureds' Bad Faith Claim
PHILADELPHIA - Although insureds have failed to plead their claim for breach of contract against their insurer, they have shown that the insurer's delay in taking part in a mandatory appraisal process was in bad faith, a federal judge in Pennsylvania ruled Jan. 30 in granting in part and denying in part the insurer's motion to dismiss (Charles Dagit, et al .v. Allstate Property and Casualty Insurance Co., No. 16-3843, E.D. Pa., 2017 U.S. Dist. LEXIS 12124).



Panel: Trial Court Did Not Err In Granting Summary Judgment In Bad Faith Suit
PHOENIX - An Arizona trial court did not err in granting an insurer's motion for summary judgment in an insurance bad faith lawsuit because the insurer provided sufficient evidence that it properly conducted its investigation into an insured's homeowners insurance claim, an Arizona Court of Appeals panel ruled Jan. 31 (Norma Epperson, et al. v. AAA Fire & Casualty Insurance Co., No. 1 CA-CV 15-0846, Ariz. App., Div. 1, 2017 Ariz. App. LEXIS 95).



Time-Barred Breach Of Contract Claim Dismissed In Homeowners Insurance Dispute
BROOKLYN, N.Y. - An insured's breach of contract claim against her homeowners insurance provider was filed outside the contractual and statutory limitations periods and is, thus, time-barred, while her remaining claims for insurance bad faith and declaratory relief are duplicative of the breach of contract claim, a federal judge in New York ruled Feb. 6 in granting the insurer's motion to dismiss (Gelsomnia Maniello v. State Farm Fire and Casualty Co., et al., No. 16-1598, E.D. N.Y., 2017 U.S. Dist. LEXIS 16450).



Judge: Insured Pleaded More Than 'Mere Conclusions' In Pleading Bad Faith
SIOUX FALLS, S.D. - An insured has sufficiently pleaded more than just "mere conclusions" in making his insurance bad faith claim against his homeowners insurance carrier and, thus, his claim is sufficient pursuant to Federal Rule of Civil Procedure 8(a)(2), a federal judge in South Dakota ruled Feb. 3 in denying the insurer's motion to dismiss (Steven Haney v. American Family Mutual Insurance Co., No. 16-4113, D. S.D., 2017 U.S. Dist. LEXIS 15154).



Insured Pleaded Conclusory Allegations In Making Bad Faith Claim, Judge Rules
TULSA, Okla. - An insured has only pleaded conclusory allegations in making claims that his insurer acted in bad faith in failing to pay completely for damages under a homeowners insurance policy, a federal judge in Oklahoma ruled Feb. 6 in granting in part and denying in part the insurer's motion to dismiss and granting the insured leave to amend his bad faith claim (Neil Erbe v. AAA Fire & Casualty Insurance Co., et al., No. 16-596, N.D. Okla., 2017 U.S. Dist. LEXIS 16184).



Magistrate Judge: Policy Did Not Cover Damages To Neighboring Property
SCRANTON, Pa. - Summary judgment on an insured's breach of contract and bad faith claims regarding a homeowners insurance policy is proper because the claims pertain to property not subject to the insurance policy, a federal magistrate judge in Pennsylvania ruled Feb. 6 in his report and recommendation (Andrew Porter v. Safeco Insurance Company of Illinois, No. 15-0759, M.D. Pa., 2017 U.S. Dist. LEXIS 17142).



Judge: Claims Adjuster, Employee Were Properly Joined In Bad Faith Suit
SAN ANTONIO - An insured has shown that a claims adjuster and its employee violated provisions of the Texas Insurance Code and the Texas Deceptive Trade Practices Act (DTPA) and, thus, that those defendants were properly joined in an insurance breach of contract and bad faith lawsuit, a federal judge in Texas ruled Jan. 31 in granting an insured's motion to remand the action to state court (Kris Hospitality LLC, d/b/a Days Inn, v. Tri-State Insurance Co. of Minnesota, et al., No. 16-1229, W.D. Texas, 2017 U.S. Dist. LEXIS 13532).



Panel: Insurer's Payment To Beneficiaries Was Not In Bad Faith
LUCAS, Ohio - A trial court did not err in granting partial summary judgment in favor of an insurer in an insurance breach of contract and bad faith lawsuit because the life insurance agreement was "clear and unambiguous," an Ohio appellate panel ruled Jan. 27 (Craig Harris, et al. v. Transamerica Advisors Life Insurance Co., No. 15-1252, Ohio App., 6th Dist., 2017 Ohio App. LEXIS 336).



