Mealey's Insurance Bad Faith : Mealey's : Legal News & Analysis

Mealey's Insurance Bad Faith

December 15, 2025
Suit Stemming From Sewer Drain Backup Should Be Dismissed, Magistrate Judge Says

TRENTON, N.J. — A New Jersey federal magistrate judge recommended that a breach of contract and bad faith suit filed against a homeowners insurer stemming from a claim for damages sustained as a result of a sewer drain backup be dismissed because the insureds failed to respond to numerous discovery deadlines.
December 15, 2025
Environmental Liability Insurer Breached Duty To Defend In Bad Faith, Judge Says

TACOMA, Wash. — An environmental liability insurer breached its duty to defend its insured in bad faith because an underlying water contamination suit alleges a potential for coverage under the policy at issue and the insurer initially acknowledged that there was a potential for coverage under the policy, a Washington federal judge said in granting the insured’s motion for summary judgment on breach of contract and bad faith claims.
December 15, 2025
Insurer’s Initial Offer, Delay In Communications Did Not Rise To Level Of Bad Faith

DENVER — An insured’s bad faith claims against an auto insurer cannot proceed because the insured failed to show that the insurer’s delay in communications and the insurer’s initial offer to settle the insured’s underinsured motorist (UIM) claim were unreasonable and rose to the level of bad faith, a Colorado federal judge said in granting the insurer’s motion for partial summary judgment.
December 15, 2025
Bad Faith Claim In Gas Pipeline Rupture Coverage Suit Cannot Proceed, Judge Says

BOISE, Idaho — A bad faith claim alleged against a commercial property insurer in a dispute over coverage for the rupture of a natural gas pipeline cannot proceed because a question of fact exists over whether coverage is owed under the policy, an Idaho federal judge said in partially granting the insurer’s motion for summary judgment.
December 15, 2025
Bad Faith, Negligence Claims Will Not Proceed Against Insurer In Storm Damage Suit

HUNTINGTON, W.Va. — Negligence and bad faith claims against a homeowners insurer cannot proceed, a West Virginia federal judge said after determining that the negligence claim arises under the insurance contract and the bad faith claim is duplicative of the breach of contract claim.
December 11, 2025
Homeowners Insurer’s Removal Notice Timely Filed, Indiana Federal Judge Determines

INDIANAPOLIS — An Indiana federal judge denied a motion to remand after determining that the homeowners insurer’s notice of removal was timely filed because it was filed within 30 days of the insurer learning that the amount in controversy exceeded the federal jurisdictional minimum amount of $75,000.
December 10, 2025
Townhome Management Appeals Finding Of Collusion In Case Over Defect Coverage

DENVER — A townhome management company, as subrogee for a contractor, appealed to the 10th Circuit U.S. Court of Appeals a Colorado federal judge’s grant of summary judgment in favor of an insurer in the management company’s case against the insurer for insurance bad faith regarding the coverage of an underlying action the company brought against the contractor for alleged defective construction work; the judge found that the facts established that a Nunn agreement between the company and the contractor was the result of collusion.
December 09, 2025
Panel Affirms Ruling In Insurers’ Favor In Bad Faith Suit Over Factory Work Death

CINCINNATI — The Sixth Circuit U.S. Court of Appeals on Dec. 8 affirmed a lower court’s ruling in favor of insurers in a plastics manufacturer’s breach of contract and bad faith lawsuit seeking indemnification for the settlement of an underlying lawsuit brought by the family of the insured’s factory employee who was killed on the job, holding that the policies bar coverage for the underlying claim that the insured violated Ohio’s employer intentional tort statute.
December 09, 2025
5th Circuit Says State Law Bars Arbitration Of Hurricane Policy Dispute

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on Dec. 8, applying a Louisiana Supreme Court ruling on certified questions of law regarding the arbitrability of insurance disputes, affirmed a lower court’s denial of domestic insurers’ motion to compel arbitration of a Louisiana town’s claims for damages, breach of contract and bad faith after finding that the participation of foreign insurers in the policy does not require the court to apply the New York Convention.
December 09, 2025
Judge Dismisses 2 Claims In Coronavirus Coverage Suit, Allows Insureds To Amend

DURHAM, N.C. — A federal judge in North Carolina granted a commercial property insurer’s motion to dismiss claims for breach of the implied covenant of good faith and fair dealing and unfair and deceptive trade practices brought by four Durham, N.C., restaurants seeking coverage for their business interruption losses arising from the lockdowns prompted by the COVID-19 pandemic but allowed the insureds to file an amended complaint to include additional factual allegations related to the insurer’s renewed denial of claims following the North State Deli, LLC v. Cincinnati Insurance Co. decision by the North Carolina Supreme Court.
December 09, 2025
Insurer Waived Right To Object To Insureds’ Civil Remedy Notice, Florida Panel Says

ST. PETERSBURG, Fla. — A trial court erred in granting summary judgment in favor of a homeowners insurer in a bad faith suit stemming from the insureds’ claim for water and mold damage in their home because the insurer waived its right to object to the insureds’ civil remedy notice (CRN) by failing to raise an objection to the CRN when it responded to the CRN, a Florida appellate court said.
December 09, 2025
9th Circuit Affirms Ruling For Insurer In Bad Faith Suit Arising From Rain Damage

