Edwards Angell Palmer & Dodge's Insurance and Reinsurance Department recently published its latest Newsletter, Insurance & Reinsurance Review - September 2010, which contains nine articles about various topics in the insurance and reinsurance industry. read more
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A Nevada federal judge has determined that an insurer did not breach its contract or act in bad faith when it terminated payment for chiropractic services for two policyholders injured in an automobile accident. The Court found that the plaintiff policyholders failed to counter medical testimony that they did not require additional chiropractic care because the “maximum medical improvement” had been reached. read more
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A New Jersey federal judge dismissed a bad-faith claim for underinsured-motorist benefits, finding that Plaintiff's complaint lacked necessary factual support and did not rise above the level of “bare averment.” The Court also dismissed Plaintiff’s claim for punitive damages, finding that Plaintiff failed to allege sufficient facts to show egregious circumstances or that the insurer's conduct was wantonly reckless or malicious. read more
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Recently, a Pennsylvania federal court dismissed a bad faith claim against an insurer on the grounds that the claim was subsumed by the plaintiff’s breach of contract claim in the same proceeding. read more
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“Although Ohio courts have generally found independent tort liability only in cases of improper processing and handling of claims,” the U.S. District Court for the Northern District of Ohio held that a claim predicated on an insurer’s failure to refund unearmed premiums can support an independent claim for bad faith. read more
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In a class action lawsuit brought by various auto body shops and the Auto Body Association of Connecticut, a Connecticut jury recently rendered a $14.7 million verdict against an insurance company for allegedly violating the Connecticut Unfair Trade Practices Act, Conn. Gen. Stat. §42-110a et seq. (“CUTPA”). read more
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A Connecticut trial court recently held that the “general business practice” element of an unfair settlement practice claim under the Connecticut Unfair Insurance Practices Act, Conn. Gen. Stat. §38a-816(6) (“CUIPA”) requires that a plaintiff prove multiple unfair practices by an insurer against more than one insured. read more
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In Sadler v. State Farm Mutual Automobile Insurance Company, No. 08-35859 (9th Cir. Nov. 4, 2009), the insureds sued their insurer for bad faith, among other claims, arising from their insurer’s refusal to pre-authorize surgery under the personal injury protection (“PIP”) provision of the automobile insurance policy. read more
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In Mosser Constr. Inc. v. Travelers Indem. Co., Civil Action No. 3:08CV2363 (N.D. Ohio Oct. 26, 2009) (Zouhary, J.), an Ohio District Court was confronted with the question of whether a company that supplied crushed stone backfill to a general contractor is a “subcontractor” within the meaning of the insurance policy, or merely a “material supplier.” read more
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In North American Specialty Insurance Co. v. John Paul Pucek, et al., Docket No. 5:09-CV-49 (JMH) (E.D.KY Nov. 4, 2009), the owners of a thoroughbred horse purchased an equine mortality insurance policy. During the policy period, the horse sustained an injury that ultimately resulted in the horse being euthanized. read more
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In Vincoli v. Hartford Underwriters Ins. Co., FST-CV-09-5009591-S (Conn.Super. Sept. 24, 2009), a Connecticut Superior Court recently denied an Insurer's motion to strike counts alleging bad faith and violations of CUTPA from a complaint. The Insured was seriously injured when his car struck a tree after he was forced to take evasive action to avoid colliding with a phantom motorist. read more
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The Georgia Supreme Court recently remanded a case alleging an insurer's bad-faith failure to settle based upon the fact that the trial court improperly instructed the jury that where a claimant's demand is conditioned upon the response of another insurance company, the insurer's offer of its policy limits fulfills its duty to its insured. read more
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On December 15, 2009, New York's Appellate Division for the First Department held that an insured need not allege or prove that its insurer acted in bad faith in order to recover consequential damages stemming from the insurer's breach of the policy. read more
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Recently, the Third Circuit Court of Appeals held that where a policy’s exclusion clearly precluded coverage, the insurer could not be held liable under Pennsylvania’s statute for bad faith denial of coverage. read more
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In Lauren Heyse, et al. v. William Case, et al., AC No. 29289 (Conn. App. Jun. 2, 2009), the Insured, a resident of a common interest community, brought a lawsuit to challenge the rights of another property owner within the common interest community to subdivide a lot within the common interest community. read more