Federal Judge Rules That Bad Faith Claims Meet Removal Guidelines
PITTSBURGH - Remand of an insurance breach of contract and bad faith lawsuit is not proper because the parties are sufficiently diverse and the plaintiffs' bad faith claim seeks damages in excess of the statutory limits, a federal judge in Pennsylvania ruled Jan. 30 in denying the plaintiffs' motion to remand and an insurer's motion to dismiss (Deborah A. Marks, et al. v. Utica First Insurance Co., No. 16-1671, W.D. Pa., 2017 U.S. Dist. LEXIS 12096).



9th Circuit: Insurer Has Duty To Defend Against Product Disparagement Claims
PASADENA, Calif. - The Ninth Circuit U.S. Court of Appeals on Jan. 27 affirmed a lower federal court's judgment against an insurer on an insured's breach of contract and bad faith claims, finding that the insurer has a duty to defend its insured against two underlying product disparagement lawsuits brought by competitors (Millennium Laboratories, Inc. v. Darwin Select Insurance Co., No. 15-55227, 9th Cir., 2017 U.S. App. LEXIS 1533).



Progressive Injury Exclusion Bars Coverage For Water Damage Suits, Judge Says
SAN FRANCISCO - A policy's continuous or progressive injury exclusion bars coverage for two underlying suits filed against an insured because the insured's repair work to address the water intrusion problems was completed more than four years before the inception of the policy, a California federal judge said Jan. 31 (Saarman Construction Ltd. v. Ironshore Specialty Insurance Co., No. 15-3548, N.D. Calif., 2017 U.S. Dist. LEXIS 13633).



Judge Denies Insurer's Partial Summary Judgment Motion In Bad Faith Suit
MONROE, La. - Genuine issues of material fact exist as to whether an insurer acted in good faith in its handling of a claim under a homeowners insurance policy, a federal judge in Louisiana ruled Jan. 18 in denying the insurer's motion for partial summary judgment (Todd Randall Wood, et al. v. Allstate Indemnity Co., No. 15-2327, W.D. La., 2017 U.S. Dist. LEXIS 6999).



Adjusters' Acts Can Be Referenced In Claims Against Insurer, Judge Rules
ALBUQUERQUE, N.M. - Although claims adjusters in an insurance breach of contract and bad faith lawsuit cannot be held liable for claims made against them since they weren't parties to the insurance contract, an insured may still assert claims describing those defendants' acts or omissions because they are relevant to the insured's claims against his insurer, a federal judge in New Mexico ruled Jan. 20 in granting the defendants' motion to dismiss in part and denying it in part (Timothy J. Sims v. First American Property & Casualty Insurance Co., et al., No. 16-0870, D. N.M.; 2017 U.S. Dist. LEXIS 9767).



Award Of Attorney Fees On Bad Faith Counterclaim Is Premature, Judge Rules
TACOMA, Wash. - An award of attorney fees in an insurance dispute is not proper because claims are outstanding, rendering the motion premature, a federal judge in Washington ruled Jan. 19 (Allstate Property and Casualty Insurance Co. v. Richard W. Giroux, et al., No. 15-5954, W.D. Wash.; 2017 U.S. Dist. LEXIS 8301).



No Coverage Owed For Damages Caused By Sewage Backup, Iowa Panel Says
DES MOINES, Iowa - A trial court did not err in granting an insurer's motion for summary judgment because the insured, seeking coverage for damages caused by a sewage backup in his home, cannot prove that he acted to his detriment when he relied on his insurance agent's representation that coverage would be afforded for the damages, the Iowa Court of Appeals said Jan. 11 (Carl Budny v. MemberSelect Insurance Co., No. 16-1189, Iowa App.; 2017 Iowa App. LEXIS 46).



Judge Rejects Insurer's Motion To Bifurcate, Stay Insurance Bad Faith Claims
PHILADELPHIA - Bifurcating and staying bad faith claims in an insurance breach of contract and bad faith lawsuit would not be convenient for the parties, prejudice an insurer or economize the litigation, a federal judge in Pennsylvania ruled Jan. 18 in denying the insurer's motion (Eizen Fineburg & McCarthy P.C. v. Ironshore Specialty Insurance Co., No. 16-2461, E.D. Pa.; 2017 U.S. Dist. LEXIS 6985).



Judge: Insurer Failed To Show That Bifurcation Is Necessary In Bad Faith Suit
COLUMBUS, Ohio - An insurer's "mere assertion" that simultaneously litigating an insurance bad faith claim with other claims in an insurance dispute will require it to prematurely divulge privileged information is not sufficient to require bifurcation and a stay of the bad faith claim, a federal judge in Ohio ruled Jan. 13 in denying the insurer's motion to bifurcate (Excel Direct Inc. v. Nautilus Insurance Co., No. 16-446, S.D. Ohio; 2017 U.S. Dist. LEXIS 5435).



