Archives: Bad Faith

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District of New Jersey Finds Post-Denial Communications By Insurer’s Counsel Insufficient to Sustain Bad Faith Claim

Under New Jersey law, an insurer cannot be held liable for bad faith in denying an insurance claim if the claim is “fairly debatable.” Therefore, unless a plaintiff can establish a right to summary judgment on the underlying cause of action for breach of contract, the coverage denial is considered “fairly debatable” and the court … Continue Reading

Suit Limitation Period In Standard Flood Insurance Policy Is Not Tolled By Filing In State Court: Hurricane Irene Claim Dismissed By Fourth Circuit

The terms and conditions of the Standard Flood Insurance Policy (“SFIP”) are specified by regulations promulgated under the National Flood Insurance Act (“NFIA”). One of the terms in the SFIP provides that the insured cannot sue the flood carrier unless the insured has complied with all requirements of the policy and the insured must “start … Continue Reading

Hurricane Sandy, Flood, and Sewer Backup: New Jersey Federal Court Confirms Anti-Concurrent Causation Bars Insured’s Claim

As we have written about before on this blog, the water damage caused by Hurricane Sandy in October 2012 gave rise to important questions concerning the applicability of so-called “anti-concurrent causation” clauses. Such was the case in the recently-decided matter of Carevel, LLC v. Aspen American Ins. Co., 2016 U.S. Dist. LEXIS 157919 (D.N.J. Nov. … Continue Reading

Florida Sinkhole Statute and Recovery of Attorneys’ Fees Without Bad Faith: Florida Supreme Court Reverses the 5th DCA and Reiterates Prior Holdings

In Johnson v. Omega Ins. Co., 2016 Fla. LEXIS 2148 (Sept. 29, 2016), the Florida Supreme Court determined that the 5th DCA misapplied and misinterpreted two statutes, the first providing a presumption of correctness to the initial report of an engineer retained by an insurer to investigate a sinkhole claim, and the second providing for … Continue Reading

Bad Faith and Punitive Damages Claims in Sandy Coverage Litigation Dismissed, But Consumer Fraud Act Claim Survives: New Jersey District Court Issues Hurricane Sandy Decision

As Superstorm Sandy insurance claims wend their way through the courts, we are beginning to see decisions related to motions on the pleadings, especially with regard to extracontractual claims. The first such decision in the New Jersey federal courts that we are aware of was recently issued in Beekman v. Excelsior Insurance Company and Peerless … Continue Reading

Failure To Establish A Violation of the Connecticut Unfair Insurance Practices Act Renders A Claim For Violation Of The Connecticut Unfair Trade Practices Act Meritless

The Connecticut Supreme Court’s recent decision reaffirming that a CUTPA claim against an insurance company (or agent or broker) must be strictly limited to alleging improper practices that are in violation of CUIPA will be particularly helpful to insurers in defending lawsuits asserting unfair trade practice and other bad faith claims. State of Connecticut v. … Continue Reading

California Supreme Court clarifies availability of insurance-related Unfair Competition Law (UCL) claims

The California Supreme Court recently issued a significant decision regarding the applicability of that state’s Unfair Competition Law (UCL) to the insurance industry, allowing certain types of such claims to be brought against insurers, potentially expanding insurers’ extra-contractual liability in that jurisdiction. On August 1, 2013, in Zhang v. The Superior Court Of San Bernardino … Continue Reading

Insurance Fraud Case: Second Circuit Addresses Adverse Inference Instruction, Restitution For Prior Payments

In insurance fraud cases involving actual or alleged destruction of evidence by the insured, an issue often arises regarding whether an adverse inference instruction is appropriate, and, if so, what form it should take. The Second Circuit recently approved a “light” form of adverse inference instruction that allowed the jury to make an adverse inference … Continue Reading

New York Assembly Passes Bills Regarding Anti-Concurrent Causation Clauses, Bad Faith, Insurance Litigation, and Timeframes for Claim Decisions

Significant attention has been given in the media to the New York Assembly’s recent passage of several bills, apparently motivated by Storm Sandy, that would impact property insurance claim handling and litigation. None of these bills have been passed by the state senate yet, or signed by the governor. Some of them have been inaccurately described in … Continue Reading

Florida Second DCA Rules That Payment Of Appraisal Award Satisfies The “Favorable Resolution” Requirement For A Bad Faith Action

In Florida, bad-faith actions against insurers pursuant to Section 624.155 cannot be brought until (1) the insured files a civil remedy notice (CRN) accepted by Florida’s Department of Financial Services; and (2) the underlying breach of contract lawsuit is “resolved in the insured’s favor.” See Blanchard v. State Farm Mut. Ins. Co., 575 So. 2d 1289, … Continue Reading