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals affirmed a lower federal court’s summary judgment ruling in favor of an insurer in the insured’s bad faith lawsuit arising from damage caused by rain that leaked through a roof, rejecting the insured’s contention that the lower court erred by excluding its expert testimony regarding causation.
December 08, 2025
COMMENTARY: D&O Liability & Coverage: 2025 Trends, Developments & Decisions

By Scott M. Seaman and Pedro E. Hernandez
December 05, 2025
Judge Denies Insurer’s Supplemental Summary Judgment Motion In Roof Damage Dispute

FORT WORTH, Texas — A federal judge in Texas on Dec. 4 held that fact issues preclude granting a commercial property insurer’s motion for supplemental summary judgment on a church insured’s claims for breach of contract and violations of the Texas Prompt Payment Claims Act, further denying the insured’s motion to reconsider an earlier ruling that dismissed its bad faith claims in a coverage dispute over hailstorm damage.
December 04, 2025
Insurer-Insured Debate Postjudgment Interest After Asbestos Award

NEW ORLEANS — An insurer in a Dec. 3 response asks for clarification of the period for which insured seeks prejudgment interest after a federal judge in Louisiana entered final judgment for an asbestos defendant on a $338,000 breach of contract claim.
December 04, 2025
Judgment Denied For State Farm In Fire Coverage Dispute Over Misrepresentations

SCRANTON, Pa. — A Pennsylvania federal judge on Dec. 3 denied summary judgment to State Farm in a breach of contract suit over State Farm’s alleged failure to cover an insured’s fire damage claim, finding that the insured’s testimony during an examination under oath (EUO) creates a dispute of fact regarding whether he made false statements in bad faith as to his knowledge of judgments exceeding $100,000 against him.
December 02, 2025
Insured Appeals Court’s Ruling That It Failed To Toll Statute Of Limitations

CHICAGO — A condominium association insured filed a notice on Dec. 1 appealing an Illinois federal court’s grant of an insurer’s motion for summary judgment in its breach of contract and bad faith lawsuit arising from hail and wind damage to the roofs of its 27-building condominium complex.
December 01, 2025
Defective Construction Exclusion Does Not Bar Coverage For Water, Mold Damages

SAN FRANCISCO — A California federal judge granted summary judgment in favor of insured homeowners on a breach of contract claim after determining that an all-risk policy provides coverage for rainwater intrusion and additional living expenses incurred as a result of mold contamination in the insureds’ home because rainwater, a covered loss, rather than defective construction, an excluded cause of loss, was the “efficient proximate cause” of the insureds’ loss.
December 01, 2025
Panel: Court Erred In Denying Homeowners Insurer’s Motion To Dismiss Bad Faith Suit

HOUSTON — A state trial court erred in denying a homeowners insurer’s motion to dismiss claims alleging violations of the Texas Insurance Code and bad faith because the insureds’ causes of action against the insurer were barred based on the insurer’s payment of an appraisal award, the First District Texas Court of Appeals said in vacating the trial court’s order.
December 01, 2025
Breach Of Contract, Bad Faith Claims Against Life Insurer Fail, Judge Says

MONROE, La. — A Louisiana federal judge granted a life insurer’s motion for summary judgment on breach of contract and bad faith claims after determining that the claims fail because the claimant failed to show that the life insurer breached any of the policy provisions.
December 01, 2025
Property Insurer Says Insureds’ Breach Of Contract Claim Must Be Dismissed

TULSA, Okla. — A breach of contract claim against a property insurer must be dismissed because the insureds failed to file suit within the policy’s one-year suit limitation provision and failed to show in their amended complaint that the limitation provision should be tolled, the insurer says in a motion to dismiss filed in Oklahoma federal court.
December 01, 2025
Insured Failed To Support Bad Faith Claim Against Auto Insurer, Judge Says

PHILADELPHIA — An insured’s bad faith claim cannot proceed because she failed to show that her auto insurer lacked a reasonable basis to deny a claim for underinsured motorist (UIM) benefits, a Pennsylvania federal judge said.
November 25, 2025
11th Circuit Affirms Bad Faith Verdict Entered In Favor Of Auto Insurer

ATLANTA — A district court did not abuse its discretion by not allowing an insured to introduce a jury verdict in her favor in the liability trial to the jury in a bad faith trial because the insured previously agreed that the verdict in the liability trial was irrelevant to the bad faith claim, the 11th Circuit U.S. Court of Appeals said in affirming the jury’s verdict in favor of the auto insurer on the insured’s bad faith claim.
November 25, 2025
Fact Issues Exist On Cause Of Water Damage, California Panel Says In Reversing

LOS ANGELES — The Second District California Court of Appeal reversed a trial court’s summary judgment ruling in favor of an insurer on breach of contract and bad faith claims in a dispute over coverage for water damage in the insured’s home after determining that questions of fact exist over whether a windstorm or wear and tear caused a hole in the home’s roof that resulted in water entering the home.