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Sixth Circuit Blurs Line Between Primary and Excess

The Sixth Circuit recently addressed the question of whether an excess insurer must provide a defense when the primary insurer fails to do so. In IMG Worldwide v. Westchester Fire Insurance Company, No. 3836 (6th Cir. July...more

The Latest on the Use of Retained Asset Accounts to Pay Life Insurance Benefits

In Merrimon v. Unum Life Insurance Co. of America, 2014 WL 2960024 (1st Cir. July 2, 2014), the U.S. Court of Appeals for the First Circuit became the third circuit court to approve an insurance company’s use of a retained...more

Fourth Circuit Rejects Widow’s Claim for Equitable Relief

The Fourth Circuit recently rejected fiduciary breach and equitable estoppel claims for life insurance coverage by Leslie Moon, the widow of a deceased employee, who claimed that the employer’s actions resulted in Mr. Moon’s...more

Court Finds Communications With Reinsurers Discoverable In Coverage Dispute

A federal court in Minnesota determined that an umbrella insurer’s communications with its reinsurers are discoverable in a coverage dispute. The case is titled National Union v. Donaldson Co., and the focus is on the scope...more

Bad Faith Sentinel - July 2014

In This Issue: - Eleventh Circuit: Excess Insurer, Like All Florida Bad Faith Claimants, Must Prove Causation to Succeed on Bad Faith Claim Against Primary Insurer - Northern District of Alabama: No Bad Faith...more

Western District of Texas: An Expert Must Base a Determination of Bad Faith on the Facts Available to the Insurer When it Acted

Falcon v. State Farm Lloyds, No. 1:12-CV-491-DAE, 2014 WL 2711849 (W.D. Tex. June 16, 2014) - The Western District of Texas finds that a policyholder’s expert witness is not qualified to opine when he does not...more

Northern District of Alabama: No Bad Faith Where Insured Made Misrepresentations in Court Filings and Insurer Reasonably Relied on...

The Northern District of Alabama finds that an insurer did not act in bad faith by denying coverage for damage caused by a house fire where investigators suspected arson, the insured made misrepresentations in bankruptcy...more

Eleventh Circuit: Excess Insurer, Like All Florida Bad Faith Claimants, Must Prove Causation to Succeed on Bad Faith Claim Against...

Westchester Fire Insurance Co. v. Mid-Continent Casualty Co., No. 13-12932, 2014 WL 2766764 (11th Cir. Jun. 19, 2014) - The Eleventh Circuit finds that a primary insurer did not act in bad faith by failing to inform...more

California Court Allows Uninsured Motorist Bad Faith Suit to Proceed

In its recent decision in Maslo v. Ameriprise Auto & Home Insurance, 2014 Cal. App. LEXIS 564 (Cal. App. June 27, 2014), the California Court of Appeals for the Second Appellate District had occasion to consider whether an...more

"Non-Trivial Probability" of Excess Judgment Obligates Insurer to Pay for Independent Defense Counsel

The court in Perma-Pipe, Inc. v. Liberty Surplus Insurance Corporation, Case No. 13 C 2989, 2014 U.S. Dist. LEXIS 54867 (N.D. Ill. April 21, 2014), held that a CGL insurer breached its duty to defend by refusing to pay for...more

Eleventh Circuit Rejects Excess Insurers Bad Faith Claim Against Primary Insurer Due to Lack of Damages Causation

The Eleventh Circuit Court of Appeals reversed a Florida district court’s award of damages to the excess insurer on the ground that the excess insurer failed to prove the primary insurer’s alleged bad faith had caused the...more

Tenth Circuit (Applying Colorado Law) Upholds Summary Judgment In Favor Of Insurer On Earth Movement And Water Damage Exclusions

Wagner v. Am. Family Mut. Ins. Co., No.: 13-1438, 2014 U.S. App. LEXIS 11526 (10th Cir. June 19, 2014) arose from a claim by a property owner under a homeowner’s insurance policy issued to her by American Family Mutual...more