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On July 21, 2009, Judy and Michael Kodrin filed a petition for a writ of certiorari in the U.S. Supreme Court, asking the Supreme Court to review a Fifth Circuit decision vacating that portion of a Katrina-related judgment that awarded them penalties, damages and attorneys’ fees based on their homeowners insurer’s alleged bad faith. read more
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The Sixth Circuit recently denied an insurer’s petition for a writ of mandamus to vacate a discovery order compelling the production of information which the insurer argued was protected from discovery by the work-product and/or attorney-client privileges. read more
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An insurer represented by Edwards Angell Palmer & Dodge attorneys John Hughes and Julia Ulrich was recently granted summary judgment by the Connecticut Superior Court in a lawsuit involving a claim for uninsured motorist coverage, and also alleging common law and statutory bad faith against the insurer. read more
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In Fidelity & Deposit Co., et al. v. Douglas Asphalt Co., et al., No. 09-10919 (11th Cir. Jul. 28, 2009), the Eleventh Circuit affirmed the District Court’s judgment in favor of the insurers, who sought to recover from their insured payments made under payment and performance bonds when the insured allegedly defaulted and failed to complete a project. read more
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The Ninth Circuit Court of Appeals recently reversed an award of summary judgment that had been in favor of an insurer in a bad faith action regarding an uninsured motorist claim, and found against the insurer. read more
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In an unpublished two page decision filed August 11, 2009, the United States Court of Appeals for the Fifth Circuit upheld a $21.6 million jury verdict in favor of a New Orleans grocer with approximately $1 million in bad faith damages. read more
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A state appellate court in Louisiana recently increased a trial court’s award against an insurer in connection with a Hurricane Katrina-related bad faith claim, finding that the trial court had misinterpreted the statutory penalties available to the plaintiff. read more
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The United States District Court for the District of Connecticut recently granted in part an insurer’s motion to dismiss on the basis that the insured could not prove a violation of the Connecticut Unfair Insurance/Trade Practices Acts because allegations of multiple unfair practices in dealing with a single insurance claim are not sufficient to constitute a “general business practice.” read more
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The First Circuit recently held that an insured was not entitled to coverage under a Professional Liability claims made and reported policy where the claim is not both made against the insured and reported to the insurer within the policy period. read more
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Last month, the Connecticut Appellate Court ruled that where coverage is excluded under a policy of insurance, a plaintiff may not pursue a bad faith claim against the insured in connection with the insured’s denial of coverage. read more
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In Taylor v. Sentry Group of Companies, No. 08-35116 (9th Cir. May 20, 2009), the plaintiff was severely injured in an automobile accident, with medical expenses alone exceeding $200,000. The tortfeasor’s insurance policy had a limit of only $25,000. The tortfeasor’s insurer offered the plaintiff the entire policy limits as settlement on three separate occasions. Each offer was rejected by the plaintiff. read more
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In Ginther v. Farmers New Century Insurance Company, No. 04-3478 (3d Cir. Apr. 21, 2009), the United States Court of Appeals for the Third Circuit recently upheld “the other household vehicle exclusion” contained in an automobile insurance policy. read more
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Last month, a federal district court in Alabama ruled, as a matter of first impression that, under Alabama law, a litigant seeking to pursue an insurance bad faith claim against an insurer must have a direct contractual relationship with that insurer. read more
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In Woodworth v. Erie Insurance Company, No. 05-CV-6344CJS (Jun. 12, 2009), the federal district court for the Western District of New York held that recovery of consequential damages under Bi-Economy Mkt., Inc. v. Harleysville Ins. Co. of NY, 10 N.Y. 3d 187 (2008), is not limited to commercial property insurance claims. read more
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A Kentucky jury recently awarded a woman over $3.8 million in a bad faith suit against her doctor’s insurer. read more
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An insurer’s motion to strike an insured’s bad faith count against it was recently denied in Antonacci v. Darwin Select Ins. Co., 2009 WL 1424676 (Conn. Super. April 28, 2009). read more
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The Eleventh Circuit federal Court of Appeals recently affirmed summary judgment in favor of an automobile insurance company, finding that no reasonable jury could conclude that the insurer had acted in bad faith by offering the policy limits to an accident victim 33 days after the accident. read more
