National Insurance Law Forum

National Insurance Law Forum

Published By The Attorneys of the National Insurance Law Forum

Category Archives: Bad Faith/Extra Contractual

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New Challenge to the ALI Restatement of the Law of Liability Insurance?

Posted in Bad Faith/Extra Contractual, Legislation, Liability Coverage, News
After seven years and countless drafts and revisions, the American Law Institute’s Restatement of the Law of Liability Insurance is scheduled for a final vote at the ALI’s Annual Meeting in Washington, D.C. on May 23, 2017.  Even as the project Reporters (Professors Tom Baker and Kyle Logue) start to contemplate life after this Restatement,… Continue Reading

Georgia’s Uninsured Motorist Statute Does Not Supersede Excess Policies’ Vertical Exhaustion Requirements

Posted in Additional Insured, Auto Liability Coverage, Bad Faith/Extra Contractual, Excess and Umbrella Insurance
In Coker v. American Guarantee & Liability Insurance Company, 825 F.3d 1287 (11th Cir. 2016), the Eleventh Circuit held that Georgia’s uninsured motorist (UM) statute did not supersede the vertical exhaustion requirements contained in the defendants’ excess policies. In this case, plaintiff Gary Coker was driving a truck owned by his employer, Ansco & Associates… Continue Reading

When Does The Statute of Limitations For An Insurer’s Failure to Settle Run?

Posted in Bad Faith/Extra Contractual
Although bad faith lawsuits against liability insurers for failing to settle within policy limits are all too common, there is significantly less case law addressing the issue of when such a cause of action accrues and, in particular, whether bad faith suits filed years after the fact may therefore be time-barred by applicable state statutes… Continue Reading

New York Court of Appeals Addresses Class Action “Occurrence” and Bad Faith

Posted in Bad Faith/Extra Contractual, Duty to Indemnify, Liability Coverage
A provocative new opinion from the New York Court of Appeals revisits the issue of when individual losses may be treated as involving one “occurrence” as well as novel issues with respect to whether an insurer may be liable in bad faith for negotiating a settlement that effectively strips the insured of coverage and whether… Continue Reading

Connecticut Mega-DJ Class Action Seeks New “Foundation” For Conspiracy Claims Against 113 Insurers

Posted in Bad Faith/Extra Contractual
A Connecticut law firm has filed an unusual proposed class action law suit in the federal district court in Bridgeport, claiming that over one hundred insurers have conspired over the years with the Insurance Services Office (ISO) eliminate coverage for damage to home foundations that were constructed years ago with defective concrete. In Halloran, et… Continue Reading

Three Cases You Need to Know for Northwest Insurance Law

Posted in Bad Faith/Extra Contractual, Duty to Defend, Duty to Indemnify, Uncategorized
1. Reasonable or Questionable? Generally, to establish bad faith, the insured must show that the insurer’s breach of the insurance contract was “unreasonable, frivolous or unfounded.”  Kirk v. Mt. Airy Ins. Co., 134 Wn.2d 558, 561, 951 P.2d 1124 (1998).  However, under Washington law, an insurer that fails to defend based on “a questionable interpretation… Continue Reading

Policyholder’s Claim against Insurer for Consequential Damages Survives Motion for Summary Dismissal

Posted in Bad Faith/Extra Contractual
In Mutual Association Administrators, Inc. v. National Union Fire Ins. Co. of Pittsburgh, PA, a New York appellate court affirmed a lower court order denying summary dismissal of a claim for consequential damages against an insurer arising from an alleged breach of the insurer’s obligation to defend and indemnify its policyholder in an underlying ERISA… Continue Reading

Obstacles to Class Actions on Insurance Matters

Posted in Bad Faith/Extra Contractual
Typically class actions and claims for insurance bad faith do not mix. This is for the simple reason that insurance bad faith actions usually involve individualized facts, individualized policies and separate claims handling. Uniform claims, therefore, are less prevalent in insurance bad faith, and thus less likely to satisfy the class action requirements under Civil Rule 23(a) of numerosity, commonality, typicality and adequate representation. However, class actions can nevertheless play a role in insurance bad faith claims and insurance coverage cases.… Continue Reading

New Consequences For Failing to Defend in West Virginia?