Lawsuit Against Medtronic Alleges Racketeering Over Infuse Bone Graft

When one big industry sues another we learn a lot about how business as usual is conducted. In this case Humana, a giant health insurer, has sued the medical device company Medtronic, maker of the Infuse bone graft. ...more

D&O Insurers Take Note: U.S. Supreme Court Modifies the “Basic” Game

Yesterday, the U.S. Supreme Court issued a unanimous¹ decision in the securities fraud case, Halliburton Co. v. Erica P. John Fund, which was highly anticipated by many who follow the federal securities laws, including D&O...more

Bad Faith Sentinel - June 2014

In This Issue: - Court of Appeals of the State of Washington: Bad Faith Damages May Exceed the Amount of a Reasonable Covenant - Southern District of Mississippi: Insurer Providing Coverage Opinion to Insured...more

Court of Appeals of the State of Washington: Bad Faith Damages May Exceed the Amount of a Reasonable Covenant Judgment

Miller v. Kenny, No. 68594-5-I, 2014 WL 1672946 (Wash. Ct. App. Apr. 28, 2014) - The Court of Appeals of the State of Washington held that a reasonable covenant judgment, consisting of the total liability of the...more

Southern District of Mississippi: Insurer Providing Coverage Opinion to Insured Constitutes Waiver of Attorney-Client Privilege...

Willis v. Allstate Ins. Co., No. 2:13-CV-60-KS-MTP, 2014 WL 1882387 (S.D. Miss. May 12, 2014). The Southern District of Mississippi held that neither the attorney-client privilege nor the work product doctrine protected...more

Disparate No Longer: California Supreme Court Resolves Split in Approach to Product Disparagement Coverage

Over the past 10 years, there has been an increase in lawsuits between business competitors, with claims that one business is unfairly gaining a competitive advantage over the other. These cases, involving allegations of...more

California Court of Appeals: Insurer Liable for Settlement Negotiated by Insured

California Court of Appeals affirms a jury verdict finding an insurer liable for settlement costs of its insured when the insurer refused to defend its insured in bad faith. San Diego Apartment Brokers (“Brokers”)...more

Not Feeling It: Court Nixes Claim for Feng Shui Fees and Finds No Bad Faith

In Patel v. American Economy Ins. Co., — F. Supp. 2d. —, 2014 WL 1862211 (N.D. Cal. May 8, 2014), the U.S. District Court for the Northern District of California granted the insurer’s motion for partial summary judgment,...more

CFPB orders New Jersey title services company to pay for illegal mortgage referrals

On June 12, the CFPB announced that it has issued a Consent Order under which a New Jersey title services company, Stonebridge Title Services Inc., agreed to pay a $30,000 civil money penalty for paying illegal kickbacks for...more

Southern District of New York: Bad Faith Claim Based on Underlying Contract Claim Must be Dismissed as Duplicative

Orange v. The Travelers Indemnity Co., No. 7:13-CV-06790-NSR (S.D.N.Y. May 14, 2014). The Southern District of New York granted an insurer’s partial motion to dismiss insured’s separate claim of bad faith as...more

Equitable Surcharge Awarded to Life Insurance Plan Beneficiary

A federal district court in California awarded relief in the form of surcharge to a life insurance plan beneficiary who claimed that a plan administrator failed to provide complete and accurate information in response to...more

District Court Seeks to Streamline Hurricane Sandy Insurance Cases Through Dismissals

Yesterday, in the In re Hurricane Sandy Cases, Civil Action No.: 1:14-mc-00041-CLP-GRB-RER, a committee of magistrates in the Eastern District of New York recommended that the district judges presiding over more than 150...more

Is Your D&O Policy Ready For The Halliburton Decision?

Any day now the United States Supreme Court will announce its decision in Halliburton Co. v. Erica P. John Fund, Inc. If the Supreme Court rules to neither reject nor affirm “fraud on the market,” the importance of event...more

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