LexisNexis® Legal Newsroom
Trial Court Finds Claim for Bad Faith May Survive a Motion to Dismiss Despite Failure to Properly Plead Claim for Breach of Contract

Mortazavi v. Federal Ins. Co. , 2014 U.S. Dist. LEXIS 31555 (S.D. Cal. Mar. 11, 2014), [ enhanced version available to lexis.com subscribers ]. In Mortazavi , the district court found in favor of a carrier on its motion to dismiss the insureds’ claim for breach of contract, but found that the...

It's Not "Bad Faith" For Lenders To Stick To The Terms Of Their Agreements With Borrowers

Last Friday, the Appellate Division provided another reminder that it is not “bad faith” for a lender to abide by the terms of its mortgage with a borrower. In Warner v. Sovereign Bank , borrowers fell behind on their residential mortgage and contacted their lender to request a modification...

California: WCAB Applies Neri Hernandez to Home Health Care Services Cases

The WCAB has issued two noteworthy panel decisions involving home health care services in light of Neri Hernandez (en banc). In each of these decisions, which involved critically injured workers, the WCAB has signaled in very strong terms that it will not tolerate a defendant's bad-faith or frivolous...

Iowa: No Claim for Bad-Faith Denial Could Be Maintained Where Insurer Had Reasonable Basis for Initial Denial

Acknowledging that Iowa law recognized a common-law cause of action against an insurer for bad-faith denial or delay of insurance benefits, and the tort has been extended to include workers' compensation cases, an Iowa appellate court nevertheless affirmed summary judgment in favor of an insurer...

No Good Deed Goes Unpunished: Negligence of Adjuster Not Basis for Bad Faith

Insurance adjusters are people knowledgeable in insurance retained by an insurer for the purpose of assisting the insured in proving a loss to the insurer. A person who expresses to the insured the fidelity and good faith of the insurer. The adjuster is not expected nor required to be perfect. In Murphy...

Recent Developments in California Bad Faith Law and Related Trends

By Tyler Gerking On July 29, 2014, I spoke on a panel about recent developments in California bad faith law and related trends. My co-presenter was Robert K. Scott of The Law Offices of Robert K. Scott, and we gave the presentation at ACI’s 28th National Advanced Forum on Bad Faith Claims &...

LexisNexis Author William T. Barker To Speak at 1st Annual Bad Faith Litigation Strategies ExecuSummit on "Recent Developments in Third-Party Bad Faith: The American Law Institute Principles of the Law of Liability Insurance."

On November 4, 2014, LexisNexis author William T. Barker will speak at the 1st Annual Bad Faith Litigation Strategies ExecuSummit on "Recent Developments in Third-Party Bad Faith: The American Law Institute Principles of the Law of Liability Insurance." Mr. Barker is the co-author, (with Ronald...

Is That Covered? Insurer Refusal to Pay for Full Property Loss May Be Bad Faith

By Michael R. Kelley If you or your clients have ever had the experience of submitting a claim to an insurance company, you probably know how difficult it can be to get the insurance company to pay the full amount of damages. Even if the company agrees that a loss is covered, insurers frequently...

5th Circuit Addresses Excess Insurer’s Bad Faith Claim Against Primary

Tapas: Small Dishes of Insurance Coverage News & Notes RSUI Indem. Co. v. American States Ins. Co., No. 14–30033 (5th Cir. Sept. 25, 2014), [ enhanced version available to lexis.com subscribers ], (addressing Louisiana law) (“We hold only that under the circumstances of this case...

Dentons on Consequences of Inadequate Reservation of Rights

By William T. Barker, Partner, Dentons US LLP In Advantage Buildings & Exteriors, Inc. v. Mid-Continent Casualty Co., 2014 Mo. App. LEXIS 975 (Sept. 2, 2014), the court recognized that there was no coverage, but still held the insurer liable for bad faith failure to settle because it had failed...

Ten Most Significant Insurance Coverage Decisions Of 2014 – Supreme Court Awards the Entire Kitchen For Insurer’s Breach Of the Duty To Defend

If an insurer is determined to have breached the duty to defend, consequences will attach. It may be that the insurer must pay for the defense costs that it otherwise owed. Or the consequences may be much harsher – the insurer may lose the right to assert otherwise applicable defenses to indemnity...

Ten Most Significant Insurance Coverage Decisions Of 2014 – The Loudest Case Yet To Conclude That A Reservation Of Rights Letter Was Ineffective For Lack Of An Adequate Explanation

In Advantage Builders & Exteriors, Inc. v. Mid-Continent Casualty Co., -- S.W.3d – , 2014 Mo. App. LEXIS 975 (Mo. Ct. App. 2014), [ enhanced version available to lexis.com subscribers ], Mid-Continent’s insured, Advantage Builders, was sued for construction defects. Mid-Continent undertook...

