If at first you don’t succeed, try, try again. An age-old adage that now provides critical guidance for insurers seeking to protect themselves in the face of bad faith failure to settle claims. In McGranahan v. Geico Indemnity Co., Michael McGranahan appealed a California district court’s order against him that granted Geico’s motion for summary judgment. In the district court, McGranahan asserted that Geico breached the implied covenant of good faith and fair dealing ... Keep Reading »
Bad Faith
Seventh Circuit Holds Liability Carrier Did Not Act in Bad Faith by Paying Underinsured Motorist Benefits After Four Years of Negotiations
In Wolf v. Riverport Insurance Co., the Seventh Circuit Court of Appeals affirmed the district court’s holding, under Illinois law, that an underinsured motorist insurer did not breach its insurance contract, and no implied duty of good faith and fair dealing was implicated, where the insurer resolved the claimant’s claim for underinsured motorist benefits after negotiating with the claimant for four years. The claimant suffered multiple pelvic fractures as a result ... Keep Reading »
California Court Holds Intentional Acts Exclusion Bars Coverage for Shooting Claim Even Though Shooter Believed Gun Unloaded
In Helguera v. Mid-Century Insurance Co., California’s Fourth District Court of Appeal held that an intentional acts exclusion in the liability coverage part of a homeowners insurance policy issued by Mid-Century Insurance Co. barred coverage for an underlying wrongful death lawsuit. The court rejected the insured’s argument that the exclusion rendered coverage illusory. The underlying wrongful death lawsuit involved a shooting at a party at the insured’s house. ... Keep Reading »
Florida Overhauls Bad Faith Law, Repeals One-Way Attorneys’ Fee Statutes, Adopts Modified Comparative Negligence and Other Tort Reforms
On March 23, 2023, the Florida Legislature passed HB 837, a bill enacting major reforms to Florida tort law. Gov. Ron DeSantis wasted no time, signing the bill into law shortly after the bill was presented to him the next morning. Below is a summary of the many significant changes made to Florida laws, including changes to Florida's bad faith law, the repeal of one-way attorneys’ fee statutes, a reduction of the statute of limitations applicable to negligence actions, ... Keep Reading »
New California Time-Limited Demand Statute for Insurance Claims Effective Now
In an effort to promote early resolution of claims and remove ambiguity in bad faith litigation, the California legislature recently passed Senate Bill 1155. Effective January 1, 2023, the bill creates California Code of Civil Procedure Section 999 et seq., a set of rules detailing form requirements for time-limited demands, demand delivery procedures, and steps needed to accept or deny the demand. The scope of Section 999 is limited to demands brought prior to any suit ... Keep Reading »
Florida Insurance Reform Special Session 2 – This Time Means Business
Between 2017 and 2022, 11 property & casualty insurers domiciled in Florida were declared insolvent and placed into liquidation. In an attempt to restore stability to the marketplace, Governor Ron DeSantis issued a proclamation on April 26, 2022, calling the Florida Legislature into special session to reform Florida’s Insurance Code. While the ensuing May special session yielded significant changes, including amendments designed to reduce fraudulent roof claims and ... Keep Reading »
Ninth Circuit Finds Settlement and Two-Year Limitations Statute Barred “Bad Faith” Workers’ Compensation Suit by Man Struck by Lightning
In Larson v. Liberty Mutual Fire Insurance Co., the Ninth Circuit Court of Appeals affirmed that, under Hawaii law, unambiguous broad settlement release language and the two-year tort statute of limitations barred claims that Liberty Mutual Fire Insurance Co. somehow improperly handled a workers’ compensation claim. In February 2002, Lonnie Larson filed for workers’ compensation under his Liberty policy, claiming that he was struck by lightning during the course of ... Keep Reading »
10th Circuit Finds No Coverage Under All-Risk Policy for Building Damage Caused by Soil Collapse Triggered by Burst Water Pipe
In Naabani Twin Stars, LLC v. St. Paul Fire & Marine Insurance Co., the Tenth Circuit Court of Appeals held that St. Paul Fire and Marine Insurance Co. has no duty to cover damage that occurred when a building’s underlying soil collapsed, but not the building itself, due to a burst water pipe under an adjacent parking lot. In July 2016, a waterline under a parking lot, near a building owned by Naabani Twin Stars LLC and Twin Stars Limited, ruptured. Two ... Keep Reading »
Florida’s “Totality of Circumstances” Bad Faith Analysis Should Consider Claimant’s Actions as a “Factor” but Not a “Focus”
A recent decision of the Eleventh Circuit Court of Appeals limits the Florida Supreme Court’s approach to evaluating whether an insurer committed bad faith in handling a claim against its insured. In Harvey v. Geico General Insurance Co., the Florida Supreme Court (in a 4–3 decision) stated, four times, that “the focus in a bad faith case is not on the actions of the claimant but rather on those of the insurer in fulfilling its obligations to the insured.” In the ... Keep Reading »
Arizona Federal Court Finds False Pretenses Exclusion Bars Coverage for Fraudulent Wire Transfer Under Professional Liability Policy
In Helms v. Hanover Insurance Group Inc., the U.S. District Court for the District of Arizona weighed in on the issue whether a professional liability policy provided insurance for a fraudulent wire transfer. This decision is not the first to tackle this issue, and like the other opinions issued across the country, Helms demonstrates that the answer to this somewhat thorny question depends heavily on the specific policy wording at issue. The insured plaintiffs, a ... Keep Reading »
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