Source: https://insuranceclaimsbadfaith.typepad.com/insurance_claims_badfaith/
Timestamp: 2019-04-25 11:42:04+00:00

Document:
Insurance Claims and Bad Faith Law -- Author's Note: Commercial Advertising Not Authorized; Unseal the Evidence.
It has been a long time since the testimony of many witnesses remain under seal from hearings held by the majority in the last previous Congress. It is time to unwrap the transcripts and make them public to the people who paid for it all: The taxpayers of the United States.
Unseal the testimony. Reveal the evidence. As was said by Mr. Justice Brandeis long ago and remains true today, "Sunlight is the best disinfectant."
Dennis Wall is currently at work on his fifth book. Based on his investigations into publicly available evidence in actual court files, it will address how concealed evidence and secret settlements take our money, foreclose on our homes, and change our lives.
FORECLOSURE DAMAGES FOR BAD FAITH.
In Shawnee Tabernacle Church v. Guideone Ins., No. 16-5728, 2019 WL 1779829, at *1 (E.D. Pa. April 23, 2019), the Court was confronted with a water loss and claims of breach of contract and insurer bad faith. The questions addressed in this particular decision were two: (1) Are damages for foreclosure recoverable here, and (2) What is the proper measure of those damages?
The Court's answers in this case were, first, that damages resulting from foreclosure are a form of consequential damages and are recoverable in such a case.
Second, the proper measure of damages here is the diminution in fair market value of the property as a result of the foreclosure.
LENDER FORCE-PLACED INSURANCE BAD FAITH IN THE 21st CENTURY.
Many cases present lender force-placed insurance (LFPI) claims based on alleged recent LFPI practices. In these cases, homeowners are successful in alleging at least some claims that their lenders and the lenders' servicers and force-placed insurance carriers add kickbacks and other unauthorized, unnecessary charges to the homeowners' monthly mortgage payments. See, e.g., Alpert v. Nationstar Mort. LLC, Case No. C15-1164 RAJ, 2019 WL 1200541, at *2 (W.D. Wash. March 14, 2019) (alleged LFPI policies from July 2012 through July 2016); Hibbs v. Wells Fargo Bank, N.A., No. 17-615-SDD-RLB, 2018 WL 3245050, at *2 (M.D. La. July 3, 2018) (lender force-placed flood insurance in 2016).
Some of these successful claims include alleged bad faith and unfair dealing. E.g., Gray v. CIT Bank, N.A., No. 18-1520 (RMB/AMD), 2018 WL 6804273, at *1-*2 (D.N.J. Dec. 27, 2018) (alleged LFPI practices from 2011 through 2017); cf. Wieck v. CIT Grp., Inc., 308 F. Supp. 3d 1093, 1120 n. 14 (D. Haw. 2018) (dismissing bad faith claims because there is no independent tort of "bad faith" in a "non-insurance" context under Hawaii law, but granting leave to amend breach-of-contract claim to include same allegations of bad faith and unfair dealing; case concerned allegedly unnecessary hurricane insurance placed in 2013 and backdated to 2011-2013).
The author is currently at work on an article about "'Quiet in the Courts!' Concealed Evidence and Secret Settlements: The Lender Force-Placed Insurance Model."
Tags: #confidential, #D. Hawaii, #D.N.J., #disclosure, #evidence, #lawsuit, #lender force placed insurance, #M.D. La., #public interest, #stipulated protective orders, #W.D. Wash.
TOWERS OF POWER? LAYERS OF EXCESS? COVERAGE ADDRESSED BY LABELS?
In COSTCO Wholesale Corp. v. Arrowood Indem. Co., NO. C17-1212RSL, 2019 WL 1330455 (W.D. Wash. March 25, 2019), a federal judge applied the express terms of an excess liability insurance policy. Of course, the federal judge also described the excess carrier's coverage as one "tower" of power, but that did not stop him from reading the policy.
The federal judge applied the particular carrier's excess insurance policy language to hold: First, that both the policyholder's, COSTCO's, and the carrier's, Arrowood's, respective motions for summary judgment were both granted in part and denied in part.
Second, Arrowood showed "no basis on which that amount [of Arrowood's payment toward an underlying settlement] should be reimbursed."
