Insurance Law Community News

Is The Bad Faith Claim A Part Of The Package?

anonymous@localhost.com (Liz Barrett) — Thu, 23 May 2013 14:04:00 -0400

By Laura A. Turbe-Capaz I. Introduction In an effort to create yet another way to present a claim for bad faith against an insurance company, plaintiff attorneys have been submitting "package deal" demands on behalf of multiple claimants who have all incurred damages as a result of the same occurrence. Under this scenario, the insured is involved in an accident that results in bodily injuries to several claimants, whose injuries and damages vary greatly. At least one of the claimant's damages clearly exceeds the policy limits, but the other remaining claim(s) are less serious and are not valued in excess of the policy limits. Nevertheless, the plaintiff attorney presents a settlement demand seeking tender of the per occurrence policy limits in exchange for release of all the claims. What should the insurer do?

Judge: Fact Issues Exist As To Whether Property Damage Occurred Under Insurance Policy

anonymous@localhost.com (Liz Barrett) — Thu, 23 May 2013 14:04:00 -0400

SACRAMENTO, Calif. - Questions remain as to whether property damage occurred under an insurance policy's period and whether a stipulated judgment entered between mobile homeowners and the mobile park's owner was entered with collusion, a California federal judge ruled May 14, denying summary judgment to an insurer (Donald Anderson, et al. v. Century Surety Co. and Nationwide Mutual Insurance Co., No. 12-01057, E.D. Calif.; 2013 U.S. Dist. LEXIS 68646).

Insurance Policy Bars Coverage For Faulty Work, Judge Concludes

anonymous@localhost.com (Liz Barrett) — Thu, 23 May 2013 14:04:00 -0400

SEATTLE - An insurance policy precludes coverage for an insured condominium association's damage caused by faulty workmanship and wind-driven rain, a Washington federal judge ruled May 14 (Siena Del Lago Condominium Association v. American Fire and Casualty Co., et al., No. 12-251, W.D. Wash.; 2013 U.S. Dist. LEXIS 69308).

Inconsistencies In Auto Theft Claim Defeat Bad Faith Charge, Federal Judge Finds

anonymous@localhost.com (Liz Barrett) — Thu, 23 May 2013 14:04:00 -0400

LOS ANGELES - In light of "substantial and unrebutted evidence" of a plaintiff's "multiple inconsistent representations" to his insurer during the investigation of a vehicle theft claim, a California federal judge on May 9 found that the insurer "had a reasonable and legitimate basis" for denying the claim and, thus, did not act in bad faith (Rick Chaidez v. Progressive Choice Insurance Co., et al., No. 2:12-cv-03753, C.D. Calif.; 2013 U.S. Dist. LEXIS 66515).

Magistrate Finds Requests For Other Insureds' Policy Information Not Relevant

anonymous@localhost.com (Liz Barrett) — Thu, 23 May 2013 14:04:00 -0400

COLUMBUS, Ohio - Although an Ohio federal judge on May 9 found some of the plaintiffs' document requests from their homeowners insurer to be reasonable, she found no merit to their motion to compel production of the policies of other homeowners in their neighborhood to support their bad faith claim (William R. Wright, et al. v. State Farm Fire and Casualty Co., No. 2:12-cv-00409, S.D. Ohio; 2013 U.S. Dist. LEXIS 66275).

ADA Lawsuit Did Not Trigger Duty To Defend As An 'Occurrence,' Judge Finds

anonymous@localhost.com (Liz Barrett) — Thu, 23 May 2013 14:04:00 -0400

SAN FRANCISCO - A construction firm's insurance policies did not provide coverage for its damages arising from an underlying Americans With Disabilities Act (ADA) lawsuit, a California federal judge ruled May 16, dismissing breach of contract and bad faith claims related to the insurers' refusal to provide a defense in the ADA action (Pacatte Construction Company Inc. v. AMCO Insurance Co., et al., No. 3:12-cv-01472, N.D. Calif.; 2013 U.S. Dist. LEXIS 70139).

Judge Finds Claims From Life Insurance Beneficiaries Preempted By ERISA

anonymous@localhost.com (Liz Barrett) — Thu, 23 May 2013 14:04:00 -0400

FRESNO, Calif. - Finding that the state law breach of contract and bad faith claims brought by the beneficiaries of a life insurance policy were preempted by the Employee Retirement Income Security Act (ERISA), a California federal judge on May 17 granted the insurer's motion to dismiss, while giving the claimants leave to amend (Nicole Cox, et al. v. Reliance Standard Life Insurance Co., No. 1:13-cv-00104, E.D. Calif.; 2013 U.S. Dist. LEXIS 70601).

