APRIL 2014 BAD FAITH CASES: INSURED STATED CLAIM FOR COMMON LAW CONTRACTUAL BAD FAITH UNDER BIRTH CENTER AND COWDEN FOR COMPENSATORY DAMAGES, INCLUDING POSSIBILITY OF RECOVERING DAMAGES FOR EMOTIONAL DISTRESS; AND THE COURT PERMITTED THE CASE TO PROCEED ON BAD FAITH THEORY THAT THE INSURER SOUGHT A GLOBAL SETTLEMENT OF UNDERLYING COVERAGE AND BAD FAITH CLAIMS, EVEN THOUGH COURT QUESTIONED THE STRENGTH OF THAT POSITION (Philadelphia Federal)

In Perrugia v. American Home Assurance Company, the District Court revisited principles of common law contractual bad faith claims under Cowden and Birth Center, and…

APRIL 2014 BAD FAITH CASES: FEDERAL DISTRICT JUDGE PROVIDES DETAILED ANALYSIS ON PROPER SCOPE OF DISCOVERY IN UIM BAD FAITH CASE AS TO RESERVES, CLAIMS HANDLING DOCUMENTS AND PRACTICES, EVALUATING VALUE OF CLAIMS, RATIONALE FOR NON-PAYMENT, ADJUSTER’S MENTAL IMPRESSIONS, FILE REDACTION, AND DISCOVERABILITY OF OTHER BAD FAITH CLAIMS AGAINST THE SAME INSURER (Middle District)

In Keefer v. Erie Insurance Exchange, the court addressed the scope of discovery in a bad faith UIM context. The insurer had objected to producing…

APRIL 2014 BAD FAITH CASES: AFTER FINDING INSURER IMPROPERLY DENIED COVERAGE, COURT FOUND SUMMARY JUDGMENT MOTION ON BAD FAITH CLAIM PREMATURE, AS THE RECORD WAS INSUFFICIENT TO DETERMINE IF THE INSURER ACTED WITH KNOWLEDGE OR RECKLESS DISREGARD OF THE LACK OF A REASONABLE BASIS FOR DENYING THE INSUREDS’ CLAIM (New Jersey Federal)

In Tripoldi v. Universal North American Ins. Co., the insureds had attempted to construct a water proofing system in their basement, the results of which…

APRIL 2014 BAD FAITH CASES: NO BAD FAITH IN CLAIMS PROCESSING WHERE NO COVERAGE DUE AND COVERAGE WAS DISPUTED, AND WHERE FACTS DID NOT DEMOSTRATE THE KIND OF KNOWLEDGE OR RECKLESS DISREGARD TO ESTABLISH BAD FAITH (New Jersey Appellate Division)

In Johnson v. Plasser American Corporation, an excess carrier paid in its $4,000,000 policy limits to settle a severe personal injury case involving the insured’s…

APRIL 2014 BAD FAITH CASES: AN INSURED BUSINESS STATED A BAD FAITH CAUSE OF ACTION AGAINST ITS E&O CARRIER WHERE ITS ALLEGED CONDUCT, WHETHER LEGAL OR NOT, INVOLVED PROFESSIONAL SERVICES; AND AN EXCLUSION RELIED UPON BY THE CARRIER TO DENY COVERAGE, EVEN IF APPLICABLE, DID NOT COVER ALL CLAIMS IN UNDERLYING ACTION AND COULD NOT BE A BASIS TO DENY COVERAGE FOR ALL CLAIMS (Western District)

In Municipal Revenue Services v. Houston Casualty Company, plaintiffs were in the business of purchasing government tax liens.  A law firm accused plaintiffs of scheming…