Third, the Court found that "the post-settlement arbitration costs paid by Arrowood - including mediator expenses, expert fees, and attorney’s fees - are recoverable “Loss” as long as they are reasonable, and the record does not support a finding that any particular invoice or portion of an invoice was unreasonable."
Finally, COSTCO was held not to be "entitled to recover expenses incurred on programmatic relief, however, or its attorney’s fees in this coverage litigation. Neither party is entitled to summary judgment on Costco’s tort and statutory claims."
COSTCO Wholesale Corp. v. Arrowood Indem. Co., NO. C17-1212RSL, 2019 WL 1330455, at *10 (W.D. Wash. March 25, 2019).
So, there you have it. No tower of power. Only judicial interpretation of insurance policy language, even the language of an insurance policy issued by an excess carrier. When it comes to judicial interpretation, hanging out in a tower is not a good escape.
CONSUMER PROTECTION CLAIMS FOR INSURER BAD FAITH.
Consumers have a right of action under Washington's Consumer Protection Act against their insurance carriers for breach of the duty of good faith and fair dealing, i.e., for insurer bad faith. This rule has been applied recently against a health insurance carrier accused of failing to deliver the insurance services for which it charged insurance premiums approved by the Washington State Office of the Insurance Commissioner.
In particular, the plaintiff-policyholder alleged that the defendants' "unfair or deceptive acts or practices in conducting its insurance business" consisted in pertinent part of failing to have in-network providers as represented, and failing to provide coverage represented by the defendants to be within the plan. Harvey v. Centene Mgt., Co. LLC, ___ F. Supp. 3d ___, No. 2:18-CV-00012-SMJ, 2018 U.S. Dist. LEXIS 198773, at *13-*14, 2018 WL 6112407, at *4 (E.D. Wash. Nov. 21, 2018).
Interested in current events? Take another look: READ BARR'S LETTER LIKE A LAWYER LIKE BARR from our sister blog, Claims and Issues.
EQUITABLE CONTRIBUTION BETWEEN INSURERS IN FLORIDA: DEFENSE? "NO," INDEMNITY? "YES."
ACE moves to dismiss this claim, arguing that Florida does not recognize a cause of action for equitable contribution between co-insurers. The flaw in this argument, however, is that Florida does not recognize a cause of action for equitable contribution by co-insurers in order to recover defense costs. [Federal citation omitted.] USAA is not seeking to recover its defense costs in the underlying litigation, and as such, this argument for dismissal has no merit.
Florida does recognize a cause of action for equitable contribution by co-insurers for the amounts the insurer paid to indemnify the insured.
Tags: #equitable contribution between insurers, #Florida, #M.D. Fla.
HAPPY ST. PATRICK'S DAY! On Saturday, March 16, 2019 I left these Comments on the CFPB's proposed new rule which would stay the 2017 Payday Loan Final Rule from taking effect. The last day to leave YOUR Comments on this particular proposed new rule is Monday, March 18, 2019.
DUTY TO DEFEND ARBITRATION? YES, IN THIS CASE.
In Gemini Ins. Co. v. Constrx Ltd., NO. 14-00355 DKW-RLP, 2018 WL 7508264 (D. Haw. September 24, 2018), the Court determined that a commercial general liability carrier owed a duty under its liability insurance policy to defend its policyholder in an arbitration. The reason? The policyholder could be subjected to liability and the liability policy had to provide defense coverage as a result. Simple as that, the Court ruled in effect.
HERE THERE'S POTENTIAL LIABILITY, SO HERE THERE'S DEFINITELY LIABILITY COVERAGE.
In Metropolitan Prop. & Cas. Ins. Co. v. Auto-Owners Mut. Ins. Co., ___ N.W.2d ___, No. 18-0129, 2019 WL 1086599 (Iowa March 8, 2019), two liability insurance carriers covered two at-least-nominally separate insureds.
One carrier issued what was described by the Court as a CGL policy to a limited liability company that owned a farmhouse.
The other carrier issued a homeowner's policy to at least one of the co-founders of the LLC. The co-founder was also apparently insured under the CGL policy as an officer of the LLC.
A loaded rifle was left at the farmhouse for several months. As loaded rifles will do, it accidentally discharged into a human being, killing him.
