Monthly Archives: March 2013

No Bad Faith Recovery Unless Insured Demonstrates Acts Were A Producing Cause Of Damages

A jury found that Mid-Continent committed five separate violations of the Texas Insurance Code and awarded $2 million to the insured as compensation for the amount it paid to settle third-party claims.  The trial court, however, granted Mid-Continent’s motion for judgment to overturn the jury verdict.  Mid-Continent Cas. Co. v. Eland Energy, Inc., 795 F. Supp.2d 493 (N.D. Tex. 2011).  The insured appealed, and the United States Court of Appeals for the Fifth Circuit affirmed the award in favor of Mid-Continent.  Mid-Continent Cas. Co. v. Eland Energy, Inc., 2013 WL 656631 (5th Cir. Feb. 22, 2013). About The Author

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Posted in Texas Insurance Code

Prompt Payment of An Appraisal Award Bars Bad Faith Per Austin U.S. District Court, Although Some Acts By An Insurer May Leave The Door Open Per Galveston U.S. District Court

The United States District Court for the Western District of Texas in Austin recently held that an insurer’s timely payment of an appraisal award bars the insured’s extra-contractual tort claims. Michels v. Safeco Ins. Co. of Indiana, No. 1:12-cv-00511-SS (W.D. Tex. March 13, 2013). In Michels v. Safeco Ins. Co. of Indiana, the insured claimed smoke damage to his property as a result of wildfires and the parties disagreed as to the extent of the damage to the home. The insured initially invoked appraisal, and after the parties designated their appraisers, rescinded his appraisal demand. Thereafter, the insurer made its own demand for appraisal and obtained a court order compelling appraisal. After the appraisal award was entered, the insurer paid

Posted in Uncategorized

Bad Faith Claims Cannot Be Based Solely On Breach Of Contract And Must Allege More Than Conclusory Allegations

In Merrill v. State Farm Fire and Cas. Co., 2013 WL 588515 (W.D.Pa., Feb 13, 2013), the U.S. District Court for the Western District of Pennsylvania dismissed the insured’s common law bad faith claim because it was based solely on breach of the insurance policy and the insured’s statutory bad faith claim because the conclusory allegations were devoid of any facts and could not survive a motion to dismiss. State Farm found only minor damage to a pipe in the home and estimated $319.45 for repairs, which was below the homeowners’ $500.00 deductible.  The homeowners retained a public adjuster who found damages to be $22,647.00, but their proof of loss did not set forth details and merely stated the origin

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Posted in homeowners’ common law, Uncategorized
Avoiding Insurance Bad Faith
Cozen O’Connor represents insurance clients in jurisdictions throughout the U.S. against statutory and common law first- and third-party extracontractual claims for actual and consequential damages, penalties, punitive and exemplary damages, attorneys’ fees and costs, and coverage payments. Whether bad faith claims are addenda to a broader coverage matter or are central to the complaint, Cozen O’Connor attorneys know how to efficiently respond to extracontractual causes of action. More
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