Bad Faith Bulletin

Get the latest Extracontractual Claims Liability and Bad Faith legal news brought to you by Tressler’s experienced insurance attorneys.

In a recent per curiam decision, the Texas Supreme Court reversed a court of appeals decision holding that an insured’s claims under the Texas Prompt Payment of Claims Act (“TPPCA”) and for statutory and common law bad faith were barred by the payment under a unilateral appraisal clause. Steven Biasatti and Paul Gross d/b/a TopDog Properties v. GuideOne Insurance Company, ___ S.W.3d ___, 2020 WL 1898538, No. 18-0911 (Tex. April 17, 2020).

In TopDog, the insured made a claim for wind and hail damage, which its insurer, GuideOne, denied after two inspections, determined that the value of the
Continue Reading The Texas Supreme Court Declines Invitation to Drop Ortiz Independent Injury Requirement in Unilateral Appraisal Case

Reginald Cloyd III is an associate in the Commercial Litigation and Business Disputes Practice Group. Reggie has a broad range of experience representing individual and corporate clients in complex litigation matters, insurance coverage, local government and homeowner association matters.
He has advised and defended clients with respect to claims for breach of contract, consumer fraud, negligence, and other torts. Reggie has also worked on intellectual property, bankruptcy, and trust and estate matters. He has experience in all phases of litigation, including drafting and responding to discovery, arguing dispositive motions, and participating in settlement conferences.
Reggie received his J.D. from the
Continue Reading Attorney Spotlight: Reginald Cloyd III

The Lima Delta Company v. Global Aerospace, Superior Court of the State of Delaware Case No. 16C-11 -21WCC CCLD, arose out of a claim after insured aircraft crashed off the end of the runway in Democratic Republic of Congo (“DRC”) in 2012.  The insurer prevailed in a subsequent action to rescind the policy in 2016 (“Rescission Action”).  In the interim, the insurer took control of the salvageable wreckage, including two engines and an auxiliary power unit and stored the wreckage in the DRC. In 2016, the insured subsequently filed suit against the insurer alleging that, despite taking the position that
Continue Reading Out of Time – Aircraft Operator’s Conversion Claim Barred by Statute of Limitations

The United States District Court for the Middle District of Pennsylvania recently denied an insurer’s motion to sever and stay plaintiff’s bad faith claim from its breach of contract claim, finding that the convenience of the parties and judicial economy weighed against severance.  Further, it rejected the insurer’s argument that the resolution of the breach of contract claim would moot the bad faith claims.
The plaintiff was a passenger in a vehicle that was struck by another vehicle, which caused plaintiff to suffer serious and permanent injuries.  Plaintiff resolved her claim against the driver of the other vehicle, and sued
Continue Reading Insurer’s Motion to Sever Bad Faith Claims Rejected in Pennsylvania

The Pennsylvania Supreme Court published perhaps its most anticipated insurance case of the year: Rancosky v. Washington National Ins. Co., 2017 WL 4296351 (Sep. 28. 2017).  In Rancosky, the court held that in order to prevail on a claim for insurer bad faith under 42 Pa. C.S. § 8371, a plaintiff must present clear and convincing evidence that an insurer lacked a reasonable basis for denying benefits under a policy, and the insurer knew of or recklessly disregarded its lack of a reasonable basis.  The court held that evidence as to an insurer’s self-interest, ill-will, or “subjectively improper motive”
Continue Reading Pennsylvania Supreme Court Clarifies Standard For Bad Faith

In Richard Igartua v. Mid-Century Insurance Co., No. 2:216-cv-00849-JAD-CWH (D. Nev. June 28, 2017), the District Court granted summary judgment to an insurer as to claims of bad faith, unfair claims practices and breach of contract, while methodically presenting a timeline of a well-handled claim.
The plaintiff was injured when the tow-truck he was driving was rear-ended by another driver.  The insurer for the other driver paid him its policy limits of $25,000.  He then turned to his employer’s insurer to cover remaining expenses and damages related to the accident.  The investigation, including demands and counter-offers, went on for
Continue Reading No Penalty for Delay of Game: Insurer Reasonably Handled Plaintiff’s Claim for Years as a Matter of Law

In Manu v. GEICO Casualty Company, No. 160852, 2017 WL 1511791 (Va. Apr. 27, 2017), the Supreme Court of Virginia provided guidance on the scope of an uninsured motorist (UM) carrier’s bad faith exposure.
The plaintiff sustained more than $33,000 in damages after a multi-car accident.  Discovery obtained in plaintiff’s subsequent civil suit indicated that “John Doe,” the uninsured driver of another vehicle, caused the accident.  Plaintiff tendered to his UM carrier, and advised that he intended to seek his limits of $25,000.  The carrier defended “John Doe” in plaintiff’s civil suit.  Prior to trial, the UM carrier rejected plaintiff’s
Continue Reading In Virginia, No Bad Faith Claim Against UM Carrier Until There’s a Judgment Against the Uninsured Tortfeasor

The Ninth Circuit Court of Appeals affirmed a lower federal court’s finding that a business and management insurance policy’s prior knowledge and prior litigation exclusions bar coverage for an underlying lawsuit in Douglas Woo, et al. v. Scottsdale In.  Co., No. 14-56992, slip op. (9th Cir.  April 28, 2017).
Certain insureds sued for breach of contract and bad faith for its failure to defend and indemnify them in an underlying action by a creditor seeking to recover a judgment entered against them and the company’s CEO.   Both sides filed motions for summary judgment.
The prior litigation exclusion precluded coverage
Continue Reading 9th Circuit Affirms Application of Prior Litigation and Prior Loss Exclusions as Bar to Coverage

Washington’s Insurance Fair Conduct Act (IFCA) allows insureds to sue their insurers for an unreasonable denial of coverage or benefits, and recover triple damages if the insurer acts unreasonably or violates certain regulations. On February 2, 2017, the Washington Supreme Court ruled in Perez-Crisantos v. State Farm Fire & Cas. Co. that violation of IFCA regulations alone is not actionable as an independent cause of action.
The insurer denied a first-party underinsured motorist (UIM) claim on the grounds that the insured sought benefits for excessive chiropractic treatment and a surgery that was unrelated to the injuries sustained in the
Continue Reading Washington Supreme Court Rules Insured Cannot Maintain Independent Cause of Action for Regulatory Violations Under Washington’s Insurance Fair Conduct Act

In Joseph Shaheen v. Progressive Casualty Ins. Co., the 6th Circuit U.S. Court of Appeals determined that the insurer’s conduct did not satisfy the threshold standard for bad faith claims under Kentucky law.
In 2005, the insured, while intoxicated, struck and killed a pedestrian in a “hit and run.” After his arrest, the insured claimed he was not driving the vehicle on the night in question. Plaintiff pursued a civil action against the insured, the insured’s fraternity, the insured’s fraternity brothers and the bar where the insured had been drinking before the drunk-driving hit and run. After the insured
Continue Reading Insurer’s Conditional Offer to Pay the Policy Limit and Ensure Insured be Released was Not in Bad Faith