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

Mealey's Insurance Bad Faith

January 30, 2025
Questions Of Fact Exist As To Whether Home Is Insured’s ‘Residence Premises’

PITTSBURGH — A bad faith claim alleged against a homeowners insurer cannot proceed because the insured failed to show that the insurer did not have a reasonable basis to deny coverage for a fire damage claim; however, the insured’s breach of contract claim can proceed because questions of fact exist as to whether the home that was damaged by the fire was the insured’s “residence premises” as required by the policy, a Pennsylvania federal judge said in partially granting the insurer’s motion for summary judgment.
January 30, 2025
Beneficiary Of Life Insurance Policy Failed To Show Benefit Denial Was Unreasonable

SCRANTON, Pa. — A life insurance beneficiary’s breach of contract claim against a life insurer can proceed because the beneficiary sufficiently alleged that accidental death benefits may be available pursuant to a policy rider; however, the beneficiary’s bad faith claim must be dismissed without prejudice because the beneficiary failed to show that the insurer did not have a reasonable basis to deny coverage, a Pennsylvania federal judge said in partially granting the insurer’s motion to dismiss.
January 29, 2025
Panel Upholds Dismissal Of Hurricane Damage Suit Against Property Insurer

NEW ORLEANS — An insured’s breach of contract and bad faith claims stemming from a dispute over coverage for property damages sustained during a hurricane to 18 rental properties were properly dismissed because the insured failed to provide sufficient facts or details regarding the damages sustained to the properties and the property insurer’s handling of the insured’s claim, the Fifth Circuit U.S. Court of Appeals said.
January 29, 2025
Suit Limitation Provision Bars Homeowner’s Breach Of Contract, Bad Faith Claims

WASHINGTON, D.C. — An insured’s breach of contract and bad faith claims against her homeowners insurer fail because the insured failed to file suit within the policy’s one-year suit limitations provision, a District of Columbia federal judge said in granting the insurer’s motion for summary judgment.
January 29, 2025
Disability Income Insurer Properly Interpreted Policy Terms, Panel Says

BOSTON — A trial court did not err in granting a disability income insurer’s motion for judgment on the pleadings on breach of contract and bad faith claims because the policy clearly defines how monthly benefits will be paid to an insured and how monthly benefits will be paid under the disability insurance policy’s lifetime rider, a Massachusetts Appeals Court panel said in affirming the trial court’s ruling.
January 28, 2025
Suit Seeking Coverage For Chemical Exposure Injuries Removed To Federal Court

SEATTLE — An insurer acted in bad faith and breached its contract by withdrawing its defense of an insured in an underlying suit alleging that a couple’s exposure to chemicals distributed by the insured caused the couple’s child to be born with spina bifida, the insured says in a complaint removed by the insurer to Washington federal court.
January 27, 2025
Judge Dismisses Lloyd’s From Freddie Mac’s D&O Coverage Suit Following Settlement

WASHINGTON, D.C. — A federal judge in the District of Columbia granted Federal Home Loan Mortgage Corp. (Freddie Mac) and Certain Underwriters at Lloyd’s of London’s motion to dismiss with prejudice the dispute between them after they indicated that they have settled Freddie Mac’s breach of contract and bad faith lawsuit seeking directors and officers liability coverage for underlying expenses it incurred on behalf of its directors, officers and employees who were subpoenaed by the Securities and Exchange Commission during an investigation and subsequent lawsuit.
January 27, 2025
Breach Of Contract, Bad Faith Claims In Asbestos Abatement Dispute Fail

GREENBELT, Md. — A Maryland federal magistrate judge granted a homeowners insurer’s motion for summary judgment on breach of contract and bad faith claims after determining that the insured failed to support her claims that the insurer breached its contract and acted in bad faith in its handling of the insured’s claim for asbestos abatement and a full roof replacement.
January 27, 2025
Condo Developer Asks 10th Circuit To Reconsider Ruling Granting New Trial

DENVER — A condominium developer filed a “relatively narrow” petition in the 10th Circuit U.S. Court of Appeals seeking a panel rehearing of the court’s grant of an new trial following its reversal of a $2.54 million jury award in favor of the developer after finding that the developer cannot recover under a builders risk insurance policy for repair costs of a cracked concrete slab that it has not paid and has no obligation to pay, arguing that rehearing is both “appropriate and necessary” to correct the court’s errors, preserve the parts of the jury verdict that were fairly found and “avoid the significant costs of a wholesale retrial.”
January 24, 2025
Bad Faith Case For Handling Of Claim Settles After 2 Experts Are Admitted

JACKSONVILLE, Fla. — A week after a Florida federal court judge ruled that competing experts opining on industry standards for handling a bodily injury claim stemming from a car accident can testify, a woman who sued an insurance company for bad faith for failing to settle the claim notified the court that the parties have reached a settlement.
January 24, 2025
6th Circuit Denies Building Owner, Contractor’s Rehearing Petitions In Collapse Suit

CINCINNATI — The Sixth Circuit U.S. Court of Appeals denied petitions for rehearing filed by a building owner and a contractor, refusing to reconsider a panel’s finding that coverage is owed only for a portion of a wall that collapsed in a building that was undergoing renovation.
January 22, 2025
Judge Vacates Order Compelling Arbitration Of $7M Hurricane Claim

NEW ORLEANS — A Louisiana federal judge, citing new Louisiana Supreme Court precedent on the arbitrability of insurance claims, granted a motion filed by two New Orleans property owners’ to vacate an order compelling arbitration of their claims for $7 million in damages caused by Hurricane Ida and for bad faith against a group of foreign and domestic insurers, a ruling that was previously upheld by the Fifth Circuit U.S. Court of Appeals.
January 22, 2025
Bid To Compel Production Of Reinsurance Info Denied In Cleanup Costs Dispute

