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Texas Amends Insurance Code In Response To Weather Claims

On May 26, 2017, Texas Governor Greg Abbot signed into law Texas House Bill 1774/Senate Bill 10. The new law makes changes to the Texas Insurance Code that will impact the way in which weather claims are brought and how those claims may be defended. The new law becomes effective on September 1, 2017. The amendments to the Texas Insurance Code add a new Chapter 542A, which governs certain consumer actions related to claims for property damage. Specifically, Chapter 542A applies to any first-party claim which arises from “damage to or loss of covered property caused, wholly or partly, by forces of nature, including an earthquake or earth tremor, a wildfire, a flood, a tornado, lightning, a hurricane, hail, wind,

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Ninth Circuit Finds Plausible Claim of Damages Avoids Dismissal of Bad Faith Lawsuit

Can an insurer be potentially liable for breach of contract or bad faith where the insured can only plead a plausible claim of damages? The Ninth Circuit has answered “yes” in a recent decision in the case of Beverly Burton v. The Prudential Insurance Company of America, No. 14-56721, 2016 U.S. App. LEXIS 18617 (9th Cir. October 18, 2016). The Court held that the lower district court erred in dismissing a claim for breach of the covenant of good faith and fair dealing where the Plaintiff has plausibly alleged that she incurred an economic loss, but where the relevant facts are known only to the carrier. In Burton, the Plaintiff asserted that Prudential failed to calculate interest on her son’s

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Cumis Counsel: An Insurer’s Right To Dispute Coverage Does Not Automatically Trigger A Right to Cumis Counsel

Recently, once again, a California appeals court weighed in on the scope of the right to Cumis counsel and the meaning of Cal. Civil Code §2860. St. Paul Mercury Insurance Company v. McMillin Homes Construction, Inc., No. 15cv1548 JM (BLM), 2016 WL 5464553 (S.D. Cal.) (decided on September 29, 2016).[1] The Cumis decision holds when a conflict of interest exists between an insurer and its insured arising out of possible non-coverage under the insurer’s policy, the insurer is obligated to offer independent counsel to the insured, which is to be paid for by the insurer. The classic example of an asserted conflict of interest, giving rise to a demand by an insured for independent counsel, is a complaint alleging the

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Posted in Bad Faith

Production of Insurance Company Claim Files In Bad Faith Litigation: Three Years After Cedell, Where Are We?

Bad faith litigation is complex and costly. In these types of cases, the discovery process often sets the initial tone of the lawsuit and the request for production of the insurer’s claim file is automatic. Typically, the insurer’s response is to produce a heavily redacted copy of its claim file, including a privilege log that cites the attorney-client privilege and work product doctrine as the bases for the redactions and withholdings. In response, the insured files a motion to compel, claiming that the attorney-client and work product privileges do not apply in bad faith litigation. The courts are left to decide if the insurer is required to produce a full and un-redacted copy of its claim files. Under Federal Rule

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Posted in Bad Faith
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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