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 »
Extra-contractual Liability
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 »
Florida Senate Passes Legislation to Reform Litigation for Property Insurance Claims
Toward the end of the 2021 Florida legislative session, the Florida Senate passed Senate Bill 76, a bill that focuses on reducing litigation related to property insurance claims and also places restrictions on companies soliciting insureds to file roof claims. At the heart of SB 76 is the implementation of a presuit requirement that any claimant (who is not an assignee of the policy) must provide written notice of intent to initiate litigation to the insurer at least ... Keep Reading »
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 »
Eleventh Circuit Rejects Insurer-Defended Policyholder’s Bid to Expand Florida’s Bad Faith “Excess Judgment Rule” to Include Collusive Settlements Concocted Without Insurer’s Consent
In Cawthorn v. Auto-Owners Insurance Co., No. 18-12067 (11th Cir. Oct. 25, 2019), the Eleventh Circuit affirmed the U.S. District Court for the Middle District of Florida’s grant of summary judgment in favor of Auto-Owners Insurance Co., ruling that a consent judgment does not constitute an excess verdict, which is an essential element of a Florida bad faith claim. This appeal arose from an April 2014 underlying automobile accident in which David Cawthorn and Bradley ... Keep Reading »
Break Out Your Crystal Ball: New York’s First Department Relies on Policy’s Mitigation Provision as Support for Allegation That Consequential Damages Were Foreseeable
An insured sought coverage under its commercial property insurance policy for property damage incurred after construction work was performed in an adjoining building. Contending the insurer’s “investigatory process has taken so long and become so attenuated that the structural damage to the building has worsened,” the insured brought suit for breach of contract for failure to pay a covered loss under its insurance policy and breach of the implied covenant of good faith ... Keep Reading »
Nevada Supreme Court Holds That Insurer’s Liability for Breach of the Duty to Defend is Not Capped at Policy Limits
In Century Surety Company v. Dana Andrew (Dec. 13, 2018), the Nevada Supreme Court issued an opinion regarding whether, under Nevada law, the liability of an insurer that has breached its duty to defend, but not acted in bad faith, is capped at the policy limit plus any costs incurred by the insured in mounting a defense, or whether the insurer is liable for all losses consequential to the insurer's breach. Ryan Pretner ("Pretner") and Pretner's guardian (Respondents) ... Keep Reading »
When Evidentiary Error Matters: Eleventh Circuit Affirms Decision to Grant Retrial
The U.S. Court of Appeals for the Eleventh Circuit recently closed the book on litigation in which GEICO had been involved since 2010, holding that the granting of a retrial—which resulted in a GEICO victory after an initial verdict of more than $5 million had been rendered against the insurer—was warranted and appropriate. See Joshua Moore v. GEICO General Ins. Co., No. 17-13655 (11th Cir. Dec. 14, 2018). The story began with a rejected GEICO settlement offer following ... Keep Reading »
Dot the I’s and Cross the T’s: the Importance of Clarity in Claim Communications and the Availability of Punitive Damages for an Insurer’s Bad Faith Failure to Settle
The Georgia Court of Appeals recently made waves in Hughes v. First Acceptance Insurance Company of Georgia, Inc., 343 Ga. App. 693 (2017). First, it aggrandized the role of a jury in determining the existence of an offer to settle a claim where the text of purported offer letters was not in dispute. Second, it subtly reminded litigants that punitive damages are available in a bad faith failure-to-settle claim where the claim sounded in tort and had not been ... Keep Reading »
The Privilege Maintains Its Power: Texas Supreme Court Blocks Discovery of Insurer Attorney’s Billing Information
When (if ever) are an insurer’s attorney’s fees and billing information discoverable in a coverage dispute? Though the question is straightforward, the answer can vary from case to case and jurisdiction to jurisdiction. The Texas Supreme Court recently weighed in on the issue and found that an insurer’s attorney-billing information is not discoverable merely because the insurer challenges the insured’s request for attorney’s fees in coverage litigation. See In re Nat'l ... Keep Reading »