Judge: Settlement Demand And Possible Punitive Damages Satisfy Federal Threshold

anonymous@localhost.com (Liz Barrett) — Thu, 23 May 2013 14:04:00 -0400

SOUTH BEND, Ind. - Because a plaintiff's underinsured motorist (UIM) settlement demand plus the possible punitive damages she could recover for her bad faith claim exceed the minimum $75,000 threshold for federal jurisdiction, an Indiana federal judge on May 14 denied a motion to remand the case state court (Veronica Martin v. Progressive Paloverde Insurance Agency Inc., No. 3:13-cv-00064, N.D. Ind.; 2013 U.S. Dist. LEXIS 68765).

Judge Deems 'Insured Auto' Exclusion Valid In Underinsured Motorist Case

anonymous@localhost.com (Liz Barrett) — Thu, 23 May 2013 14:04:00 -0400

DENVER - In light of state court case law upholding similar exclusions, a Colorado federal judge on May 16 found valid a policy provision that excluded underinsured motorist (UIM) coverage under the liability coverage of the same insurance policy (Anthel Johnson, et al. v. GEICO Indemnity Co., No. 1:12-cv-02260, D. Colo.; 2013 U.S. Dist. LEXIS 69662).

5th Circuit Affirms No Breach, No Bad Faith By Bond Insurer

anonymous@localhost.com (Liz Barrett) — Thu, 23 May 2013 14:04:00 -0400

NEW ORLEANS - A financial guarantor was abiding by the terms of an insurance contract when it declined to give consent to a borrower's request to pursue a second set of bonds, a Fifth Circuit U.S. Court of Appeals panel ruled May 14, affirming a lower court's finding that the insurer did not beach its contract or act in bad faith (Woman's Hospital Foundation v. National Public Finance Guarantee Corp., et al., No. 12-30701, 5th Cir.; 2013 U.S. App. LEXIS 9683).

Insurer Sought To Resolve Liens, Subrogation In Good Faith, 10th Circuit Finds

anonymous@localhost.com (Liz Barrett) — Thu, 23 May 2013 14:04:00 -0400

DENVER - The evidence shows that an auto insurer properly attempted to settle all matters related to claims against its insured's estate, a 10th Circuit U.S. Court of Appeals panel ruled May 16, affirming a lower court's finding of no bad faith on the insurer's part (Tara Berendes v. GEICO Casualty Co., No. 12-4136, 10th Cir.; 2013 U.S. App. LEXIS 9806).

Coverage For Boat Sinking Properly Denied As Excluded, California Panel Rules

anonymous@localhost.com (Liz Barrett) — Thu, 23 May 2013 14:04:00 -0400

SANTA ANA, Calif. - Agreeing with an insurer's assessment that "wear and tear" led to a boat's sinking, a panel in the Fourth District California Court of Appeal on May 9 upheld a lower court's finding that the insurer did not breach its contract or act in bad faith for denying the boat owner's claim in light of the excluded condition (Richard Ashoff v. Essentia Insurance Co., No. G046880, Calif. App., 4th Dist.; 2013 Cal. App. Unpub. LEXIS 3290).

Q&A With Much Shelist's Neil Posner

anonymous@localhost.com (Liz Barrett) — Thu, 23 May 2013 08:16:00 -0400

Insurance companies have vast resources to defend against coverage claims, yet it is the rare case where an insured who prevails is able to recover the cost of the insurance benefits she purchased, says Neil Posner, chairman of the policyholders' insurance coverage practice group at Much Shelist PC. Read More...

Nautilus Wants Out Of Covering E.Coli Outbreak At NC Fair

anonymous@localhost.com (Liz Barrett) — Wed, 22 May 2013 17:11:00 -0400

Nautilus Insurance Co. filed a complaint Monday to avoid defending a North Carolina county fair and a petting zoo operator against four lawsuits brought over an E. coli outbreak last fall. Read More...

3rd Circ. Affirms Westport Win In Malpractice Coverage Row

anonymous@localhost.com (Liz Barrett) — Wed, 22 May 2013 15:42:00 -0400

The Third Circuit on Wednesday found that Westport Insurance Co. did not have to defend and indemnify an attorney sued for malpractice in New Jersey state court, agreeing that coverage was barred under his policy’s interrelated acts provision due to related claims raised in a separate action. Read More...

Fla.'s Citizens Insurance Sheds $14B In Exposure

anonymous@localhost.com (Liz Barrett) — Wed, 22 May 2013 15:30:00 -0400

The board of Florida's state-backed Citizens Property Insurance Corp. on Wednesday narrowly approved a deal allowing nine-month-old Heritage Property and Casualty Insurance Co. to take over 60,000 of its homeowners insurance policies that add up to about $14 billion in exposure. Read More...

Fla. Health Clinic Director Gets 9 Years, $24M For Fraud

anonymous@localhost.com (Liz Barrett) — Wed, 22 May 2013 15:08:00 -0400

A Miami federal judge on Wednesday sentenced a former health care clinic director and licensed therapist to more than nine years in prison and a personal judgment of nearly $25 million for his role in a $63 million Medicare and Medicaid fraud case. Read More...