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A Mississippi Federal Court recently refused to remand a case after concluding that the plaintiff improperly joined two insurance agents to a lawsuit to destroy diversity jurisdiction. read more
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A New York trial court recently denied an insurer’s motion to dismiss the insured’s claim of consequential/extra-contractual damages for pain and suffering and held that the insured may proceed with discovery to explore whether the insurer’s denial of benefits violated the duty of good faith and fair dealing. read more
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An Illinois federal court recently held that an insured's bad faith claim fell within the scope of an arbitration provision contained in a D&O Policy and therefore granted the insurer's motion to compel arbitration. read more
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The United States Court of Appeals for the Fifth Circuit recently vacated a portion of a November 2007 ruling against State Farm Fire and Casualty Company, in which plaintiffs Judy and Michael Kodrin were awarded damages arising out of State Farm’s alleged bad faith failure to timely pay their claim for Hurricane-Katrina related wind damage. read more
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The United States District Court for the Northern District of Indiana recently held that the insureds’ misrepresentation claim against its insurance agent was a viable claim under Indiana law and was distinct from claims that the insurer adjusted their claim in bad faith. read more
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Craig Stewart (Boston) and Antony Woodhouse (London) of Edwards Angell Palmer & Dodge LLP are currently attending the 17th annual ABA/TIPS Insurance Coverage Litigation Committee Meeting being held in Los Angeles. read more
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On November 24, 2008, Duke University and its affiliate, Duke University Health Systems, Inc. (“DUHS”; collectively with Duke University, “Duke”) filed a federal action alleging that Duke’s insurer had acted in bad faith and breached its contractual duty to advance and pay Duke’s defense costs, to indemnify Duke, and to pay settlements agreed to by Duke in connection with various claims and lawsuits arising from the indictment of three members of the Duke University 2005-2006 men’s lacrosse team (the “Duke Three”) on charges of sexual assault. read more
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The maker of the Bratz line of dolls and toys recently filed suit against its commercial general liability insurer in the Central District of California alleging wrongful refusal to defend it in a lawsuit by Mattel. read more
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Recently the Third Circuit Court of Appeals reduced an award of punitive damages by over two-thirds, holding that a 1:1 ratio between punitives and compensatory damages is the appropriate limit where the harm is purely economic and the compensatory damages award is substantial. Jurinko v. Medical Protective Co., Nos. 06-3519 & 06-3666 (3rd Cir., December 24, 2008). The court reduced the award from $6.25 million to just under $2 million. read more
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The United States District Court for the District of Massachusetts recently held that delivery of a policy is not a prerequisite to the enforcement of its terms unless a policy so explicitly states. The court also held that an insurer can deny coverage for the failure to satisfy “claims made and reported” policy prerequisites without first investigating the claim. read more
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The Washington Supreme Court recently held that a cause of action for bad faith claims handling is not dependant on whether the insurer breached its duty to defend, settle, or indemnify, either in the third-party context under the common law, or under the Washington Consumer Protection Act (“CPA”). read more
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The United States District Court for the District of Massachusetts recently held that an insurer had no duty to defend or indemnify its insureds where the insureds’ claims “arose out of” acts that occurred prior to the policy’s retroactive date. read more
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An Ohio District Court recently denied an insurer’s motion to bifurcate its insured’s bad faith counterclaim from its declaratory judgment coverage action and to stay related bad faith discovery. read more
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The New York Insurance Department has now issued Circular Letter No. 26 (2008) dated November 18, 2008 to remind liability insurers writing property/casualty policies of the changes resulting from the new law, which takes effect on January 17, 2009, and also to clarify certain aspects of the Legislation. read more
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A Washington district court recently held that an insurer’s conduct and communications during a mediation were discoverable in a subsequent bad faith lawsuit brought against the insurer by another insurer in its status as the insured’s subrogee. read more
