The Ninth Circuit determined that under California law, the insurer's failure to attempt to reach a settlement after it was reasonably clear that the insured's liability would exceed policy limits breached the covenant of good faith and fair dealing. Du v. Allstate Ins. Co., 2012 U.S. App. LEXIS 11755 (June 11, 2012 9th Cir.)
Bad Faith
Third-Party Beneficiary of Policy Can Maintain Bad Faith Action against Insurer
By Tred R. Eyerly on
The Wisconsin Court of Appeals acknowledged that the third-party beneficiary of a policy has a right to sue the insurer for bad faith. See Meleski v. Schbohm LLC, 2012 Wis. App. LEXIS 343 (Wis. Ct. App. May 1, 2012)
Plaintiff fell and injured herself on the insured's property. The insured's policy promised to "pay medical…
Federal District Court Continues to Find Construction Defects do Not Arise From An Occurrence
By Tred R. Eyerly on
Coverage for construction defects continues to be hotly contested in Hawaii state and federal courts. In a recent decision, Judge Mollway felt bound to follow the Ninth Circuit's decision in Burlington Ins. Co. v. Oceanic Design & Constr., Inc., 383 F.3d 940, 944 (9th Cir. 2004), where the court found construction defect claims…
Claims for Breach of Contract, Breach of Implied Covenant of Good Faith And Fair Dealing Can Be Based on Same Conduct
By Tred R. Eyerly on
The insured's claim for breach of the implied covenant of good faith and fair dealing was dismissed by the trial court because it was based on the same conduct as the breach of contract claim. See Columbia Cas. Co. v. 3M Co., 2012 Minn. App. LEXIS 23 (Minn. Ct. App. March 26, 2012).…
Consequential Damages Available If Insurer Breaches Duty to Defend
By Tred R. Eyerly on
The California Court of Appeals held that a carrier who breaches the duty to defend may be liable for consequential damages above policy limits. Carlson v. Century Surety Co., 2012 U.S. Dist. LEXIS 23119 (N.D. Cal. Feb. 23, 2012).
The underlying plaintiffs listed their home for sale with Prudential California Realty. Plaintiffs…
Insurer’s Motion for Summary Judgment on Bad Faith Issue Fails
By Tred R. Eyerly on
In a brief decision, the federal district court denied the insurer's motion for summary judgment on the insured's bad faith claims. Gulf Prod. Co. Inc. v. Hoover Oilfield Supply, Inc., 2012 U.S. Dist. LEXIS 3390 (E.D. La. Jan. 11, 2012).
The insured was sued for a defective flowline that allegedly splayed when pressure tested below…
Hawaii ICA Affirms Denial of Summary Judgment on Bad Faith Claim
By Tred R. Eyerly on
Following the jurisprudence set forth by the Hawaii Supreme Court, the Intermediate Court of Appeals affirmed the trial court's rejection of the insured's claim for bad faith. Stewart v. State Farm Mut. Auto. Co., 2012 Haw. Ct. App. LEXIS 148 (Haw. Ct. App. Feb. 10, 2012).
The ICA agreed with the insured that the trial…
Hawaii ICA Affirms Determination of No Bad Faith
By Tred R. Eyerly on
Shilo Willis was injured when the uninsured car in which she was a passenger was struck by another vehicle. Willis v. Swain, 2012 Haw. Ct. App. LEXIS 131 (Haw. Ct. App. Feb. 3, 2012). Willis was enrolled under a "certificate policy" which was provided under Hawaii's Joint Underwriting Plan (JUP) to drivers receiving public…
Economic or Physical Loss Not Required to Recover Emotional Distress Damages Caused by Bad Faith
By Tred R. Eyerly on
In perhaps its most significant insurance coverage decision since Young v. Allstate, 119 Haw. 403, 198 P.3d 666 (2008), the Hawaii Supreme Court ruled that an insured need not prove economic or physical loss caused by the insurer's bad faith in order to recover emotional distress damages. See Miller v. Hartford Life Ins. Co.…
Florida Court Prevents Simultaneous Trial of Breach of Contract And Bad Faith Issues
By Tred R. Eyerly on
Landmark American Insurance Company successfully moved to dismiss four of the insured's six counts. Landmark Am Ins. Co. v. Studio Imports, Ltd., Inc., Nos. 4D10-5001 and 4D10-5073 (Fla. Dist. Ct. App. Nov. 16, 2011). The trial court did not dismiss the breach of contract claim and the bad faith claim. Because both claims…