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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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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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