Blog Archives

Virginia Holds Determination Whether Insurer Acted In Bad Faith Must Be Made By The Judge And Not The Jury

This country’s courts are split on whether the decision to award attorney’s fees in bad faith litigation should be made by the judge or the jury.  Earlier this fall, Virginia aligned itself firmly with the former in Revi, LLC v. Chicago Title Ins. Co., 776 S.E.2d 808 (Va., Sep. 17, 2015), holding 6-1 that the word “court” in the statute allowing an attorney’s fee award in such cases meant that the determination was one left to the trial judge. The insured purchased a five-acre parcel along the Potomac, intending to develop the property, only to discover that it was subject to National Park Service restrictions.  The policyholder’s title insurer then negotiated an agreement with the park service which removed most

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Alabama’s High Court: No Contract Means No Bad Faith

In many states, pleading and proving the existence of a valid contract is necessary for both a breach of contract cause of action and also for a viable bad faith claim, and the Alabama Supreme Court addressed exactly that issue last year in Alfa Life Ins. Corp. v. Kolza 159 So.3d 1240 (Ala., Aug. 22, 2014). The case involved a life insurance claim.  The plaintiff’s decedent had applied for a policy and filled out an application that misstated his driving record.  He then received a “Conditional Receipt” that afforded $100,000 in coverage while the application was pending.  He was subsequently given a medical examination that disclosed high cholesterol levels and a family history of heart disease.  He died in an

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Cozen’s Melissa White to Speak at the 2015 CLM Annual Conference

The Claims and Litigation Management Alliance (CLM) is a national organization created to meet the needs of insurance professionals in the claims and litigation management fields.  Founded in 2007, CLM currently has over 25,000 members.  It holds an annual conference each year with collaborative educational sessions focused on all facets of the insurance industry that is attended by 1800 people. This year’s conclave is in Palm Desert, California on Wednesday, March 25th, through Friday, March 27th, and one of the speakers is Cozen’s Melissa O’Loughlin White.  A link to the conference can be found here.  Melissa will be speaking at a Thursday afternoon session on “Institutional Bad Faith:  Are You Insulated?”  The presentation will share strategies crafted to reduce corporate

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Texas Supreme Court Accepts a Concurrent Cause and Ordinance or Law Matter Involving Hurricane Ike

On October 3rd, the Texas Supreme Court granted a policyholder’s petition for review in a Hurricane Ike matter that potentially gives Texas’ highest court an opportunity to address several important insurance issues.  They include concurrent cause in wind and flood losses and the insured’s burden of proof under policy provisions affording coverage when local ordinances mandate demolition and reconstruction and the authorities’ decision that those ordinances were triggered fails to differentiate between loss attributable to covered perils and loss attributable to excluded ones.  The case that is going up on appeal is Lexington Ins. Co. v. JAW The Pointe, LLC, 2013 WL 3968445, 2013 Tex. App. LEXIS 9602 (Tex.Ct.App. 2013). Policyholder JAW The Pointe owned an apartment complex in Galveston

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Alabama Supreme Court Clarifies (And Criticizes) Its Bad Faith Jurisprudence

In an opinion released for publication on August 14th, 2014, one year after issuance, the Alabama Supreme Court unanimously held that the state has but one tort of bad faith, albeit with two separate methods of proof, and that both of those – bad faith refusal to pay and bad faith refusal to investigate – require the policyholder to show that the insurer had no “reasonably legitimate or arguable reason” for not paying.  State Farm Fire & Cas. Co. v. Brechbill, 144 So.3d 248, 2013 Ala. LEXIS 126  (Ala., Sept. 27, 2013) also featured an unusual concurrence by Chief Justice Roy S. Moore in which the Chief Justice stated that he believed that the thirty-year-old judicially-adopted tort of bad faith

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Texas Supreme Court Weighs In Again on the Scope of the Material Breach Doctrine

Last week, the Texas Supreme Court handed down an opinion that involved the material breach doctrine.  The doctrine — adopted twenty years ago in Hernandez v. Gulf Group Lloyds, 875 S.W.2d 691 (Tex. 1994) and subsequently applied in PAJ, Inc. v. Hanover Ins. Co., 243 S.W.3d 630 (Tex. 2008), Prodigy Commc’ns  Corp. v. Agric. Excess & Surplus Ins. Co., 288 S.W.3d 374 (Tex. 2009), and Lennar Corp. v. Markel  Am.  Ins. Co., 413 S.W.3d 750 (Tex. 2013) – stands for the proposition that if the insurer receives its reasonably anticipated benefit despite an insured’s breach, then the breach is immaterial and the insurer is neither  prejudiced nor excused from performance. In the four cases cited above, policyholders were held entitled

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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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