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LexisNexis® Mealey's™ Insurance Bad Faith Legal News
Headline Insurance Bad Faith Legal News from LexisNexis®

• Magistrate: Insured Has Viable Bad Faith Claim Related To Train Derailment Case
  PITTSBURGH - An insurer unreasonably denied an insured's claim for coverage related to $2.3 million in property damage resulting from a train derailment and engaged in acts to leverage for its own benefit the commercial relationship between the insured and the underlying claimant, a Pennsylvania magistrate judge ruled Sept. 17, denying the insurer's motion to dismiss a claim for bad faith (Standard Steel LLC v. Nautilus Insurance Co., No. 08-195, W.D. Pa.; 2008 U.S. Dist. LEXIS 71487). Full story on lexis.com
• No Coverage Owed For ERISA Suit; Claims Related To Prior Securities Action
  CHICAGO - Because a class action suit alleging violations of the Employee Retirement Income Security Act (ERISA) was related to a prior securities action filed against an insured, a directors and officers insurer owed no coverage for the class action suit pursuant to the terms of an agreement that barred coverage for any claims related to the securities action, the Seventh Circuit U.S. Court of Appeals said Sept. 9 (RLI Insurance Co. v. Conseco Inc., Conseco Services LLC., Rollin Dick et al., No. 07-2831, 7th Cir.; 2008 U.S. App. LEXIS 19235). Full story on lexis.com
• Judge Denies Insurer's Motion To Dismiss Bad Faith Failure To Investigate Claim
  SAN DIEGO - A California federal judge on Sept. 10 denied an insurer's motion to dismiss the failure to investigate claim of counterclaimants' breach of contract and bad faith causes of action, finding that the insurer provided no authority stating that its alleged failure to take statements or wait for answers to questions is per se reasonable (Progressive West Ins. Co., plaintiff v. Jonathan Dallo; Michael Dallo; Mona Dallo; Dallo & Co. Inc., defendant. Jonathan Dallo; Michael Dallo; Mona Dallo; Dallo & Co. Inc., counterclaimants v. Progressive West Ins. Co.; Michael Kennedy, Kennedy Insurance Agency Inc., counterdefendants, No. 07CV1003 IEG [AJB], S.D. Calif.; 2008 U.S. Dist. LEXIS 70151). Full story on lexis.com
• Panel Affirms $169,274 Death Benefits Award To Insured's Widower
  DENVER - A life insurer's interpretation of an insured's eligibility and "actively at work" requirements was unreasonable, the 10th Circuit U.S. Court of Appeals ruled Sept. 12, affirming a lower court's award of $169,274 in death benefits to the insured's widower (Larry Weber v. GE Group Life Assurance Co., No. 07-5036, 10th Cir.; 2008 U.S. App. LEXIS 19353). Full story on lexis.com
• Reasonable Basis For Denial Of Benefits Precludes Bad Faith Claim, Judge Rules
  NEWARK, N.J. - Insurers' denial of an insured's claim for disability insurance benefits based on their interpretation of a proof of loss provision was not per se unreasonable, a New Jersey federal judge ruled Sept. 18, granting partial summary judgment to the insurers on bad faith and punitive damages claims (Jerrold B. Knoepfler v. The Guardian Life Insurance Company of America and Berkshire Life Insurance Company of America, a subsidiary of The Guardian Life Insurance Company of America, No. 01-5186 [WHW], D. N.J.; 2008 U.S. Dist. LEXIS 71226). Full story on lexis.com
• Judge: Total Repair Cost Dispute Does Not Warrant Statutory Bad Faith Penalties
  NEW ORLEANS - Although it may be true that $336,568 is insufficient to complete all necessary repairs to a Louisiana property damaged by Hurricane Katrina, the fact that the parties dispute the total cost of repairs does not warrant the imposition of statutory penalties for bad faith, a Louisiana federal judge found Sept. 18 (Chateau Argonne Condominium Association v. State Farm Ins. Co., et al., No. 06-7626 SECTION "L" [3], E.D. La.; 2008 U.S. Dist. LEXIS 70917). Full story on lexis.com
• Judge Denies Motion To Dismiss Bad Faith Claim, Limits Recovery
  LAKE CHARLES, La. - Insureds presented a proof of loss that their homeowners insurer failed to pay and, therefore, whether the insurer had a reasonable basis to deny coverage of the insureds' claims for damages stemming from Hurrican Rita is a factual determination that cannot be decided on the insurer's motion for summary judgment, a Louisiana federal judge found Sept. 5. The judge, however, limited the insureds' recovery of penalties under Lousiana Revised Statutes Annotated Section 22:658 to 25 percent (Robert M. Davis and Glenda C. Davis v. USAA Casualty Ins. Co., USAA General Indemnity Co. and United Services Automobile Association, No. 2:06-cv-2120, W.D. La.; 2008 U.S. Dist. LEXIS 68413). Full story on lexis.com
• Judge Denies Insurer's Motion For New Trial On $2.4M Jury Verdict
  FARGO, N.D. - A North Dakota federal judge on Aug. 26 denied an insurer's motion for a new trial on a jury's award of $1.2 million in bad faith damages and $1.2 million in punitive damages related to the insurer's denial of a fire claim, finding that the insured presented evidence of the emotional distress he suffered as a result of being labeled an arsonist (Timothy & Sylvia Moore v. American Family Ins. Co., No. 2:05-cv-31, D. N.D., Northeastern Div.; 2008 U.S. Dist. LEXIS 69332). Full story on lexis.com