Bad Faith Breach of Contract

News & Analysis as of

Insurance News, Summer 2016

Eight Years after Bi-Economy and Panasia, What is the Law of Bad Faith in New York? Prior to 2008, the law of bad faith in New York seemed fairly well established. A claim for bad faith against an insurer, which might...more

Three Point Shot - Summer 2016

800-Meter Champion Berian Eventually Outpaces Nike Endorsement Suit... Or Did He? World 800-meter champion Boris Berian is seemingly capable of out-running just about anything these days. Berian is just a year removed...more

Don’t Mess with the Texas Prompt Payment of Claims Act: One Court’s Appraisal Result

Virtually all property insurance policies contain an appraisal clause, which outlines the appraisal procedure in broad terms. Those broad terms sometimes do not provide much guidance about the process, or about the effect...more

Liability for breach of obligations

Resolution of the Plenum of the Supreme Court of the Russian Federation No. 7 dated 24 March 2016 'On courts applying certain provisions of the Civil Code of the Russian Federation concerning liability for a breach of...more

No Right to Diminution in Value Damages Following First Party Payment for Costs of Vehicle Repair

In Baldwin v. AAA Northern California (No. A142217, filed 6/13/16), a California appeals court upheld an order sustaining an insurer’s demurrer without leave to amend, dismissing a breach of contract and bad faith lawsuit...more

Subrogation recovery did not violate the made-whole-rule and was not in bad faith per Wisconsin Sup. Ct.

It is highly unusual to find an insurance bad faith case which stems from an insurance company’s subrogation recovery. On July 6th, Wisconsin’s highest court had such a case, reversing the appellate court and holding that...more

Insurance Coverage – Genuine Dispute as Defense to Bad Faith

Clayton D. Paslay, et al. v. State Farm General Insurance Company - Court of Appeal, Second Appellate District (June 27, 2016) - Under the genuine dispute doctrine, an insurer denying or delaying the payment of...more

Genuine Dispute Defeats Both Bad Faith and Elder Abuse

The Paslays sued State Farm for failing to pay a portion of the damage caused to their Pacific Palisades house by a heavy rainstorm and for forcing them to move back into the house while it was still under construction. The...more

California's First District holding closes loophole for evading removal jurisdiction in insurance coverage declaratory relief...

California law has long held that the parent and controlling shareholder of an insured corporation has no standing to sue for breach of contract or bad faith under an insurance policy issued to the corporation. In a published...more

Illinois Appellate Court Holds That Legal Malpractice Claim Was Barred by Six-Year Statute of Repose, and Collateral Estoppel...

Prospect Development, LLC, et al v. Donald Kreger and Schiff Hardin, 2016 IL App (1st) 150433 - Brief Summary - Plaintiff sued a lawyer and his law firm for alleged legal malpractice arising out of the collapse of a...more

Colorado Supreme Court Limits Use of Extrinsic Evidence and Reasonable Expectations Doctrine

On Monday, the Colorado Supreme Court issued its decision in American Family Mut. Ins. Co. v. Hansen, No. 14SC99 (Colo. June 20, 2016), holding that extrinsic evidence can only be used to interpret ambiguous policy language,...more

Treble-Damage Awards as Penalties

Plaintiffs who prove violations of N.C. Gen. Stat. § 75-1.1 are automatically entitled to treble damages under N.C. Gen. Stat. § 75-16. The automatic trebling of damages for 75-1.1 claims often leads to substantial verdicts...more

Grateful Marijuana Grower Scores Coverage Victory in Colorado Federal Court

The Green Earth Wellness Center operates a retail medical marijuana business and adjacent growing facility in Colorado Springs, Colorado. In 2012, it purchased commercial insurance from Atain Specialty Insurance Company....more

Policyholder’s Bad Faith Claim Against Cyber-Insurer Survives Summary Judgment

In follow up on an older entry, the Court in Travelers Prop. Cas. Co. of Am. V. Fed. Recovery Servs., recently issued another order granting partial summary judgment in favor of a cyber-insurer, but also allowed the bad faith...more

Tennessee Court Interprets Meaning Of “Personal Effects” Under Property Policy

In Stevenson v. Am. Cas. Co. of Reading, Pa., 2016 Tenn. App. LEXIS 48 (January 27, 2016), the Tennessee court of appeals affirmed the granting of a motion for summary judgment in favor of an insurer with regard to whether an...more

New York Rescission Law Strikes Again: Lessons Learned From the Voiding of Heinz’s Product Contamination Insurance Policy

An increasingly popular tool in the insurer’s toolset is attempted rescission of the policy. This tool is particularly sharp if the law applicable to the construction of the policy is that of New York. Earlier this week, the...more

Insurance Recovery Law - January 2016

Despite Finding Policy Application Misrepresentation, Jury Rules Against Policy Rescission - Why it matters: A federal jury concluded that Starr Surplus Lines Insurance Company did not have a valid basis to rescind the...more

New York Court Dismisses Insureds’ Bad Faith and Fraud Claims

In its recent decision in Clement v. Farmington Cas. Co., 2015 U.S. Dist. LEXIS 152221 (S.D.N.Y. Nov. 10, 2015), the United States District Court for the Southern District of New York had occasion to consider what causes of...more

Insurance Recovery Law - October 2015

Unfair Trade Practices Exclusion Doesn't Cover Consumer Protection Suits - Why it matters: An unfair trade practices clause did not bar coverage for a policyholder's subsidiary, an Illinois federal court ruled, ordering...more

Bitcoin Week in Review 09.12.15 – 09.18.15

Below is a summary of some of the significant legal and regulatory actions that occurred over the past week. This alert is not intended to be a comprehensive list of all such developments, but rather a selection of...more

District of Colorado Grants Summary Judgment for Insurer on Bad Faith Claim Arising from Denial of Coverage Under E & O Policy

P&S LLC v. Nat’l Union Fire Ins. Co. of Pittsburgh, Pa., No. 14-cv-00735-LTB-CBS (D. Colo. July 29, 2015). District of Colorado grants summary judgment for insurer on bad faith claim where insurer established that an...more

Pennsylvania Supreme Court allows insured to settle without consent of insurer defending under reservation of rights

Bad faith claims can have major consequences for insurers. Stopping the Setup gets into the minds of plaintiffs' lawyers and addresses the ways they try to create bad-faith claims against insurance companies. This overview...more

Court of Appeals of Wisconsin: Insured Must Be “Made Whole” For Total Loss Before Insurer Can Recover Subrogated Funds

Dufour v. Progressive Classic Ins. Co., No. 2014AP157, 2015 WL 4275292 (Wis. Ct. App. July 16, 2015). The Court of Appeals of Wisconsin reverses the Circuit Court for Dodge County and remands for proceedings on damages...more

Insurance News, Summer 2015

The U.S. Senate Commerce Committee asked Michael Menapace to testify as an expert witness at a hearing called by the Subcommittee on Consumer Protection, Product Safety, Insurance and Data Security entitled, "Examining the...more

Eleventh Circuit: Inventory Computation Exclusion Bars Alabama Employee Theft Claim

In February, we reported on an Alabama federal court decision that barred an insured from recovering for employee theft where the only evidence of shortage was a comparison between computer records and a physical inventory...more

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