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

Mealey's Insurance Bad Faith

June 12, 2025
Insureds’ Motion To Strike Portions Of Amended Answer In Fire Damage Suit Denied

AKRON, Ohio — An Ohio federal judge denied a motion to strike portions of an insurer’s amended answer in a bad faith suit stemming from the insurer’s handling of a fire damage claim after determining that the insureds did not meet their burden of showing that the insurer failed to follow the Federal Rules of Civil Procedure.
June 12, 2025
Arbitration Demand, Bad Faith Claim Against Auto Insurer Fail, Utah Judge Says

SALT LAKE CITY — An insured’s demand for arbitration and its bad faith allegation cannot proceed against an auto insurer because the policy does not allow for arbitration for underinsured motorist (UIM) claims and the insured failed to show that the auto insurer acted unreasonably in handling a UIM claim, a Utah federal judge said in granting the insurer’s motion to dismiss.
June 12, 2025
Insured Allowed To Amend Bad Faith Complaint To Name Correct Auto Insurer

SEATTLE — A Washington federal judge granted an auto insurer’s motion to dismiss an insured’s breach of contract and bad faith suit but said the insured is permitted to amend the complaint to name the proper insurer in the body of the complaint.
June 12, 2025
Breach Of Contract, Bad Faith Claims Fail In Rental Coverage Dispute

BOSTON — A landlord is not entitled to additional coverage for lost rental income under a landlord dwelling policy because the landlord continued to collect rental payments from its tenants for alternative housing after the tenants’ units were rendered uninhabitable by water damage, a Massachusetts federal magistrate judge said in granting the insurer’s motion for summary judgment on breach of contract and bad faith claims.
June 11, 2025
Reinsurer Loses Bid To Dismiss Counterclaims In Case Arising From Vesttoo Collapse

BOSTON — Counterclaims against a commercial reinsurer survived dismissal in litigation connected to the collapse of Vesttoo Ltd., with a Massachusetts state court judge ruling in part that pay-as-paid provisions “protected only the primary insurers, and the ‘follow form’ provision in the Reinsurance Certificates did not rewrite them to protect [the reinsurer] as well.”
June 11, 2025
Portion Of Bad Faith Claim Against Auto Insurer Can Proceed, Judge Says

NEW HAVEN, Conn. — A third party’s bad faith claim pertaining to an auto insurer’s duty to defend its insured can proceed; however, the portion of the bad faith claim related to the insurer’s denial of coverage cannot proceed, a Connecticut federal judge said in partially granting the insurer’s motion to dismiss.
June 11, 2025
8th Circuit Affirms Property Damage Claim For Hail, Wind Damage Was Untimely

ST. LOUIS — The Eighth Circuit U.S. Court of Appeals on June 10 affirmed a lower federal court’s grant of summary judgment in favor of a businessowners insurer in an insureds’ breach of contract and bad faith lawsuit seeking coverage for hail and water damage to its commercial property following a thunderstorm, further holding that the lower court did not abuse its discretion when it refused to allow the insured to amend its complaint.
June 11, 2025
Judge Adopts Recommendation To Dismiss Insureds’ Breach Of Contract, Bad Faith Suit

FRESNO, Calif. — A California federal judge granted a homeowners insurer’s motion to dismiss breach of contract and bad faith claims alleged by insureds, agreeing with a magistrate judge’s finding that the claims fail because no coverage is afforded for an underlying suit filed against the insureds stemming from the insureds’ sale of their home.
June 11, 2025
Ferrosilicon Producer Seeks Reconsideration On Discovery Limits In Cleanup Row

PADUCAH, Ky. — A ferrosilicon producer seeks reconsideration of a Kentucky federal magistrate judge’s ruling limiting the scope of the producer’s issued deposition topics, claiming that the court erred in failing to acknowledge a reinsurer as a proper party in the litigation and misinterpreted its role in a reinsurance contract in a dispute over pollution-related cleanup costs.
June 10, 2025
9th Circuit Sets Argument In Oral Surgeon’s Bid To Revive Disability Benefits Case

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals has scheduled oral argument for July 7 in an appeal seeking revival of an oral surgeon’s breach of contract and bad faith suit filed after he unsuccessfully sought disability benefits on the grounds that his comorbid conditions and inability to access recommended personal protective equipment (PPE) made it necessary to close his practice early in the COVID-19 pandemic.
June 10, 2025
Insurers Successfully Move To Dismiss Claims In Remediation Coverage Suit

BALTIMORE — A Maryland federal judge granted motions to dismiss filed by insurers in a suit filed by insureds seeking coverage for an underlying suit stemming from the insureds’ environmental remediation work after determining that one of the insurers met its burden of showing that no coverage is owed under its policy and the other insurer met its burden of showing that the bad faith and vexatious refusal to pay claims cannot survive under New York law, which governs the policy.
June 09, 2025
5th Circuit Affirms Dismissal Of Claims, Vacates Sanction Order In Coverage Suit

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals affirmed a lower federal court’s dismissal of an insured’s breach of contract and bad faith claims in a homeowners insurance coverage dispute arising from a Texas city’s demolition of a building and vacated the lower court’s denial of the insurer’s second motion for sanctions.
June 06, 2025
Extracontractual Claims Cannot Proceed In Roof Damage Dispute, Judge Says

