AUGUST 2014 BAD FAITH CASES: COURT OBSERVES NEARLY 15 YEARS OF PRECEDENT THAT TERLETKSY REASONABLENESS PRONG IS AN OBJECTIVE TEST WHEN EVALUATING BAD FAITH CLAIMS, NOT REQUIRING ACTUAL SHOWING THAT INSURER CONSIDERED PARTICULAR BASIS FOR REASONABLENESS OF ARGUMENT FORMING A BASIS TO DECLINE COVERAGE OR DELAY SETTLEMENT, (Middle District)

In Bodnar v. Amco Insurance Company, without ruling on the matter, the court observed the potential issue of whether Terletsky’s “reasonableness” prong was to be…

AUGUST 2014 BAD FAITH CASES: FAILURE TO FOLLOW INVESTIGATIVE AND CLAIMS HANDLING STANDARDS IN INSURER’S OWN MANUAL, ADJUSTER’S FAILURE TO CONSULT WITH OTHERS AND GO BEYOND HER OWN CONCLUSIONS, AND FAILURE TO CONDUCT IME DEFEAT MOTION TO DENY BAD FAITH CLAIM (Western District)

Mineo v. Geico involved a UIM claim.  The insured was a Vietnam War Veteran who had suffered significant combat injuries during the War.  Years later…

AUGUST 2014 BAD FAITH CASES: COURT PERMITS DEPOSITIONS OF INSURER’S EXECUTIVE OFFICERS WHO WERE NOT DIRECTLY INVOLVED IN HANDLING A SPECIFIC CLAIM, ON THE THEORY THAT THE ACTUAL CLAIMS HANDLERS MAY BE FOLLOWING CORPORATE POLICIES OF THE INSURER THAT RESULTED IN THE ALLEGED BAD FAITH CLAIMS HANDLING (Middle District)

In Clemens v. New York Central Mutual Fire Insurance Company, the court addressed the propriety of deposing the insurer’s corporate officers in the context of…

AUGUST 2014 BAD FAITH CASES: THERE IS NO BAD FAITH CLAIM WHERE THE BREACH OF INSURANCE CONTRACT CLAIMS FAILED EITHER BECAUSE THERE WAS NO COVERAGE OR INSURER’S POSITION WAS REASONABLE; CONTRACT CLAIMS AGAINST THE INSURED CONTRACTOR FAILED BECAUSE THEY DO NOT CONSTITUTE AN OCCURRENCE UNDER KVAERNER OR AS “SUBCONTRACTED WORK PROPERTY DAMAGE”; OR ARE SUBJECT TO CGL EXCLUSIONS j(5) AND j(6), AND CONDUCT AT ISSUE IS OUTSIDE PRODUCTS COMPLETED OPERATION HAZARD; AND THERE IS NO DUTY TO DEFEND IN THE ABSENCE OF A SUIT (Third Circuit and Western District)

In Allegheny Design Management v. Travelers Indemnity Company of America, the insured was a general contractor with a commercial general liability policy. It hired a…