Breach Of Contract, Bad Faith Suits Consolidated For Discovery Purposes
LOS ANGELES - A federal judge in California on Jan. 13 granted an insured's motion to consolidate its insurance breach of contract and bad faith lawsuit with a related action for discovery purposes, ruling that consolidation was appropriate because no parties opposed (Aspen Specialty Insurance Co. v. Riddell Inc., et al, No. 15-6324; and Bell Sports Inc. v. Aspen Specialty Insurance Co., et al., No. 16-8409, C.D. Calif.; 2017 U.S. Dist. LEXIS 7655).



Excess Insurer Can Bring Bad Faith, Vexatious Refusal Claims, Judge Rules
KANSAS CITY, Mo. - A general liability insurance provider has failed to show that an excess insurer may not bring claims for bad faith failure to settle and vexatious refusal based on the same facts, a federal judge in Missouri ruled Jan. 23 in rejecting the general liability insurer's motion for partial summary judgment (AXIS Specialty Insurance Co. v. New Hampshire Insurance Co., No. 15-0809, W.D. Mo.; 2017 U.S. Dist. LEXIS 8554).



7th Circuit: Insured Fails To Show Causal Relationship Between Windstorm, Damage
CHICAGO - The Seventh Circuit U.S. Court of Appeals on Jan. 13 affirmed a lower federal court's ruling that a church insured has failed to adduce evidence of a causal relationship between a March 1, 2011, windstorm and its purported property damage (Olivet Baptist Church v. Church Mutual Insurance Co., No. 16-1689, 7th Cir.; 2017 U.S. App. LEXIS 647).



Judge: Insured's Breach Of Contract Is Barred By 2- Year Statute Of Limitations
DENVER - An insurance policy's two-year statute of limitations precludes an insured's breach of contract claim regarding denied additional coverage for hailstorm claims, a Colorado federal judge ruled Jan. 13 (The Pinewood Townhome Association Inc. v. Auto-Owners Insurance Co., No. 15-01604, D. Colo.; 2017 U.S. Dist. LEXIS 5456).



Colorado High Court: Insurer Did Not Prove Documents' Trade Secret Status
DENVER - Finding that an insurer did not meet its burden to establish that claims-handling documents sought via discovery requests in a bad faith lawsuit constituted trade secrets, a Colorado Supreme Court majority on Dec. 5 affirmed a trial court's decision to not issue a broad protective order for the documents (In Re Stephen Rumnock v. Dennis Anschutz, et al., No. 16SA38, Colo. Sup.; 2016 Colo. LEXIS 1228).



Parties Ask 4th Circuit To Determine Whether Bad Faith Suit Was Time-Barred
RICHMOND, Va. - Parties in an insurance dispute recently asked the Fourth Circuit U.S. Court of Appeals to determine whether an insurance breach of contract and bad faith suit was time-barred when filed and whether it met the presuit "claims presentment requirements of the insureds' Standard Flood Insurance Policy (SFIP) (Gary Woodson, et al. v. Allstate Insurance Co., No. 16-2018, 4th Cir.).



Reinsurer Seeks To Amend Complaint In Breach Of Contract, Bad Faith Suit
WASHINGTON, D.C. - Parties in a reinsurance dispute recently debated whether a federal judge in the District of Columbia should allow a reinsurer to amend its complaint against the Federal Crop Insurance Corp. (FCIC) (ACE American Insurance Co., et al. v. Federal Crop Insurance Corp., et al., No. 14-1992, D. D.C.).



Judge: Unambiguous Policy Language Shows Insurer Did Not Act In Bad Faith
COLUMBIA, S.C. - The term "flood" in a homeowners insurance policy is not ambiguous under South Carolina law, and as a result, an insurer did not breach its contract or act in bad faith in denying coverage under the policy because it contained a water damage exclusion that precluded coverage for the damages insureds sought, a federal judge in South Carolina ruled Dec. 29 in granting the insurer's motion for judgment on the pleadings (Stephen F. Morris, et al. v. Auto-Owners Insurance Co., No. 16-0880, D. S.C.; 2016 U.S. Dist. LEXIS 179715).



Insured's Claim Precluded By Flood Exclusion, Judge Rules In Bad Faith Suit
COLUMBIA, S.C. - An insurer did not act in bad faith in denying coverage under a homeowners insurance policy because an insured's claim for coverage was precluded by a flood damage exclusion in the policy, a federal judge in South Carolina ruled Dec. 29 in granting the insurer's motion for judgment on the pleadings (Rachel Todd v. Auto-Owners Insurance Co., No. 16-0883, D. S.C.; 2016 U.S. Dist. LEXIS 179711).



