It feels like a black swan event: last month, in GEICO Gen. Ins. Co. v. Harvey, No. 4D15-2724 (Fla. Ct. App. Jan. 4, 2017), a Florida appellate panel unanimously overturned a jury verdict, on the ground that the plaintiff’s bad faith claim was insufficient as a matter of law. A dissection of this rara avis can yield some insight into the limits of judicial tolerance for claims against insurers. The Fatal Accident On August 8, 2006, James Harvey and John Potts ... Keep Reading »
Bad Faith
Eleventh Circuit Clarifies “Permanency” Requirement under Florida Bad Faith Statute
In Cadle v. GEICO Ins. Co., Case No. 15-11283 (11th Cir. Sept. 30, 2016), the Eleventh Circuit held that GEICO had not acted in bad faith when it failed to settle a claim after the insured did not provide any evidence of permanency during the cure period as is required by Florida law. With A Friend Like This… On July 2007, Catherine Cadle was rear-ended by Derek Friend, an underinsured motorist driving down I-95. Cadle had previously purchased insurance providing ... Keep Reading »
California Appellate Court Takes Equitable Subrogation to the Excess
In California, where a primary insurer is found to have unreasonably failed to settle within its policy limits, and a judgment is later entered against their insured in excess of those limits, the primary carrier can be liable to the insured for breach of an implied duty of good faith and fair dealing. And, where the insured’s excess carrier becomes liable for damages that exceed the limits of the primary policy as a result, that carrier may pursue an equitable ... Keep Reading »
Grateful Marijuana Grower Scores Coverage Victory in Colorado Federal Court
The refusal of the Senate to fill a Supreme Court vacancy has put gridlock back on the front page, as it leaves important questions about immigration and clean energy unresolved. Uncertainty about federal policy is also affecting other areas of American life, including one of our most popular pastimes. Recently, in The Green Earth Wellness Center, LLC v. Atain Specialty Ins. Co., No. 13-cv-03452-MSK-NYW (D. Colo. Feb. 17, 2016), a federal court in Colorado held that the ... Keep Reading »
For “At-Issue Waiver,” The Best Defense May Not Be An Affirmative Defense
Silence is argument carried out by other means. –Ernesto “Che” Guevara As this blog has repeatedly documented, it can be hard for insurers to assert the attorney-client privilege in the context of bad faith litigation. One difficulty arises in states that enforce a presumption against the privilege in bad faith suits. In many cases, insurers need to waive the privilege, to assert a defense based on advice of counsel. Last month, a federal court in South Carolina ... Keep Reading »
Eleventh Circuit Affirms Summary Judgment for Insurer on Basis of “Other Capacity” Exclusion
On June 22, 2015, the Eleventh Circuit affirmed the grant of summary judgment in favor of National Union Fire Insurance Company of Pittsburgh, Pa., in an action where the insured sought coverage under a D&O policy. The court found that the claim was excluded under a provision barring coverage for claims “arising out of” alleged misconduct in a capacity other than as a corporate officer and director, and that, accordingly, there was no bad faith as a matter of ... Keep Reading »
Florida’s Immune System: No First-Party Bad Faith Claims Against The State-Created Property Insurer
Earlier this month, in Citizens Property Insurance Corp. v. Perdido Sun Condominium Association, Inc., No. SC14-185 (Fla. May 14, 2015), the Supreme Court of Florida held that the immunity from suit granted to Citizens under its enabling statute, Fla. Stat. § 627.351(6), applies to the cause of action for an insurer's first-party bad faith that was created by a different statute, Fla. Stat. § 624.155(1)(b). Because Florida does not recognize a common law cause of action ... Keep Reading »
Georgia Supreme Court: Insurer Did Not “Unreasonably” Withhold Consent to Settle
In Piedmont Office Realty Trust v. XL Specialty Insurance Co., No. S15Q0418 (Ga. Apr. 20, 2015), the Georgia Supreme Court reiterated that, in the face of a policy provision prohibiting the insured from unilaterally settling a claim, the insured may not enter into a settlement and then seek coverage or assert a bad faith claim. Piedmont, the insured, was named as a defendant in a federal securities class action. Its defense was covered under both a $10 million ... Keep Reading »
Change is in the Air: New Jersey Justices Hold Their Noses While Siding with Insurer in UM Disputes
On February 18, 2015, the Supreme Court of New Jersey issued separate opinions in two first-party, uninsured motorist cases against the same auto insurer. Plaintiffs in both cases alleged that the insurer had acted in bad faith by forcing the insured to trial after losing an arbitration. The insurer won both cases, on the ground that its position each time had been "fairly debatable" as a matter of law. But New Jersey’s high court also suggested, in both cases, that ... Keep Reading »
Cooperate, Or Else
Cooperation is key. Or so says the 10th Circuit at least, in addressing an appeal from a district court's dismissal of an insured's action in which he failed to cooperate with his insurer's claim investigation. The 10th Circuit held that the insured, Kelly Bryant ("Bryant"), had not clearly demonstrated that the insurance company, Sagamore Insurance Company ("Sagamore"), breached its contract or otherwise acted unreasonably and in bad faith when it denied Bryant's claim ... Keep Reading »
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