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A New York federal district court recently held that an insured’s claim for consequential extra-contractual damages is properly part of its breach of contract claim against its carrier. read more
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A Florida district court recently denied two insurers’ motion to dismiss a count for breach of the implied warranty of good faith and fair dealing. Arlen House East Condo. v. QBE Int’l Ins. Ltd., No. 07-23199, 2008 WL 4500690 (S.D. Fla. Sept. 30, 2008). The court rejected the insurers’ argument that the breach of implied warranty count was merely a “disguised” first-party statutory bad faith claim. read more
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In Wachovia Ins. Serv., Inc. v. Toomey, No. 06-1110, 2008 WL 4379587 (Fla. Sept. 29, 2008), the Florida Supreme Court answered two interrelated, certified questions from the Eleventh Circuit. read more
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A Florida appeals court recently ruled that while a state statute provides for the award of “reasonably foreseeable” damages resulting from insurer bad faith, a jury is not free to award such damages without any supporting evidence. read more
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In Perera v. United States Fidelity & Guaranty Co., No. 06-10925, 2008 Westlaw 4514388 (11th Cir. Oct. 9, 2008), the Court of Appeals for the Eleventh Circuit certified two, interrelated questions concerning bad faith to the Florida Supreme Court: (1) whether an insured can bring a bad faith claim if an excess judgment was not entered against him; and, if so, (2) whether the claim can be maintained if the insurer’s actions did not even expose the insured to potential liability in excess of aggregate policy limits. read more
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A Florida federal district court recently held that an appraiser’s finding that an insurer’s settlement of a property claim was too low cannot, by itself, sustain a cause of action for statutory bad faith. read more
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An Indiana federal district court recently granted summary judgment on the ground that an insurer had no duty under a CGL policy to indemnify its insured, a general contractor, in a suit premised on alleged faulty workmanship of the insured’s subcontractors. read more
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The U.S. District Court for the Central District of California recently denied a motion to strike and allowed a plaintiff to pursue treble punitive damages against his insurer for the insurer’s alleged bad faith. read more
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A Kentucky federal court recently granted a motion to exclude expert testimony by a former Kentucky Supreme Court judge concerning bad faith issues. read more
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A Missouri state appeals court recently affirmed a $16.3 million bad faith award against an automobile insurer arising from a policy with a $50,000 limit of liability. read more
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The Federal District Court for the District of Puerto Rico recently issued a 58-page decision on post-trial motions in which it extensively discussed Puerto Rico law concerning insurer bad faith and consequential damages in the context of an alleged bad faith denial of coverage. read more
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The Supreme Court of Alabama recently reversed summary judgment in favor of an insurer on an "abnormal" bad faith claim, ruling that genuine issues of material fact existed as to whether the insurer failed to properly investigate the insured’s claim and failed to investigate the condition of the insured’s house prior to the hurricane that allegedly caused the damage. read more
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The Chilean legislature was recently presented with a draft law designed to modernize the insurance and reinsurance provisions contained within Chile’s Code of Commerce. If enacted, the legislation would replace Chile’s current laws concerning private insurance and reinsurance in their entirety. read more
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Maldonado v. First Liberty Ins. Corp., 546 F. Supp. 2d 1347 (S.D. Fla. 2008), arose from an auto accident in which the insured’s wife collided with the father of three small children, causing his death As soon as it became aware of the accident, the insurer notified the insured that “the nature and extent of the damages and injuries being claimed suggests there is a potential exposure in excess of your policy limits. . . .” read more
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On July 23, 2008, New York Governor David Paterson signed into law what has been referred to as the "late notice bill" (Senate Bill 8610 and Assembly Bill 11541). The new law states that it takes effect 180 days after the date it is signed into law, and applies to policies issued after that 180-day period. Accordingly, the new law takes effect on January 19, 2009. read more
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The California State Court of Appeals recently reaffirmed that, under California law, claims made in one policy period and reported in a subsequent policy period are not covered under either of consecutive "claims made and reported" policies when both policies require that a claim be made and reported during the same policy period. read more