Record Showed No Issue Of Material Fact Existed In Bad Faith Suit, Panel Rules
PHOENIX - An Arizona state court did not err in granting summary judgment in an insurance breach of contract and bad faith lawsuit because it had reviewed the entire record before it and properly determined that no genuine issue of material fact existed warranting denial of the motion, an Arizona appellate panel ruled Dec. 22 (Avanna A. Ribitzki v. American Family Mutual Insurance Co., No. 1 CA-CV 15-0509, Ariz. App., Div. 1; 2016 Ariz. App. Unpub. LEXIS 1611).



Judge: Fact Issues Preclude Ruling As To Policy Exclusion, Alleged Bad Faith
NEW ORLEANS - A Louisiana federal judge on Dec. 28 denied a homeowners insurer's motion for summary judgment in an insured's lawsuit alleging that the insurer's denial of her claim was arbitrary, capricious and not in good faith (Joyce Twine v. Allstate Insurance Co., No. 15-5168, E.D. La.; 2016 U.S. Dist. LEXIS 179153).



Insurer Acted In Good Faith In Handling Of Extra Expense Claims, Judge Rules
LOS ANGELES - An insured has failed to provide any genuine issues of material fact to show that his insurer breached the terms of an insurance policy or acted in bad faith in handling a business-income claim for losses associated with commercial property that sustained fire damage, a federal judge in California ruled Jan. 9 (Richard G. Heller v. American States Insurance Co., No. 15-9771, C.D. Calif.; 2017 U.S. Dist. LEXIS 3636).



Insureds' Lack Of Breach Of Contract Claim Leads To Dismissal Of Bad Faith Claim
TAMPA, Fla. - Because insureds have failed to bring a claim for breach of contract, they have failed to state a claim for bad faith and have violated the particularity requirement pursuant to the Federal Rules of Civil Procedure, a federal judge in Florida ruled Jan. 9 (Fred Fox, et al. v. Starr Indemnity & Liability Co., No. 16-3254, M.D. Fla.; 2017 U.S. Dist. LEXIS 2678).



Insured's Bad Faith Claim Lacked Factual Support, Federal Judge Rules
PITTSBURGH - An insured has failed to plead sufficient factual content to support his claim that his insurer acted in bad faith in failing to adequately settle his claim for underinsured motorist coverage pursuant to the terms of his automobile insurance policy, a federal judge in Pennsylvania ruled Dec. 21 in granting the insurer's motion to dismiss (Robert R. Mondron v. State Farm Mutual Automobile Insurance Co., No. 16-412, W.D. Pa.; 2016 U.S. Dist. LEXIS 17604).



Judge Denies Insured's Request To Remand Remaining Claim To State Court
LAS VEGAS - Remand of an insurance breach of contract claim to state court is not proper even though it is the sole remaining claim in the action and does not satisfy the amount-in-controversy standard pursuant to binding authority, a federal judge in Nevada ruled Jan. 4 (Jose R. Luna v. State Farm Mutual Automobile Insurance Co., No. 15-1104, D. Nev.; 2017 U.S. Dist. LEXIS 1568).



Insured's Insurance Bad Faith Claim Survives Motion To Dismiss
SCRANTON, Pa. - A federal judge in Pennsylvania on Jan. 12 denied an insurer's motion to dismiss in an insurance breach of contract and bad faith lawsuit, ruling that insured has pleaded sufficient evidence to support the claim (Robert Hughes v. State Farm Mutual Automobile Insurance Co., No. 16-2240, M.D. Pa.; 2017 U.S. Dist. LEXIS 4852).



Judge: Report Played No Role In Summary Judgment Ruling In Bad Faith Suit
LAS VEGAS - A federal judge in Nevada on Dec. 23 declined an insured's motion for reconsideration in an insurance bad faith lawsuit because the insured's expert report, which was not considered in ruling on a motion for partial summary judgment, had nothing to do with the previous ruling (Landon Amini v. CSAA General Insurance Co., No. 15-0402, D. Nev.; 2016 U.S. Dist. LEXIS 153339).



Parties Ask Nevada High Court To Determine Insurer's Liability Under State Law
RENO, Nev. - Parties in an insurance bad faith and breach of contract action filed briefing with the Nevada Supreme Court recently, in response to a Ninth Circuit U.S. Court of Appeals certification order, asking the court to determine an insurer's liability when it has breached its duty to defend but has not acted in bad faith (James Nalder, guardian ad litem on behalf of Cheyanne Nalder, et al. v. United Automobile Insurance Co., No. 70504, Nev. Sup.).



Panel Finds Limitations Period Precludes Insured's Breach Of Contract Claim
SAN FRANCISCO - A policy's 12-month limitations period bars an insured's breach of contract claim regarding its insurer's denial of coverage for scratches on glass windows at a condominium development project, the Ninth Circuit U.S. Court of Appeals affirmed Dec. 21 (Queensridge Towers LLC v. Allianz Global Risks US Insurance Co., No. 15-15128, 9th Cir.; 2016 U.S. App. LEXIS 22927).