PADUCAH, Ky. — Saying in part that “neither claims manuals and guidelines nor reinsurance-related documents are relevant to Phase I of this litigation,” a Kentucky federal magistrate judge denied a motion to compel production in a dispute over pollution-related cleanup costs.
January 22, 2025
Federal Judge Dismisses Insurer From D&O Coverage Dispute Brought By Freddie Mac

WASHINGTON, D.C. — One day after Federal Home Loan Mortgage Corp. (Freddie Mac) and Houston Casualty Co. filed a joint stipulation and motion to dismiss, a District of Columbia federal judge dismissed the insurer from Freddie Mac’s breach of contract and bad faith lawsuit seeking directors and officers liability coverage for underlying expenses it incurred on behalf of its directors, officers and employees who were subpoenaed by the Securities and Exchange Commission during an investigation and subsequent lawsuit.
January 21, 2025
Condo Association Files Complaint, Says Hidden Damage Covered Under Policy

SEATTLE — A property insurer breached its contract and acted in bad faith when it denied a condominium association’s claim for hidden water damage because the hidden damage was caused by a covered cause of loss and is not excluded under the policies at issue, an insured contends in a complaint filed in Washington federal court.
January 21, 2025
Building Owner Appeals Attorney Fee Award In Coverage Suit Over Structural Damage

PHOENIX — A building owner insured filed a notice in an Arizona federal court indicating that it is appealing the court’s order awarding $198,234 in attorney fees to a commercial property insurer after granting the insurer’s motion for summary judgment in the insured’s breach of contract and bad faith lawsuit seeking coverage for structural damage to its building.
January 17, 2025
Bid To Pursue Resolution With Vesttoo Affiliate In Israel Draws Opposition

WILMINGTON, Del. — Israeli investors’ request for a Delaware federal bankruptcy court to grant relief from the injunction in the Chapter 11 liquidation of Vesttoo Ltd. and dozens of affiliates so they can pursue arbitration and/or liquidation proceedings in Israel has drawn objections that the investors argue should be rejected.
January 17, 2025
Issues Of Fact Exist As To Cause Of Insureds’ Shutdown During Wildfires

SAN FRANCISCO — A California federal judge partially denied an insurer’s motion for summary judgment in a breach of contract and bad faith case filed by insureds seeking additional coverage for business losses incurred as a result of wildfires after determining that issues of fact exist as to whether two of the insureds’ businesses were forced to close for a period of time because of soot and ash damages from the fires.
January 17, 2025
Insurer’s Denial Of Theft Claim Was Reasonable; Bad Faith Claim Fails

DAYTON, Ohio — A bad faith claim alleged against a homeowners insurer cannot proceed because the insurer’s justification for denying the insureds’ claim for theft was reasonable, an Ohio federal judge said in partially granting the insurer’s motion for summary judgment.
January 17, 2025
Insureds Failed To Show Carrier’s Actions Were Unreasonable, Judge Says

SAN ANTONIO — A Texas federal judge granted a homeowners insurer’s motion for summary judgment on insureds’ claims for bad faith and violation of the Texas Insurance Code after determining that the insureds failed to show that the insurer did not act reasonably in handling their claim for damages caused by a hailstorm.
January 15, 2025
Questions Of Fact Exist On Disability Insurer’s Initial Denial Of LTD Claim

SAN FRANCISCO — A bad faith claim alleged against a disability insurer can proceed because questions of fact exist on the issue of whether the insurer’s initial denial of a long-term disability (LTD) benefits claim was reasonable based on the evidence available to the insurer, a California federal judge said.
January 15, 2025
Federal Judge Returns Hurricane Ida Coverage Suit To Streamlined Settlement Program

NEW ORLEANS — One day after an insured filed an amended breach of contract and bad faith complaint seeking coverage for its property damage caused by Hurricane Ida, a federal judge in Louisiana on Jan. 14 returned the case to the streamlined settlement program.
January 15, 2025
No Coverage Owed For Boat, Trailer Damaged In Windstorm, Panel Says

AKRON, Ohio — A trial court properly granted summary judgment in favor of a homeowners insurer on claims alleging breach of contract, bad faith and fraud because no coverage is afforded under the policy for damages to a boat and boat trailer based on the failure of the boat owner to store the boat and trailer in an enclosed structure, the Ninth District Ohio Court of Appeals said.
January 14, 2025
Exclusion Bars Coverage For Home Depot’s Data Breach Loss, 6th Circuit Majority Affirms

CINCINNATI — A majority of the Sixth Circuit U.S. Court of Appeals on Jan. 13 affirmed an Ohio federal court’s finding that a commercial general liability insurance policy’s electronic data exclusion bars coverage for Home Depot’s losses stemming from a 2014 data breach, rejecting Home Depot’s contention that the lower court “wrongly expanded the narrow electronic-data exclusion beyond its natural meaning, based on assumed facts outside the record.”
January 14, 2025
Bad Faith Claim Against Auto Insurer Dismissed Without Prejudice

ORLANDO, Fla. — A Florida federal judge on Jan. 13 dismissed without prejudice an insured’s bad faith claim against an auto insurer after determining that the insured will not be prejudiced if the claim is dismissed without prejudice because the bad faith claim is dependent upon the outcome of the insured’s claim for uninsured motorist (UM) benefits.