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A California state court of appeals recently held that an insurer properly denied coverage after its insured failed to timely report a “claim” after receiving a demand letter. read more
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The New York Court of Appeals denied a motion for rehearing in the Bi-Economy Market, Inc. v. Harleysville Insurance Company of New York case, thereby leaving intact its February 2008 decision allowing insureds to recover "consequential damages" for improper denial of coverage. The Court's denial was made without comment. read more
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In 316, Inc. v. Md. Cas. Co., Case No. 3:07cv528-RS-MD (N.D. Fla. May 21, 2008), an insured, whose commercial building had been damaged by Hurricane Ivan, alleged that its insurer acted in bad faith by refusing to pay for the damages. read more
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For the second time in just over a year, both houses of the New York Legislature passed a bill that would reverse New York’s longstanding “no-prejudice” rule. Senate Bill 8610 and Assembly Bill 11541 (the “Bill”) prohibits insurers from denying a claim based on late notice unless the insurer can show that it was prejudiced by the untimely notice. read more
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A federal district court in Virginia recently ruled that under Virginia law, an insured may not recover punitive damages in connection with a bad faith claim against its insurer. TIG Insurance Co. v. Alfa Laval, Inc., Civil Action No. 3:07CV683 (E.D.Va., March 5, 2008). The court explained that under Virginia law, a bad faith action against an insurer is a contract action, not an independent, willful tort for which punitive damages might be appropriate. read more
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The Federal District Court for the Western District of Kentucky recently denied a defendant insurer’s request to limit discovery in a bad-faith case to its pre-litigation conduct and to not include conduct post-commencement of litigation. read more
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The Supreme Court of New Jersey recently held that the New Jersey Punitive Damages Act allows punitive damages to be entered for the purposes of punishing and deterring only a specific wrongdoer, not for general deterrence. read more
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In what appears to be a matter of first impression in Florida, a federal Magistrate Judge in the Southern District of Florida denied the comparative bad faith and comparative negligence defenses in an excess insurer’s bad faith claim against a primary insurer. read more
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Oregon’s highest court recently found that a $20.7 million dollar punitive damages award in an insurance bad faith case, which was approximately sixteen times the actual damages awarded in the case, was excessive and likely unconstitutional. read more
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A Massachusetts state trial court recently ruled that, even though an insured’s contractual coverage claim against its insurer was time-barred, its claim for insurer bad faith could proceed under a separate statutory limitations period. read more
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A California federal court recently dismissed breach of contract and bad faith claims based upon certain excess insurers’ failure to fund a purportedly reasonable settlement, holding that an excess judgment or settlement is a prerequisite to such a claim. read more
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The Missouri Court of Appeals recently affirmed an $8 million punitive damages award against an insurer in a breach of contract, malicious prosecution, and punitive damages action arising from a denied automobile insurance claim valued at $10,300. read more
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In Bi-Economy v. Harleysville, 2008 N.Y. Slip Op. 01418 (Feb. 19, 2008), the New York Court of Appeals reversed summary judgment for an insurer and held that, under the factual circumstances presented and "in light of the nature and purpose of the insurance contract at issue," the insured had stated a viable claim for consequential damages. read more
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The New York Court of Appeals recently held that consequential damages are a permissible remedy for an insurer's breach of the covenant of good faith and fair dealing. read more
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In late 2007, the Washington Supreme Court held that (1) an insurer’s issuance of a subpoena to and ex parte written communications with an arbitrator in an underlying claim constituted bad faith; and (2) the insurer did not rebut the presumption of harm that arose from that bad faith finding. read more
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In the wake of the wildfires that devastated Southern California in October of last year, more than 22,000 insurance claims were filed, according to the Insurance Information Network of California. While the bulk of those claims may be for additional living expenses due to the mass evacuation of San Diego County, at least 1,500 homes were destroyed by the fires. read more
