Magistrate: Administrative Remedies Exhausted; Bad Faith Claims May Proceed
HOUSTON – The plaintiff in a workers’ compensation case received the necessary final administrative decision to permit her to pursue claims against her insurer in court, a Texas federal judge ruled Aug. 12, denying the insurer’s dismissal motion (Karen England v. Liberty Insurance Corp., et al., No. 4:10-cv-01937, S.D. Texas; 2011 U.S. Dist. LEXIS 90001).
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2nd Complaint Against Adjuster Barred By Res Judicata, Judge Rules
GREENVILLE, S.C. – A South Carolina federal judge on Aug. 9 determined that an insurer’s complaint seeking coverage from the insurer of a party in an underlying default judgment matter is barred by the doctrine of res judicata in light of the dismissal of a prior case that arose out of the same causes of action (National Specialty Insurance Co. v. AIG Domestic Claims Inc., et al., No. 6:10-cv-00826, D. S.C.; 2011 U.S. Dist. LEXIS 88321).
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3rd Circuit Affirms Dismissal Of Claims Against Insurer For Madoff Ponzi Losses
PHILADELPHIA – Affirming a lower court’s finding that an insurer was not responsible for the investment of its insured’s life insurance premiums, a Third Circuit U.S. Court of Appeals panel on Aug. 11 ruled that claims against it for loss of those funds were properly dismissed (The Michael S. Rulle Family Dynasty Trust v. AGL Life Assurance Co., No. 10-4034, 3rd Cir.; 2011 U.S. App. LEXIS 16687).
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Chemical Firm’s Bad Faith Counterclaim Dismissed In Superfund Coverage Dispute
CLEVELAND – The fact that an insurer filed a declaratory judgment action to determine its rights and obligations regarding coverage of its insured’s costs related to a Superfund cleanup site does not constitute bad faith, an Ohio federal judge ruled Aug. 10 (Arrowood Indemnity Co. v. The Lubrizol Corp., No. 1:10-cv-02871, N.D. Ohio; 2011 U.S. Dist. LEXIS 88480).
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Indiana Federal Judge Finds Inmate’s Bad Faith Claim Against Insurer Time-Barred
HAMMOND, Ind. – Regardless of whether an insured’s bad faith claim against his insurer is treated as a contractual claim or an independent tort claim, an Indiana federal judge on Aug. 15 held that it would be time-barred by the policy’s provisions or state law (John Trzeciak Sr. v. State Farm Fire & Casualty Co., No. 2:10-cv-00358, N.D. Ind.; 2011 U.S. Dist. LEXIS 90582).
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Alaska High Court Finds Judgment In Bad Faith Case Exceeded Motion’s Scope
JUNEAU, Alaska – Although the Alaska Supreme Court affirmed in an Aug. 19 ruling that an insurer did not breach its duty to settle by rejecting a settlement offer that exceeded policy limits, it held that a trial court’s order dismissing all claims against the insurer was broader than the relief sought in the insurer’s partial summary judgment motion (Zebuleon Whitney v. State Farm Mutual Automobile Insurance Co., No. S-13942, Alaska Sup.; 2011 Alas. LEXIS 83).
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5th Circuit Ruling Does Not Compel Reconsideration In Defects Case, Judge Says
JACKSON, Miss. – Despite an insurer’s instance that new case law and newly admitted evidence supported its position that it was not obligated to defend an additional insured in a construction defects case, a Mississippi federal judge on Aug. 18 found a previous ruling against the insurer to be well-founded and denied its motion for reconsideration (Carl E. Woodward LLC, et al. v. Acceptance Indemnity Co., et al., No. 09-781, S.D. Miss.; 2011; 2011 U.S. Dist. LEXIS 92659; See 1/27/11, Page 20).
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Without Notice, Insurer Had No Duty To Preserve Evidence, 10th Circuit Rules
DENVER – A 10th Circuit U.S. Court of Appeals panel on Aug. 17 found that two insureds could not show as a matter of law that it was reasonably foreseeable that potential evidence that was destroyed by their insurer would be relevant for a personal injury suit that was filed four years after an underlying car accident (Russell J. Johnson, et al. v. Liberty Mutual Fire Insurance Co., No. 10-1132, 10th Cir.; 2011 U.S. App. LEXIS 17020; See 9/24/09, Page 9).
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Judge Finds No Bad Faith In Insurer’s Denial Of Life Insurance Reinstatement
LOS ANGELES – It was reasonable for a life insurance provider to request medical records in conjunction with a reinstatement application for a lapsed policy, a California federal judge ruled Aug. 19, granting summary judgment to the insurer on bad faith and breach claims against it (BGI Life Inc. v. American General Life Insurance Co., et al., No. 2:09-cv-06822, C.D. Calif.; 2011 U.S. Dist. LEXIS 92892).
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Magistrate Judge Orders Trustee To Produce Internal Policies Documents
TULSA, Okla. – The trustee of a life insurance policy must produce any company internal policy or procedures for opening a fiduciary account or processing insurance applications, an Oklahoma federal magistrate ruled Aug. 4, granting an insurer’s motion to compel (Wells Fargo Bank, as trustee of the Joe Dicesare 2008 Irrevocable Life Insurance Trust v. The Lincoln National Life Insurance Co., No. 10-cv-703, N.D. Okla.; 2011 U.S. Dist. LEXIS 8641).
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