Posted in Bad Faith/Extra Contractual
The federal Fourth Circuit, which has historically had a reputation as being among the more conservative jurisdictions with respect to insurance coverage issues, has issued an unpublished opinion, declaring for the first time that policy holders may recover damages for “aggravation” and “inconvenience” resulting from the refusal of an insurer to provide a defense owed under… Continue Reading

California Guidance on Settlement Where Excess of Policy Limits Exposure

Posted in Bad Faith/Extra Contractual
In settling an insurance claim, the ground rule is reasonableness – on both sides. This was reiterated in a new decision from California’s appellate courts: Reid v. Mercury Ins. Co. (2013) __ Cal.App.4th __ (2013 Cal.App. LEXIS 798). In that case, the court affirmed the trial court’s ruling that there was no “bad faith” in… Continue Reading

Proactive Settlement

Posted in Bad Faith/Extra Contractual
In the recent Ninth Circuit decision, Du v. Allstate Insurance Company, 681 F.3d 118 (9th Cir. 2012) (applying California law) the court ruled an insurance company has a duty to attempt settlement when an insured’s liability is reasonably clear even if the claimant has not made any settlement demand within the insurance policy limits, and that… Continue Reading

Mississippi Court Recognizes Right of Excess Insurer to Sue Defense Counsel for Malpractice

Posted in Bad Faith/Extra Contractual
Although unexpectedly large jury verdicts have prompted disputes between excess and primary insurers for years, the phenomenon of excess carriers suing defense counsel hired by the primary insurer is relatively new. The issue presented in such cases is whether, in the absence of a direct attorney/client relationship, the excess carrier has any right to sue counsel… Continue Reading

SJC Drops The Hammer On MA Bad Faith Claims

Posted in Bad Faith/Extra Contractual
Massachusetts is one of a handful of states that allow third party claimants to sue liability insurers for failing to promptly settle their claims.  It is unique in allowing tort claimants to recover punitive damages in such cases.   In the wake of the Supreme Judicial Court’s ruling this week in Rhodes v. AIG Domestic Claims it is evident… Continue Reading

Consent Judgments And The Right To Intervene

Posted in Bad Faith/Extra Contractual
There is a wealth of case law concerning the extent to which insurers may be entitled to contest the merits of consent judgment settlements in which their policyholders assign their contractual (and extra-contractual) rights against the insurer in return for a covenant not to execute. As many insurers have discovered to their misfortune, moreover, much of… Continue Reading

New Rules For Discovery In Florida

Posted in Bad Faith/Extra Contractual
There hasn’t been much good news from Florida lately, particularly in the area of bad faith litigation.  In a rare bright note, however, the Florida Supreme Court has declared that the liberal rules that it adopted a few years ago requiring disclosure of work product in first party bad faith cases does not apply with respect to… Continue Reading

Gambling With Coverage: Primary Insurers and the Bad Faith Failure to Settle

Posted in Bad Faith/Extra Contractual
A recent Illinois opinion of the 7th Circuit has explored the extra contractual liability of a primary insurer that failed to give timely notice to its policyholder of the possibility that the claims against it would exceed its $1 million limit.  In so holding, the esteemed panel (Easterbrook, Posner, Tinder) held that primary insurer’s not… Continue Reading

Illinois Allows Subrogating INsurer to Recover Section 155 Fees

Posted in Bad Faith/Extra Contractual
Illinois law makes no express provision for awarding attorney’s fees to prevailing parties. However, Section 155 does allow recovery of such fees in cases where the insurer has acted vexatiously or unreasonably. A recent opinion of the Illinois Appellate Court has broadened this remedy to include insurers who pursue equitable contribution claims on behalf of… Continue Reading