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In Mills v. Foremost Insurance Co., No. 06-16458 (Jan. 4, 2008), the 11th Circuit recently overturned the dismissal of Florida hurricane victims’ class-action lawsuit relating to mobile home damages. The plaintiffs claimed that their insurer underpaid for the damage to their mobile homes. read more
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In the wake of the wildfires that devastated Southern California in October of last year, more than 22,000 insurance claims were filed, according to the Insurance Information Network of California. While the bulk of those claims may be for additional living expenses due to the mass evacuation of San Diego County, at least 1,500 homes were destroyed by the fires. read more
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The Ohio state Court of Appeals recently determined that where portions of insurance policies at the center of a dispute were missing, the lower court's consideration of extrinsic evidence in determining the meaning behind ambiguous policy wording was proper. read more
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The Ninth Circuit Court of Appeals recently vacated a Nevada federal jury award of $10 million in punitive damages against Paul Revere Life Insurance Company and Unum Provident. read more
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In Encarnacion v. 20th Century Ins. Co., Nos. B179825 & 182737 (Cal. Ct. App. Sept. 27, 2007), an unreported decision, a California appeals court recently affirmed a multimillion-dollar verdict against an insurer that failed to settle the underlying suit for the $100,000 policy limit. read more
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Three recent Massachusetts cases touched on issues of significance to insurers doing business in and around the Commonwealth. read more
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The New York Court of Appeals recently rejected an insured’s argument that the placement of a “Relation of Earnings to Insurance” (REI) Clause within the “General Provisions” of a disability insurance policy rendered the clause deceptive and unenforceable. read more
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On August 23, 2007, Louisiana Attorney General, Charles C. Foti, Jr. filed a lawsuit accusing over one hundred insurance companies of improperly denying Katrina related damages. The action was brought on behalf of homeowners who are eligible to receive funds through the Road Home Program (“Program”). read more
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A California appellate court recently ruled that propulsion manufacturer Aerojet’s payment of approximately $175 million to settle regulatory enforcement actions over liability for groundwater contamination cannot be recovered under certain excess policies absent a final adjudication of liability. read more
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The United States Federal District Court for the Central District of California recently held that there was no bad faith where the insurer had a reasonable basis upon which to genuinely dispute the insured’s claim. read more
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Judge Ashley Royal of the United States District Court for the Middle District of Georgia recently held in a case by an insured against its disability insurer alleging bad faith refusal by the insurer to pay disability benefits, that the plaintiff was entitled to discovery of a wide range of documents potentially bearing on the insurer’s “intent” and the circumstances “surrounding” the insurer’s refusal to pay. read more
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Earlier this summer, a federal district court in Washington certified questions to the Supreme Court of Washington concerning whether an insured can maintain a procedural bad faith claim despite the fact that coverage was properly denied. The case, entitled St. Paul Fire and Marine Ins. Co. v. Onvia, Inc., Docket No. C06-1056RSL (W.D. Wash.)(see here), involved a claim based on a class action involving the insured’s practice of distributing advertisements via fax.
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In a bad faith case involving wrongful denial of coverage of a wrongful death suit, a Pennsylvania Court awarded the policyholder’s assignee $8,490,666 in damages, despite the fact that the policyholder had pled guilty to voluntary manslaughter. read more
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A Massachusetts court recently ruled that a “good health” requirement in a life insurance policy must be interpreted based upon what the contracting parties knew at the time the policy was issued (a subjective test), not based upon what in fact turned out to be true based on discoveries made at a later date (an objective test). read more
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Princeton Insurance Company recently agreed to pay $20 million to settle a bad faith claim related to a dram shop lawsuit brought against their insured. In the underlying lawsuit, a highway construction flagman sued Princeton’s insured, a tavern, after he was struck by a car driven by the tavern’s patron. read more
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A Florida appellate court recently swam against a tide of decisions that have eroded the attorney-client privilege in bad faith litigation. read more
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A Florida appellate court recently recognized a new statutory cause of action for bad faith in the handling of medical malpractice claims. read more
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