If the insurer notifies the insured it intends to settle a claim, but will then seek reimbursement if the claim is not covered, can the insured avoid having to reimburse the insurer? The California Court of Appeal answered no in Am. Modern Home Ins. Co. v. Fahmian, 2011 Cal. App. LEXIS 420 (Cal.
Bad Faith
Bad Faith Suit Pursued After Settlement Dismissed
By Tred R. Eyerly on
Can an insured settle a disputed claim with its first party insurer and then sue the insurer for allegedly fraudulently inducing a settlement of the claim for less than it is worth? The California Supreme Court answered no in Village Northridge Homeowners Assoc. v. State Farm Fire and Cas. Co., 2010 Cal. LEXIS…
Insurer’s Reliance on Mistake to Deny Coverage May be Bad Faith
By Tred R. Eyerly on
Is an insurer exposed to bad faith if it relies upon its own mistake to withhold payment under the policy? The court answered yes in Lundy Enterprises, LLC v. Wausau Underwriters Ins. Co., No. 06-3509, 2009 U.S. Dist. LEXIS 121295 (E.D. La. Dec. 30, 2009).
Wausau provided commercial property coverage for the insured's…
Additional Insureds Not Entitled to Notice of Policy’s Cancellation
By Tred R. Eyerly on
Defendants were sued in an underlying state court action. See Riverport Ins. Co. v. Oakland Cmty. Housing, Inc., No. C 08-3883, 2009 U.S. Dist. LEXIS 104472 (N.D. Cal. Nov. 6, 2009). Defendants were additional insureds under a policy issued by Riverport. In its coverage action for declaratory judgment, Riverport secured an order awarding summary judgment that determined there…
Dismissal of Excess Carriers Reversed
By Tred R. Eyerly on
The insured Condominium Association had primary and excess coverage. See El-Ad Residences at Miramar Condo. Assoc. v. Mt. Hawley Ins. Co., 2009 U.S. Dist. LEXIS 92216 (S.D. Fla. Sept. 24, 2009). Significant property damage was caused by Hurricane Wilma. The insured alleged that three years after the hurricane, the insurers failed to adjust…
Insured’s Claim for Workers’ Compensation Benefits Survives Summary Judgment
By Tred R. Eyerly on
Whether the insured was acting within the course and scope of his employment contract was at issue when the Eighth Circuit Circuit reversed the District Court's determination of no workers' compensation coverage in Merriam v. National Union Fire Ins. Co. of Pittsburgh, Pennsylvania, No. 08-3547, 2009 U.S. App. LEXIS 15698 (8th Cir. July 17, 2009).
Claim for Failure to Act in Good Faith Survives Motion to Dismiss
By Tred R. Eyerly on
In Cecilia Schwaber Trust Two v. Hartford Accident and Indemn. Co., No. JFM-06-0956, 2009 U.S. Dist. LEXIS 59788 (D. Md. July 14, 2009), Hartford unsuccessfully moved to dispose of the insured's claim for failure to act in good faith.
Hartford's policy covered the insured's warehouse for the period March 1, 2002…
Bad Faith Claims Based on Insurer’s Lack of Concern Denied
By Tred R. Eyerly on
Bad faith and coverage for looting were at issue in Spears v. State Farm Ins. Co., No. 08-3183, 2009 U.S. Dist. LEXIS 49554 (E. D. La. June 12, 2009). The insureds' home was damaged by Hurricane Katrina on August 29, 2005. A homeowner's policy issued by State Farm provided coverage of up to $179,700 for dwelling and up…
Kauai Trial Court Finds Workers’ Compensation Carrier’s Delayed Payment in Bad Faith
By Tred R. Eyerly on
In our last post [here] we discussed a decision from the Oklahoma Supreme Court recognizing a bad faith claim against a workers' compensation insurer. My Damon Key colleague and fellow blogger, Mark Murakami (hawaiioceanlaw.com), informed me of a similar case winding its way through the trial court on Kauai. See Ordonez v. Hawaii Employers Mutual Ins. …
Bad Faith Established against Workers’ Compensation Carrier
By Tred R. Eyerly on
In Summers v. Zurich Am. Ins. Co., No. 105617 (Okla. May 26, 2009) [here], the Oklahoma Supreme Court addressed confusion under state law in a establishing a bad faith claim against a workers' compensation carrier.
Ms. Summers was injured in March 2004 while employed at Walmart. She was an insured under a workers' compensation policy…