OCTOBER 2013 BAD FAITH CASES: BAD FAITH CLAIMS ALLEGING DELAY IN INVESTIGATION, UNREASONABLE INTERPRETATION OF POLICY, AND LACK OF ALE PAYMENT CAN ADVANCE TO TRIAL, THOUGH SUMMARY JUDGMENT GRANTED ON CLAIM RELATING OT AGGREGATION AND DEPRECIATION ON PERSONAL PROPERTY (Philadelphia Federal)

Plaintiff’s home was destroyed in a fire. An investigation of the cause of the fire took place, and plaintiff’s son was arrested and charged with…

OCTOBER 2013 BAD FAITH CASES: COVERAGE FOR QUI TAM ACTION DENIED UNDER “PRIOR OR PENDING LITIGATION” EXCLUSION; INSURED NEED NOT BE SERVED WITH COMPLAINT FOR EXCLUSION TO APPLY (Philadelphia Commerce Court)

Plaintiff brought suit against the insurer alleging the insurer denied plaintiff’s professional liability claim in bad faith. Plaintiff provides pharmaceutical manufacturers with drug distribution services,…

OCTOBER 2013 BAD FAITH CASES: COURT QUASHED SUBPOENA DIRECTED TO ATTORNEY OF THIRD PARTY AS IT SOUGHT INFORMATION IRRELEVANT TO THE CARRIER’S CLAIMS HANDLING ON AN IRRELEVANT CONTRACT, AND WOULD VIOLATE THE ATTORNEY CLIENT PRIVILEGE AND WORK PRODUCT DOCTRINE (New Jersey Federal)

In Kull v. Arrowood Indemnity Company, the court addressed a motion to quash a subpoena issued in connection with an underlying case in federal district…

OCTOBER 2013 BAD FAITH CASES: COURT REJECTS CARRIER’S MOTION FOR JUDICIAL NOTICE OF POINTS CONSTITUTING “LEGISLATIVE FACTS” RATHER THAN “ADJUDICATIVE FACTS” AS BASIS TO CREATE PREDICATE FOR DEFENSE JUDGMENT ON BAD FAITH; AMBIGUITY IN LAW REGARDING COVERAGE ISSUE IS NOT A DEFENSE TO BAD FAITH UNLESS INSURER ACTUALLY INCLUDED CONSIDERATION OF THAT AMBIGUITY IN ITS DECISION MAKING (Middle District)

In Bodnar v. Nationwide Mutual Insurance Company, the carrier used a somewhat innovative to establish a predicate for a later finding that it did not…