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

Mealey's Insurance Bad Faith

August 22, 2025
Breach Of Contract, Bad Faith Claims Will Proceed Against Homeowners Insurers

SAN DIEGO — An insured’s breach of contract and bad faith claims will proceed against homeowners insurers in a putative class action suit filed by a homeowner who claims that her insurer wrongfully refused to renew her homeowners policy because the insured sufficiently alleged facts in support of the claims, a California federal judge said.
August 21, 2025
Auto Insurer Is Entitled To Judgment On Bad Faith Claim, Judge Says

CHARLESTON, S.C. — A South Carolina federal judge granted an auto insurer’s motion for judgment on the pleadings on an insured’s bad faith claim after determining that the insured failed to identify any consequential damages caused by the insurer’s alleged bad faith conduct.
August 20, 2025
Farmers’ Extracontractual Damages Claim Amended To Dismissal Without Prejudice

COOKEVILLE, Tenn. — A Tennessee federal judge partially granted farmers’ motion for reconsideration of a September 2024 ruling dismissing their claim for extracontractual damages against a crop insurer, amending the dismissal of the claim to be without prejudice, citing a related pending case against federal regulators that could potentially invalidate the rationale for the original dismissal.
August 20, 2025
‘Coverage Position Is Frivolous And Unfounded,’ Insured Argues In Data Breach Suit

GAINESVILLE, Fla. — An insured sued its insurer in a federal court in Georgia for breach of contract and bad faith seeking cyber defense coverage for putative class actions brought as a result of a 2024 data breach.
August 19, 2025
Producer’s Reconsideration Bid On Discovery Limits Denied In Cleanup Cost Row

PADUCAH, Ky. — A Kentucky federal judge denied a ferrosilicon producer’s motion to reconsider a prior ruling that limited the scope of the producer’s issued deposition topics, holding that the producer’s objections were largely repetitions of prior arguments already considered and addressed by the court and that claims-handling discovery is inappropriate at the current stage of litigation, which is centered on a reinsurance contract in a dispute over pollution-related cleanup costs.
August 19, 2025
Question Of Fact Exists As To Whether Ongoing Water Leakage Exclusion Applies

BOSTON — A Massachusetts federal judge denied a motion for judgment on the pleadings filed by insureds who are seeking coverage for water damage in their home because a question of fact exists as to whether the policy’s exclusion barring coverage for ongoing water leakage applies.
August 18, 2025
Insurer, Property Owner Seek Protective Order In Suit Over Defective Workmanship

PHOENIX — An excess commercial insurer and an apartment complex owner asked an Arizona federal court to issue a protective order as to discovery in the insurer’s lawsuit seeking a declaration that an underlying $6 million stipulated judgment arising from defective workmanship claims cannot be enforced against it.
August 15, 2025
Geico Bad Faith Coverage Claims Trimmed, But Breach Of Contract Claims Kept Alive

LAS VEGAS — A Nevada federal judge granted in part and denied in part an auto insurer’s motion to dismiss a policyholder’s bad faith coverage suit, dismissing without prejudice claims for tortious and contractual breach of the implied covenant of good faith and fair dealing and violation of Nevada's Unfair Insurance Practices Act (NUIPA) but allowing breach of contract and punitive damage claims to proceed, while holding that it was premature for the insurer to invoke the genuine dispute doctrine.
August 14, 2025
Pa. Federal Judge Dismisses Bad Faith Claim In Dust Contamination Coverage Suit

PHILADELPHIA — A Pennsylvania federal judge on Aug. 13 dismissed a bad faith claim alleged against a homeowners insurer after determining that the insureds, who are seeking coverage for an infiltration of dust in their home, failed to show that the insurer’s denial of coverage based on the policy’s exclusions for pollution and defective workmanship was unreasonable.
August 14, 2025
N.J. Panel Affirms Dismissal Of Townhouse Owner’s Bad Faith Coverage Dispute

TRENTON, N.J. — A New Jersey appeals panel affirmed a lower court’s dismissal of a townhouse owner’s breach of contract and bad faith lawsuit seeking coverage for underlying intentional interference, assault and harassment claims brought against him by a condominium association and its board members, finding that the underlying claims are premised on the plaintiff’s intentional acts and intent to cause the alleged harm.
August 14, 2025
Trial Court Did Not Err In Failing To Address Untimely Bad Faith Claims, Panel Says

ALBUQUERQUE, N.M. — A trial court did not err in failing to address an assignee’s bad faith claims in a coverage dispute arising out of a shooting at an insured establishment because the bad faith claims were untimely raised in an amended complaint that was effectively denied when the trial court entered summary judgment in favor of the insurer on the issue of coverage, a New Mexico Court of Appeals panel said.
August 13, 2025
Extracontractual, Breach Of Contract Claims Barred By Statute Of Limitations

FORT WORTH, Texas — A Texas federal judge granted a homeowners insurer’s motion for summary judgment on breach of contract and extracontractual claims after determining that the claims are barred by the applicable two-year statute of limitations because the insureds filed suit more than two years after the claims accrued.
August 12, 2025
Law Firm Credibly Alleges Breach Of Duty To Indemnify In Cyber Crime Coverage Suit