The Homeowner's carrier and the individual insured together "settled the death claim for $900,000 and sued the CGL insurer for reimbursement. The case proceeded to a bench trial, and the district court entered judgment against the CGL insurer for $450,000, rejecting various coverage defenses." Metropolitan Prop. & Cas. Ins. Co. v. Auto-Owners Mut. Ins. Co., ___ N.W.2d ___, No. 18-0129, 2019 WL 1086599, at *1 (Iowa March 8, 2019). On appeal to the Supreme Court of Iowa (bypassing the Iowa intermediate appellate court for some reason known only in Iowa perhaps), the Supreme Court of Iowa affirmed.
The principal fighting issue is whether the LLC, as owner of the farmhouse, had potential liability under a premises liability theory for a dangerous condition (the loaded, unsecured rifle left on a bed for several months). On our review, we conclude the district court correctly interpreted the CGL insurance contract, and its factual findings on potential liability and the reasonableness of the settlement are supported by substantial evidence. For the reasons explained below, we affirm the district court judgment.
Metropolitan Prop. & Cas. Ins. Co. v. Auto-Owners Mut. Ins. Co., ___ N.W.2d ___, No. 18-0129, 2019 WL 1086599, at *1 (Iowa March 8, 2019). That view of things naturally disposed of the CGL carrier's appeal. Where as here liability coverage follows potential liability, the likely result is pretty clear.
BAD FAITH IN THE NEW YORK ORGANIZATION?
Because Aon did business with Donald J. Trump and the Trump Organization, it was served with a 9-page subpoena on March 4, 2019. The return date on the subpoena is March 19.
"copies of all communications between Aon and Mr. Trump and the Trump organization"
"all internal Aon documents relating to Mr. Trump and the company"
"[records of] compensation for the current and former Aon employees who handled the Trump Organization account," including "information about their incentives, bonus payments or commissions."
"[S]imilar contracts and agreements between Aon and Mr. Trump."
See William K. Rashbaum and Ben Protess, Trump Businesses Draw Scrutiny From New York Over Insurance Policies, New York Times, Wednesday, March 6, 2019, p. A16 (the New York Times may require a subscription for access to the online version, https://www.nytimes.com/2019/03/05/nyregion/trump-aon-risk-services-subpoena.html).
This subpoena sounds an awful lot like the document requests I have dealt with for over 40 years in Insurance Bad Faith cases.
ET TU MALA FIDES, WILBUR?
Two Federal Judges in two different Federal Courts, one in California and the other in New York, have held trials about Secretary of Commerce Wilbur Ross's attempts to add a citizenship question to the 2020 Census and thereafter to conceal his reasons for doing so.
[T]he 126-page ruling by U.S. District Judge Richard Seeborg in San Francisco went further than a similar decision on Jan. 15 by Judge Jesse Furman in New York.
Fred Barbash, Wilbur Ross Broke Law, Violated Constitution in Census Decision, Judge Rules, Washington Post Online, posted Wednesday, March 6, 2019 (the Washington Post may require a subscription for access online).
POLICY AND THE FACTS TAKE AWAY "ANTI-CONCURRENT CAUSE" EXCLUSION.
The GENERAL EXCLUSIONS – Earth Movement and Settlement exclusion 1.b. does not apply with respect to coverage provided by this endorsement.
The GENERAL EXCLUSIONS – Loss caused by Sinkhole exclusion 1.i. does not apply with respect to coverage provided by this endorsement.
Accordingly, because the plain language of the sinkhole endorsement explicitly states that the anti-concurrent cause language found in section 1 of the policy does not apply to sinkhole claims, the anti-concurrent cause provision found in section 1 does not apply in the instant case so as to avoid application of the concurrent-cause doctrine.
Therefore, applying [Florida law established by the Florida Supreme Court in Sebo v. American Home Assur. Co., 208 So. 3d 694 (Fla. 2016)] to the instant case, we conclude that the trial court properly instructed the jury on the concurrent-cause doctrine, requiring it to determine if at least one of the concurrent causes was covered under the insurance policy.
Nonetheless, because the jury instructions in that case were confusing, the appellate court reversed the trial court's judgment entered on the jury's verdict for the policyholder, and remanded for a new trial.

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