Bad Faith

News & Analysis as of

Delaware Supreme Court Preserves Benefit of Exculpatory Provisions for Independent Directors at Motion to Dismiss Stage

A recent decision by the Delaware Supreme Court provides independent directors, such as special committee members, with the ability to escape protracted fiduciary duty litigation during its initial stages. The court’s...more

Court Holds That Trimming of Neighbor’s Trees is Not an Insured Accident or Occurrence

In Albert v. Mid-Century Insurance Co. (No. B257792, filed 4/28/15, ord. pub. 5/20/15), a California Court of Appeal held that an insured’s trimming of a neighbor’s trees which allegedly damaged the trees was not an accident...more

Delaware Supreme Court Clarifies That Section 102(b)(7) Charter Provisions May Be Basis For Dismissal At The Pleading Stage In...

On May 14, 2015, the Delaware Supreme Court clarified that, even in conflict-of-interest transactions subject to "entire fairness" review, breach of fiduciary duty claims against independent, disinterested directors should be...more

Real Property, Financial Services & Title Insurance Update: Weeks Ending May 15, 2015

REAL PROPERTY UPDATE - State-Created Entity/First-Party Bad Faith: immunity of Citizens, as provided in Section 627.351(6)(s), Florida Statutes, shields it from statutory first-party bad faith claims under Section...more

An Exercise of Business Judgment: Chancery Court Dismisses Shareholder Derivative Demand-Refused Case

Last week, Vice Chancellor Glasscock released an important decision dismissing a case under Rule 23.1 that was brought by a DuPont shareholder who alleged that the board improperly refused a demand to sue DuPont’s officers...more

Alabama’s High Court: No Contract Means No Bad Faith

In many states, pleading and proving the existence of a valid contract is necessary for both a breach of contract cause of action and also for a viable bad faith claim, and the Alabama Supreme Court addressed exactly that...more

Sixth Circuit Refuses to Create a Cause of Action for Reverse Bad Faith

In an opinion handed down last week, the Sixth Circuit Court of Appeals refused to adopt a new cause of action under Kentucky law for a reverse bad faith claim by an insurer against its insured where the Kentucky Supreme...more

Words Have Consequences: Insurer Narrowly Avoids Disclosing the Privileged Contents of Hundreds of Claim Files

It’s not news that plaintiffs’ lawyers contrive far-fetched rationales for rummaging through insurer’s records, but a recent case from South Dakota illustrates just how much discovery even flimsy arguments can...more

District of Colorado: “First-Party Claimant” Under State Bad Faith Statute is Not Synonymous With First-Party Bad Faith Under...

Nat’l Union Fire Ins. Co. of Pittsburgh, PA v. Intrawest ULC, et al., No. 13-cv-00079-PAB-KMT, 2015 WL 1326199 (D. Colo. Mar. 20, 2015). The U.S. District Court for the District of Colorado denies an insurer’s motion to...more

Delaware Dismisses Caremark Claim Against DuPont

The Delaware Court of Chancery recently dismissed a derivative action in Ironworkers District Council of Philadelphia & Vicinity Retirement & Pension Plan v. Andreotti et al. One of the many claims alleged was a Caremark...more

Bad Faith Bargainer Beware: D.C. Circuit Enforces Award of Negotiation Costs

Last year the NLRB demonstrated an increased willingness to award negotiation costs as a remedy for bad faith bargaining in cases that are far less egregious than those where the remedy historically was given. Hospital of...more

Middle District of Pennsylvania: Possibility of Bad Faith Exists Despite Payment of Claim Where Insured Alleges Untimely Claims...

Scheirer v. Nationwide Ins. Co. of Am., No. 3:13-CV-1397, 2015 WL 1013986 (M.D. Pa. Mar. 9, 2015). Middle District of Pennsylvania denies cross-motions for summary judgment on bad faith claim, holding that material...more

Georgia Supreme Court: Insurer did not “unreasonably” withhold consent to settle

In Piedmont Office Realty Trust v. XL Specialty Insurance Co., No. S15Q0418 (Ga. Apr. 20, 2015), the Georgia Supreme Court reiterated that, in the face of a policy provision prohibiting the insured from unilaterally settling...more

Neither a Borrower Nor a Lender be ...

Many lawyers have written articles about a February 27, 2015 U.S. Court of Appeals (11th Circuit) ruling (In re Maury Rosenberg) against petitioning creditors of an involuntary Chapter 7 proceeding. INTRODUCTION...more

Middle District of Pennsylvania: No Bad Faith Where Insurer’s Brief Inspection Yielded Reasonable Basis to Deny Claim

Boulware v. Liberty Ins. Corp., No. 3:13-CV-1541, 2015 WL 1219283 (M.D. Pa. Mar. 17, 2015). After a portion of the insured’s deck collapsed, the insurer denied coverage based on a brief inspection without hiring an...more

Another Frivolous Trade Secret Case: Court Finds Bad Faith in Cypress v. Maxim

Cypress Semiconductor Corporation and Maxim Integrated Products are two big Silicon Valley tech companies, both with an interest in touchscreen technologies. In February 2011, Maxim engaged a recruiter named Zion Mushel to...more

En Banc Mississippi Court of Appeals Affirms Summary Judgment for Insurer, Adjuster and Employer on Bad Faith Claims Arising from...

Chapman v. Coca-Cola Bottling Co., No. 2013-CA-01883-COA (Miss. Ct. App. Mar. 17, 2015). Ruling en banc, court affirms grant of summary judgment for insurer, adjuster and employer on bad faith claims brought by former...more

Don’t Terminate Me —Bro!

Due to under-funded Superior Courts, it is more and more difficult to enforce discovery. Therefore, a “new breed” of litigator is growing that is trying to game the otherwise self-executing discovery process. When they...more

Discovery Of Reserve And Reinsurance Information Permitted In Coverage And Bad Faith Action Against Insurers

A federal district court in Colorado has denied motions for a protective order filed by the insurers in a coverage litigation where Cantex, a third-party assignee to claims against the insurers, asserts causes of action for...more

Court Of Chancery Explains How To Prove Bad Faith

While not a corporate case, this decision is useful in explaining how to prove a party acted in bad faith so as to be outside the exculpation provisions of a trust or Sec. 102(b)(7). ...more

Bad Faith Sentinel - April 2015

In This Issue: - En Banc Mississippi Court of Appeals Affirms Summary Judgment for Insurer, Adjuster and Employer on Bad Faith Claims Arising from Denial of Coverage and Benefits for Work-Related Injury -...more

District Court Rules On Discovery In Bad Faith Case

In a dispute between the excess and primary liability insurance carriers of a common insured based upon the primary insurer’s alleged breach of the duty to defend the common insured, the U.S. District Court for the Eastern...more

4th Circuit Finds Insurer Was Not Required to Provide Notice Prior to Cancelling Life Insurance Policy for Unpaid Premium

An insured’s failure to make payments on his life insurance policy led it to lapse before his death according to Fourth Circuit Court of Appeals in Wactor v. Jackson National Life Insurance Co., No. 13-2367, 2015 WL 1020653...more

Everest Indemnity Insurance Company v. Rea - Court Addresses Whether Insurance Company’s Consult With Counsel Constitutes Waiver...

Rudolfo Brothers Plastering, Inc. claimed that Everest Indemnity Insurance Company acted in bad faith by entering into a settlement agreement that exhausted the liability coverage of an Owner Controlled Insurance Program...more

Washington Insurance Law - 2014 Year in Review

Introduction: During the final six months of 2014, Washington judges issued several notable insurance-related decisions. As was the case during the first six months of 2014, many of those decisions were favorable to...more

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