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Eleventh Circuit: Jury Instruction About Notice to Insured of Settlement Demand Was Required (Florida)

In its recent decision, Brink v. Direct General Ins. Co., 38 F.4th 917 (11th Cir. 2022), the Eleventh Circuit ruled 2-1 that the Florida district court erred when it failed to instruct a jury that an insurer not only owed a duty to settle claims for its insured, but also owed a duty to advise its insured of settlement offers. This case arose from a vehicle incident resulting in serious injuries to the plaintiff, Dustin Brink. Brink later won over $12 million in a lawsuit against the at-fault driver, Juan Ruiz Pereles. To recover the judgment, Brink sued Pereles’ insurer, Direct General Insurance, for bad faith toward Pereles.[1] The jury returned a verdict in Direct General’s favor, but Brink argued

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Under Texas Law, No Tender Means No Obligation To Defend

The United States Court of Appeals for the Fifth Circuit recently affirmed a long-standing Texas rule: the duty to defend is not implicated unless the insured complies with the policy’s notice-of-suit requirements and demands a defense. Moreno v. Sentinel Ins. Co., Ltd., 35 F.4th 965, 975-77 (5th Cir. 2022). This rule applies even when an insurer knows of the lawsuit and defends an additional insured in the same case. About The Authors

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Texas Supreme Court Axes Policyholder’s Attempt to Expand Insurer Tort Liability

In Elephant Insurance Co., LLC v. Kenyon, the Supreme Court of Texas reiterated the framework of an insurer’s common-law duties to insureds under Texas law.[1] In applying that framework to the facts of the case, the Court rejected an attempt to expand an insurer’s obligations under existing common-law tort principles. The Court also refused to recognize new common-law duties, requiring insurers to protect or warn policyholders following car accidents. About The Author

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Avoid Creating Coverage By Estoppel, Waiver & Forfeiture: California

Waiver, estoppel and forfeiture are doctrines on which insureds often rely to try to create coverage outside the terms of the insurance policy. Insureds will often assert that they are entitled to such extra-contractual coverage based entirely on how the insurer handled the claim.  But under California law, these doctrines often do not apply, and an insurer can avoid a potential waiver, estoppel or forfeiture by communicating with the insured. Although the terms are often used interchangeably, the doctrines are different. Estoppel refers to conduct by the insurer that reasonably causes an insured to rely to his detriment. Waiver is an express or implicit intentional relinquishment of a known right demonstrated. And forfeiture is the assessment of a penalty against

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Georgia Supreme Court Clarifies Pre-Suit Offer Requirements

On March 6, 2017, the Georgia Supreme Court answered certified questions regarding the application of Georgia’s Pre-Suit Offer statute concluding that O.C.G.A. § 9-11-67.1, the statute dealing with the formation of settlement agreements pursuant to pre-suit offers to settle tort claims arising from the use of a motor vehicle, does not prohibit a claimant from conditioning acceptance of a pre-suit offer upon the performance of an act, such as timely or prompt payment. Grange Mutual Casualty Co. v. Woodard, 797 S.E.2d 814 (2017). In doing so, the Court clarified that the statute sets forth the minimum requirements for pre-suit offers. Beyond those required terms, the Court explained, parties are free to add additional terms. This includes presenting a pre-suit offer

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Posted in Bad Faith, Uncategorized

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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Texas Court: No Prejudice Required to Deny for Late Reporting Under a Claims-Made Policy

This summer in Nicholas Petroleum, Inc. v. Mid-Continent Cas. Co., 2015 WL 4456185, 2015  Tex. App. LEXIS 7489 (Tex.App., Jul. 21, 2015), a Dallas panel of Texas’ intermediate level appellate court rejected policyholder arguments that the insurer was  required to show prejudice before denying coverage under a claims-made policy based on the insured’s untimely reporting of the claim. Nicholas Petroleum owned and operated a gas station in Dallas, Texas.  Mid-Continent had issued Nicholas a Pollution Liability and Environmental Damage Policy that contained a condition precedent to coverage stating:  “In the event of a Claim under Coverage A, the Insured shall give us written notice as soon as possible but in any event no later than thirty (30) days after receipt

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Texas Supreme Court Declines Opportunity to Review Appellate Decision Clarifying Insurer’s Settlement Obligations In Multi-Plaintiff/Multi-Insured Context

Last year in Patterson, et al. v. Home State County Mut. Ins. Co., 2014 Tex. App. LEXIS 4460, 2014 WL 1676931 (Tex.App., Apr. 24, 2014), the Texas First Court of Appeals (Houston) held that an insurer was not obligated to accept a settlement demand unless that offer encompassed all claimants and released all insureds from liability.  On September 11th, the state’s highest court surprised many by denying the policyholders’ Petition for Writ of Error, and it thereby left the appellate panel’s ruling in place. The Underlying Case Diane Patterson died in a trucking accident when a truck driven by Charles Hitchens (Driver) rear-ended her car while stopped.  Allegedly, Driver tested positive for cocaine metabolites.  Patterson’s family, including her estate, husband,

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Eleventh Circuit Finds No Bad Faith in Multiple-Claimant Claims-Handing Situation

In a new decision, Mesa v. Clarendon National Ins. Co., 2015 WL 5059496, 2015 U.S. App. LEXIS 15203 (11th Cir., Aug. 28, 2015), the Court of Appeals found that the insurer’s claims-handling of multiple claimants did not rise to the level of bad faith under Florida law.   The decision affirmed the district court’s ruling granting summary judgment in favor of the carrier, and it provides valuable lessons to insurers handling sometimes difficult multiple-claimant scenarios. Mesa was one of four parties injured in an April 3, 2006 automobile accident caused by Cesar A. Vega Zelaya.  The bodily injury liability limits under the policy were $10,000 per person and $20,000 per accident.  The carrier received notice of the accident on April 24th

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Eastern District of Texas Rules that Insurer’s Delayed Acceptance of the Duty to Defend Constitutes a Breach of that Duty

In Yowell v. Seneca Specialty Ins. Co., 2015 WL 4575450, 2015 U.S. Dist. LEXIS 98719 (E.D.Tex., Jul. 28, 2015), the Eastern District of Texas ruled that an insurer’s unexplained, 140-day delay in agreeing to defend its insured constitutes a breach of the duty to defend.  As a consequence, the court ruled that the insurer had waived its right to control the defense, though it did not lose the right to contest the reasonableness and necessity of the attorney’s fees subject to reimbursement. Factual and Procedural Background Plaintiffs Barry and Rebecca Schneider (the “Schneiders”) filed a lawsuit against David Yowell and David Yowell Construction, LLC (collectively “Yowell”) asserting claims for breach of contract, fraud, and violation of the Texas Deceptive Trade

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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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