U.S. Claims Immunity In $326M Suit Over Marine Flare Fire

anonymous@localhost.com (Liz Barrett) — Wed, 22 May 2013 14:56:00 -0400

The U.S. Department of Justice asked a California federal judge on Tuesday to throw out Smithfield Foods Inc.'s $326 million insurance suit over a massive plant fire caused by a military-issued flare, arguing the government has immunity under the Federal Tort Claims Act. Read More...

Coverage Owed For Personal Effects, Debris Removal, Federal Judge Determines

anonymous@localhost.com (Liz Barrett) — Wed, 22 May 2013 14:39:00 -0400

HARRISBURG, Pa. - An insured seeking coverage for water damages caused by the failure of a sump pump is entitled to coverage for debris removal and personal effects because the policy provides coverage for expenses that are in excess of the policy's $100,000 blanket limit in the sump pump endorsement, a Pennsylvania federal judge said May 16 (Buzgon Davis t/a Buzgon Davis Law Offices, et al. v. Peerless Indemnity Insurance Co., No. 12-1241, M.D. Pa.; 2013 U.S. Dist. LEXIS 69812).

Kansas Federal Judge Grants Insurer's Motion To Amend Answer

anonymous@localhost.com (Liz Barrett) — Wed, 22 May 2013 14:39:00 -0400

TOPEKA, Kan. - A Kansas federal judge on May 16 permitted an insurer to amend its answer to add an affirmative defense because the insureds will not be prejudiced by the amendment and because the insurer showed good cause for the delay in seeking the amendment (Jeff Coder, et al. v. American Bankers Insurance Company of Florida, No. 12-2231, D. Kan.; 2013 U.S. Dist. LEXIS 69882).

Court Finds Error In Grant Of Special Appearance For Mexican Mining Company

anonymous@localhost.com (Liz Barrett) — Wed, 22 May 2013 14:39:00 -0400

CORPUS CHRISTI, Texas - A Texas appeals court on April 18 reversed a decision that granted a Mexican mining company's request for special appearance and dismissed it from an action filed by an insurer that sought indemnification under a settlement in an adversary case seeking release of coverage for asbestos claims, ruling that the materiality and purpose of the discovery sought weighed in favor of finding an abuse of discretion in denying a continuance for the insurer (Mt. McKinley Insurance Company, et al. v. Grupo Mexico S.A.B. De C.V., No. 13-12-00347, Texas App., 13th Dist.; 2013 Tex. App. LEXIS 4804).

Pittsburgh Corning's Chapter 11 Reorganization Plan Confirmed

anonymous@localhost.com (Liz Barrett) — Wed, 22 May 2013 14:39:00 -0400

PITTSBURGH - Thirteen years after seeking bankruptcy protection from hundreds of thousands of asbestos personal injury claims, building products manufacturer Pittsburgh Corning Corp. (PCC) on May 16 received confirmation from a Pennsylvania federal bankruptcy judge for a plan of reorganization that establishes a more than $2 billion trust to pay those claims and future asbestos demands (In re: Pittsburgh Corning Corporation, No. 00-22876, W.D. Pa. Bkcy.; 2013 Bankr. LEXIS 2030).

Insurer Not Required To Pay More Than 12 Months Of Living Expenses, Panel Says

anonymous@localhost.com (Liz Barrett) — Wed, 22 May 2013 14:39:00 -0400

CINCINNATI - An insurer is not required to pay for more than 12 months of additional living expenses incurred by insureds who vacated their home as a result of the discovery of asbestos in their home's walls because the policy clearly limits the additional living expenses to 12 months, the Sixth Circuit U.S. Court of Appeal said May 15 (Reginald Hayes, et al. v. Liberty Insurance Corp., No. 12-1864, 6th Cir.; 2013 U.S. App. LEXIS 9865).

Barge Company Seeks Ruling That Insurer Must Cover Claims

anonymous@localhost.com (Liz Barrett) — Wed, 22 May 2013 14:39:00 -0400

NEW ORLEANS - A barge company that settled benzene injury claims with a seaman is seeking a summary judgment ruling that the claims do not fall into its insurer's exception for late notification of a claim, saying in a May 2 brief that it notified the insurer within a reasonable time of its awareness of a possible claim (XL Specialty Insurance Company v. Settoon Towing LLC, No. 2:12-cv-00811, E.D. La.).

Hawaii Federal Judge Remands Discovery Dispute To Magistrate Judge

anonymous@localhost.com (Liz Barrett) — Wed, 22 May 2013 14:39:00 -0400

HONOLULU - A Hawaii federal judge on May 16 remanded a discovery dispute in an arsenic damage coverage case to a magistrate judge to determine whether good cause exists to extend a discovery deadline to allow an insurer to designate an expert witness (Association of Apartment Owners of Imperial Plaza v. Fireman's Fund Insurance Co., No. 11-00758, D. Hawaii; 2013 U.S. Dist. LEXIS 69933).