SEATTLE — A federal judge in Washington held that a law firm insured plausibly alleges that a commercial cyber insurance policy covers its liability under the Security Breach Liability provision, refusing to dismiss the insured’s claim that the insurer breached its duty to indemnify.
August 11, 2025
Insureds’ Breach Of Contract, Bad Faith Suit To Proceed Against Homeowners Insurer

HAMMOND, Ind. — An Indiana federal judge denied a homeowners insurer’s motion to dismiss breach of contract and bad faith claims in a storm damage coverage dispute after determining that the insureds allege sufficient facts to support the breach of contract and bad faith claims.
August 11, 2025
Insured Failed To Support Breach Of Contract Claim In Black Mold Coverage Suit

ABERDEEN, Miss. — A Mississippi federal judge granted a homeowners insurer’s motion for summary judgment on an insured’s claims in a coverage dispute over black mold growth in the insured’s home after determining that the insured failed to show what portion of the policy the insurer allegedly breached and failed to show that the insurer did not have a reasonable basis for its coverage decision.
August 11, 2025
Connecticut Judge Refuses To Strike Bad Faith Claims In Cryptocurrency Loss Suit

MILFORD, Conn.— A Connecticut judge denied a homeowners insurer’s motion to strike two claims for breach of the implied covenant of good faith and fair dealing in a coverage dispute arising from the insured’s cryptocurrency loss, finding that the insured has asserted specific conduct that indicates actions “with conscious bad faith design.”
August 11, 2025
Insureds Failed To Show Coverage Decision In Storm Damage Dispute Was Unreasonable

SAN ANTONIO — A Texas federal magistrate judge granted a homeowners insurer’s motion for summary judgment on extracontractual claims alleged by insureds seeking additional coverage for storm damage to their home after determining that the insureds failed to offer evidence showing that the insurer’s coverage decision was unreasonable.
August 08, 2025
Issues Of Fact Exist As To Cause Of Insureds’ Sagging Subfloor, Judge Says

FLORENCE, S.C. — A mobile home insurer is not entitled to summary judgment on breach of contract and bad faith claims because genuine issues of disputed fact exist regarding the cause of a sagging subfloor in the insureds’ mobile home, a South Carolina federal judge said.
August 08, 2025
Bad Faith, Unfair Trade Practices Claims Cannot Proceed Against Homeowners Insurer

RALEIGH, N.C. — An insured’s claims for bad faith and violations of North Carolina’s laws regulating unfair claims practices and deceptive trade practices cannot proceed against a homeowners insurer because the insured’s complaint asserts only that there was a reasonable disagreement about coverage for wet rot damage caused by a plumbing system leak in the insured’s home, a North Carolina federal magistrate judge said in granting the insurer’s motion for judgment on the pleadings.
August 07, 2025
Insured’s Bad Faith Suit Against Auto Insurer Will Proceed, Federal Judge Says

LOS ANGELES — A California federal judge denied an auto insurer’s motion to dismiss or stay an insured’s bad faith suit after determining that the bad faith claim alleged by the insured is not subject to arbitration and that a stay of the insured’s suit pending completion of the arbitration proceeding is not warranted.
August 07, 2025
Insureds Sufficiently Support Breach Of Contract, Bad Faith Claims, Judge Says

DENVER — Breach of contract and bad faith claims alleged against a homeowners insurer can proceed because the insureds stated sufficient facts to support a finding that the insurer’s refusal to pay for damages sustained to the insureds’ roof was a breach of contract and that the insurer’s conduct was not reasonable, a Colorado federal judge said in denying the insurer’s motion to dismiss.
August 05, 2025
Bifurcation Of Extracontractual Claims In Storm Damage Dispute Not Warranted

SHERMAN, Texas — Bifurcation of an insured’s breach of contract claim from the insured’s extracontractual claims is not warranted because the property insurer failed to meet its burden of showing that bifurcation would be economical or that the insurer would be prejudiced if the claims are tried together, a Texas federal magistrate judge said in denying the insurer’s motion.
August 05, 2025
Insured’s Breach Of Contract, Bad Faith Suit Will Remain In Federal Court

LOS ANGELES — An insured’s breach of contract and bad faith suit stemming from a dispute over coverage for the failure of a sump pump will remain in federal court because the insurer timely removed the suit within 30 days of recognizing that the amount in controversy met the federal jurisdictional minimum requirement, a California federal judge said.
July 31, 2025
Texas Panel Renders Take Nothing Judgment In Hurricane Harvey Coverage Suit

HOUSTON —A Texas appeals panel on July 31 reversed a lower court’s $643,000 final judgment against an insurer following a jury verdict in a coverage dispute over Hurricane Harvey damage and rendered judgment that the insured take nothing on his breach of contract and bad faith counterclaims against the insurer, holding that Ortiz v. State Farm Lloyds forecloses the insured’s counterclaims.
July 29, 2025
Insureds’ Water, Mold Damage Suit Dismissed Following Parties’ Settlement

CHICAGO — An Illinois federal magistrate judge dismissed an insureds’ breach of contract and bad faith lawsuit filed against a homeowners insurer seeking coverage for water and mold damage after the parties notified the court that a settlement was reached.