Attorney Fees Not Recoverable Under Bi-Economy and Panasia According To New York’s Appellate Division, Second Department

  In 2008, the New York Court of Appeals decided the companion cases of Bi-Economy Market, Inc. v. Harleysville Ins. Co., 10 N.Y. 3d 187) (2008) and Panasia Estates, Inc. v. Hudson Insurance Co., 10 N.Y. 3d 200 (2008), which held that “consequential damages resulting from a breach of the covenant of good faith and … Continue Reading

Settlement Agreement Does Not Constitute “Proof of Loss” under Louisiana Bad Faith Statute, According To Louisiana Supreme Court

In Katie Realty, Ltd. d/b/a The Landry Building v. Louisiana Citizens Property Ins. Inc., 2012 La. LEXIS 2710 (La. Oct. 16, 2012), the Louisiana Supreme Court reversed the First Circuit Court of Appeals and held that a written settlement agreement does not constitute a “proof of loss” under La. Rev. Stat. § 22:1892 (A)(1) and, … Continue Reading

Appraisal award in favor of insured was not a “final determination” of insurer’s liability under policy, and Florida court dismisses bad faith claim as premature

A few weeks ago, we reported on the Florida appellate court’s decision in Trafalgar At Greenacres, LTD v. Zurich American Ins. Co., No. 4D11-1376 (Fla. 4th DCA, Sept. 5, 2012), in which the court permitted a policyholder to sue its property insurer for bad faith even though the trial court had ruled that the insurer … Continue Reading

Entry of appraisal award constitutes “favorable resolution” of underlying breach of contract claim under Florida law, thereby permitting insured to pursue statutory bad faith damages

In many jurisdictions, a bad faith case predicated on a property insurer’s denial or alleged underpayment of a claim will not reach a jury if it is determined that the insurer fulfilled its obligations under the contract. The rationale is that if the insurer’s alleged conduct does not rise to the level of a breach … Continue Reading

Louisiana Bad Faith Statutes: Louisiana First Circuit Court of Appeal Finds Violation Based Solely On Inclusion of Lienholder In Settlement Checks

Some jurisdictions impose specific requirements on insurance companies regarding timely payment of undisputed amounts or amounts due after a settlement agreement is reached. Some jurisdictions impose penalties for failure to pay undisputed amounts or amounts due pursuant to a settlement agreement within a specified period of time. In Instant Replay Sports, Inc. v. Allstate Insur. … Continue Reading

Hurricane Isaac Insurance Claims Adjustment: Insights from Katrina

As insurance companies begin the process of adjusting Hurricane Isaac insurance claims, we thought it would be helpful to highlight briefly on our blog some of the key case law from Hurricane Katrina, and some key Louisiana statutes regarding insurance claim adjustment: Water Damage Exclusions: The Louisiana Supreme Court ruled in Sher v. Lafayette Insurance … Continue Reading

Seventh Circuit Affirms Continuous Trigger Applicable In First Party Policy and Insurer’s Bad Faith Denial of Coverage Under Wisconsin Law

When a loss arguably spans more than one policy period (the time period while a particular policy is in effect), the rule of law known as trigger of coverage, along with any policy provision addressing the issue, determines when a loss is considered to have occurred, and thus which policy or policies cover a particular … Continue Reading

Good Faith and Fair Dealing Claims and Hurricane Deductible Issues Addressed by Florida Supreme Court

Across the country we have seen attempts by insureds to bring a private right of action based on a breach of the implied warranty of good faith and fair dealing with regard to insurance policies. Most recently, this issue came before the Florida Supreme Court, which determined that no such private right of action exists … Continue Reading

Insureds’ Failure to Submit To Examinations Under Oath (EUO) Led to Summary Judgment for Insurer Affirmed By Fifth Circuit

The Fifth Circuit recently affirmed the Eastern District of Louisiana’s grant of summary judgment to the insurer where the insureds refused to submit to an Examination Under Oath (“EUO”) before filing a law suit against their insurer. In Hamilton v. State Farm Fire & Casualty Ins. Co., State Farm insured the Hamiltons under a homeowners’ policy … Continue Reading

Louisiana Insurance Bad Faith: Louisiana Appeals Court Issues New Hurricane Katrina Bad Faith Decision

While Hurricane Katrina related litigation is generally winding down, there are still some cases which are making their way through the Louisiana appellate process.  In the most recent decision coming out of the Louisiana Fourth Circuit Court of Appeal, a causation dispute led to an award in favor of an insured for consequential damages and … Continue Reading