FORT WORTH, Texas — A Texas federal judge granted a commercial property insurer’s motion for summary judgment on claims alleging breach of the common-law duty of good faith and fair dealing and violations of the Texas Insurance Code and Texas Deceptive Trade Practices Act after determining that the claims cannot proceed because a genuine dispute exists over coverage for damage to a church’s roof caused by a hailstorm.
June 03, 2025
Judge: Fact Issues Preclude Summary Judgment In Hurricane Ida Coverage Dispute

NEW ORLEANS — A federal judge in Louisiana on June 2 denied cross-motions for summary judgment in a church insured’s bad faith lawsuit arising from Hurricane Ida property damage, ruling that there are genuine disputes of material fact regarding when the insurer received a satisfactory proof of loss and whether its payment and handling of the claim was arbitrary or capricious.
June 02, 2025
Insured’s Assignee Asks 8th Circuit To Reconsider Ruling In Storm Damage Dispute

ST. LOUIS — An insured’s assignee asked the Eighth Circuit U.S. Court of Appeals to reconsider its ruling that affirmed a lower federal court’s grant of summary judgment in favor of an insurer in its breach of contract and bad faith lawsuit arising from storm damage, asserting that the court did not “substantively address” its contention that the insurer bore liability for the adjustment of the claim.
June 02, 2025
Homeowners Insurer Did Not Breach Contract, Act In Bad Faith In Roof Damage Dispute

CAMDEN, N.J. — Breach of contract and bad faith claims alleged against a homeowners insurer cannot proceed because the insureds are not entitled to recover the actual cash value of the damages to their roof until after the repairs are complete and because no reasonable jury could find that the insurer acted in bad faith in handling the insureds’ claim, a New Jersey federal judge said.
June 02, 2025
Auto Insurer Permitted To Amend Answer To Assert Failure-To-Cooperate Defense

DENVER — A Colorado federal magistrate judge granted an auto insurer’s motion to amend its answer to include a failure-to-cooperate defense in response to the insured’s breach of contract and bad faith claims because the insured failed to show that amendment would be futile and that the insurer cannot maintain the defense under any circumstances.
May 30, 2025
Issues Of Fact Exist In Life Insurance Dispute, California Federal Judge Says

SAN JOSE, Calif. — A California federal judge denied a life insurer and a beneficiary’s motions for summary judgment after determining that genuine issues of material fact exist as to whether a misrepresentation regarding the insured’s use of tobacco was made on the policy application and whether the life insurer acted in good faith in handling the beneficiary’s claim.
May 30, 2025
Judge Grants Excess D&O Insurer’s Motion To Dismiss 4 Claims In Law Firm’s Suit

MIAMI — A federal chief judge in Florida granted an excess directors and officers liability insurer’s motion to dismiss four claims in a law firm’s lawsuit seeking payment for the legal representation of its insured, giving the insurer until June 9 to file an answer to the complaint’s remaining four claims.
May 29, 2025
Claims Against Lyft Insurer Fail; UIM Benefits Properly Waived, Judge Says

SALT LAKE CITY — A Utah federal judge granted summary judgment in favor of an insurer of Lyft Inc. drivers on breach of contract and bad faith claims, rejecting the insured Lyft driver’s argument that the waiver of underinsured motorist (UIM) benefits in the Lyft policy violates Utah law.
May 29, 2025
Auto Insurer’s Profitability Is Relevant To Request For Punitive Damages, Judge Says

SALT LAKE CITY — A Utah federal magistrate judge granted an auto insurer’s motion to strike portions of an insured’s complaint referencing the insurance industry but denied the insurer’s motion as it pertained to portions referencing the insurer’s size and profitability after determining that the insurer’s size and profitability are relevant to the insured’s request for punitive damages.
May 23, 2025
Insureds Say Carrier Acted In Bad Faith By Denying $19M Beryllium Release Claim

BOSTON — An insurer’s denial of an insured’s claim for more than $19 million in business interruption losses sustained as the result of a release of beryllium in the wake of three named storms constitutes a breach of contract and bad faith, the insureds say in a complaint filed in Massachusetts federal court.
May 23, 2025
Protective Order Motion Denied In Insurance Coverage Dispute Over Maserati Loss

INDIANAPOLIS — Denying a motion for a protective order on May 22, an Indiana federal magistrate judge said an insured suing State Farm over its alleged bad faith failure to compensate him for the loss of his Maserati must respond to State Farm’s discovery requests because the insured failed “to show the good cause required to obtain the requested protective order.”
May 22, 2025
Kentucky Federal Judge Denies Reconsideration Request In Cleanup Costs Dispute

PADUCAH, Ky. — A federal judge in Kentucky overruled the objections presented in and denied a ferrosilicon producer’s motion for reconsideration of a January ruling that denied the producer’s motion to compel production of documents in a dispute over pollution-related cleanup costs, ruling that the reconsideration motion impermissibly raised new arguments and failed to identify claimed ambiguities in a reinsurance contract between it and an insurer and reinsurer.
May 21, 2025
Insured’s Assignee Brings Bad Faith Suit Seeking To Recover $3.2M Consent Judgment

WEST PALM BEACH, Fla. — A horse stable owner insured’s assignee sued an insurer for bad faith in a Florida federal court, seeking to recover an underlying $3.2 million consent judgment arising from the settlement of an underlying fraud lawsuit.