Attorney's Fees Awarded; Bad Faith Conduct by DOS, USCIS: Guerra v. USA

"After careful review of the record during the course of these proceedings, as well as consideration of the conduct underlying the litigation, the Court finds that this is the exceptionable case where an award of bad faith fees is necessary to compensate Plaintiffs for needless and improper delay...

No Coverage – No Suit Against Insurer: Insurer May Litigate Coverage Dispute

In Quihuis v. State Farm Mut. Auto. Ins. Co ., — Fed.Appx. —-, 2014 U.S. App. LEXIS 24449 (C.A.9 (Ariz.) 12/24/14), [ enhanced version available to lexis.com subscribers ], the Ninth Circuit Court of Appeal, tracking Arizona law, was asked to allow an insured to sue its insurer for improper...

The Coverage Action 'Fixed' Bad-Faith Damages: Are The Total Damages Binding?

By Hudson Jones I. Introduction Florida state and federal courts struggle with excess damage verdicts in first-party bad-faith actions arising out of uninsured motorist/underinsured motorist (UM) coverage. Recent case decisions produce mixed results for insurers. But mention UM coverage, bad faith, and...

Class: Insurer Acted In Bad Faith In Relying On Earth Movement Exclusion (Watch The Videos)

RENO, Nev. — (Mealey’s) Counsel for a class of homeowners on Feb. 3 asked a jury during opening arguments in the Washoe County, Nevada, Second Judicial District Court to find that an insurer acted in bad faith by relying on an earth movement exclusion to deny coverage for damages sustained...

Expert To Jury: Insurer Was Correct In Relying On Earth Movement Exclusion (Watch The Videos)

RENO, Nev. — (Mealey’s) An insurer on Feb. 11 provided expert testimony to a jury in the Washoe County, Nevada, Second Judicial District Court that an earth movement exclusion was properly applied to disclaim insurance coverage ( Elizabeth Reimers, et al. v. Everest Indemnity Insurance Co...

Jury Awards $4.5 Million To Homeowners’ Class For Insurer’s Bad Faith (Watch The Videos)

RENO, Nev. — (Mealey’s) A jury in the Washoe County, Nevada, Second Judicial District Court on Feb. 13 awarded $4.5 million in compensatory damages for a commercial general liability insurer’s breach of its duty of good faith and fair dealing in declining a defense and indemnity for...

Mississippi: In Bad Faith Case, Evidence of Insurer’s Actions Prior to Exhaustion of Administrative Remedies Was Admissible

A Mississippi appellate court held that the requirement that an employee exhaust his or her administrative remedies before filing a lawsuit for bad faith refusal to pay for disputed medical services and supplies merely ensured that the state’s Workers’ Compensation Commission had determined...

When The Federal Govt Acts Badly, But Not Badly Enough To Show Bad Faith – What’s A Contractor To Do?

By: Robert K. Cox In the prior issue of this newsletter, we included an article on the high standard of proof and the practical considerations for a federal government contractor claiming that the federal government acted in bad faith in its contract dealings. You responded with the question, suppose...

Supreme Court Allows Excess Insurer’s Bad Faith Claim Against Primary

Tapas: Small Dishes of Insurance Coverage News & Notes The Supreme Court of Hawaii held that “an excess liability insurer can bring a cause of action, under the doctrine of equitable subrogation, against a primary liability insurer who in bad faith fails to settle a claim within the limits...

How to Defeat an Arson for Profit Attempt – Suspected Arsonist’s Bad Faith Suit Fails

Arson-for-profit is the most dangerous of all methods of attempting insurance fraud. When an insurer has sufficient evidence to suspect an arson for profit attempt and denies the claim it will expect that the insured will sue the insurer for fraud and bad faith. The best way to defeat such an action...

Insurer Between a Rock and a Hard Case: Limits Demand That Does Not Release All Insureds

It is the proverbial “damned if you do and damned if you don’t” situation for insurers. An insurer is presented with a policy limits demand to settle for one insured – and it should be accepted based on liability and damages considerations -- but the settlement offered will not...

Insured Not Required to Plead Existence of a Within-Limits Settlement Demand in Order to State a Claim for Bad Faith Failure to Settle

In Aspen Specialty Ins. Co. v. Willis Allen Real Estate , the district court denied a liability carrier’s motion to dismiss an insured’s bad faith claim for failure to effectuate a settlement within policy limits despite the fact that the complaint failed to allege a within-limits demand...

Texas Workers’ Compensation Update: 2015 and the Year Ahead

By Stuart D. Colburn, Esq., and Albert Betts, Jr., Esq., Co-Authors, Texas Workers’ Compensation Law This year marks an anniversary that will not be celebrated with a parade or even a mention on the local news. But it is significant to those who are a part of the Texas workers’ compensation...