The purpose of Florida’s “bad faith” statute is to “avoid unnecessary bad faith litigation.” To that end, the statute provides a civil remedy for any person damaged by an insurer’s conduct. However, as a condition precedent to filing suit, the policyholder must provide appropriate information to the Department of Insurance and the insurer by filing and serving a civil remedy notice (CRN). The CRN must specify the policyholder’s complaint and provide the insurer with a ... Keep Reading »
Bad Faith
Florida Supreme Court Defines Damages Recoverable by First-Party Insureds in Actions Alleging Breach of Policy
In Citizens Property Insurance Corp. v. Manor House, LLC, the Florida Supreme Court recently answered “no” to the following question certified as a matter of “great public importance”: In a first-party breach of insurance contract action brought by an insured against its insurer, not involving suit under section 624.155, Florida Statutes, does Florida law allow the insured to recover extra-contractual, consequential damages? The case involved a dispute over property ... Keep Reading »
Missouri Federal Court Finds New York Choice-of-Law Provision Does Not Inhibit Insured’s Assertion of Missouri-Specific Public Policy Statute Violation
In Maritz Holdings Inc. v. Certain Underwriters at Lloyd’s London, a federal court in Missouri denied an insurer’s motion to dismiss the insured’s assertion of a vexatious refusal to pay claim based on an obscure Missouri-specific public policy statute, despite the court’s acknowledgment that the subject insurance contracts were governed by their New York choice-of-law provisions. This insurance coverage dispute stemmed from alleged losses following two separate ... Keep Reading »
Florida Appellate Court Affirms Dismissal of First-Party Bad Faith Suit Based on Insured’s Deficient Statutory Pre-Suit Notice
In Julien v. United Prop. & Casualty Insurance Company, 45 Fla. L. Weekly D2199 (Fla. 4th DCA Sept. 23, 2020), Florida’s Fourth District Court of Appeals affirmed the dismissal of a first-party bad faith lawsuit due to the lack of specificity in the pre-suit civil remedy notice of insurer violations filed by the insured. Overview of Civil Remedy Notice Requirement In Florida, first-party bad faith claims are a creature of statute. No cause of action exists under ... Keep Reading »
Minnesota Supreme Court’s First Opinion on the State’s Bad Faith Statute
The Minnesota Supreme Court in the matter of Alison Joel Peterson v. Western National Mutual Insurance Company, 946 N.W.2d 903 (Minn. 2020) opined for the first time on the state’s bad faith statute (Minn. Stat. § 604.18) and weighed in on the interpretation of the two prongs contained within the statute. The statute provides the following two prongs that must be determined for a court to award bad faith damages to an insured against the insurer: the absence of a ... Keep Reading »
Washington Federal Court Finds Attorney-Client Privilege Waived by Claims Handler’s Inadvertent Disclosure of In-House Counsel’s Coverage Opinion to Defense Counsel
A federal district court in Washington recently held that a claims handling mishap resulted in a waiver of the attorney-client privilege otherwise protecting a coverage opinion provided by the insurer’s internal legal department. The Underlying Action & Internal Claims Handling Phoenix issued a liability policy to Diamond Plastics Corporation (Diamond), which supplied sewer and water pipes to H.D. Fowler (Fowler). The pipes were installed during a utility ... Keep Reading »
Years of Embezzlement Precluded From Coverage Under E&O Policy’s Commingling Exclusion
A federal district court in North Dakota recently granted an insurer’s motion to dismiss in Campbell Property Management LLC v. Lloyd’s Syndicate 3624, finding that both prongs of a “commingling exclusion” to coverage applied. The court granted the insurer’s motion to dismiss the breach of contract and bad faith claims asserted by Campbell Property Management, finding that there was no coverage for the subject acts, and thus there could be no bad faith. Lloyd’s issued ... Keep Reading »
Pennsylvania Court Ices General Reservation of Rights Letters: Insurers Must Specify “Emergent Coverage Issues”
In Selective Way Insurance Co. v. MAK Services Inc., the Superior Court of Pennsylvania reversed an insurer-favorable summary judgment after finding that its reservation of rights letter was insufficient. Following what appeared to be a standard slip-and-fall case, an insurer provided a defense under a reservation of rights to its insured — a snow and ice removal company. Astonishingly, the policy contained a snow and ice removal exclusion, barring coverage for bodily ... Keep Reading »
New York Court of Appeals Affirms GBL § 349 and § 350 Claims Must Have Widespread Effect on Consumers
Twenty-five years ago, the New York Court of Appeals ruled that a claim under General Business Law section 349 does not lie when the plaintiff alleges only "a private contract dispute over policy coverage and the processing of a claim which is unique to the[] parties, not conduct which affects the consuming public at large." N.Y. Univ. v. Cont'l Ins. Co., 87 N.Y.2d 308, 321 (1995). Recently, the court was asked a different question: where an insurance contract, ... Keep Reading »
A New Bad Faith Trend Emerges in COVID-19 Business Interruption Litigation
With governments across the world ordering the shutdown of restaurants, bars, and other “non-essential” businesses due to the COVID-19 pandemic, business interruption insurance claims are, not surprisingly, on the rise. While typical commercial property policies require “direct physical loss or damage” to property — a requirement that is unlikely satisfied by the shutdowns — policyholders are getting creative, alleging that the potential presence of the novel coronavirus ... Keep Reading »
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