Bad Faith

Featured Publication:

Washington Supreme Court Holds Claims Adjusters Cannot Be Personally Liable for Bad Faith [Alert]

Terri Sutton and Jordan Hess discuss the state Supreme Court decision in Keodalah v. Allstate Insurance Company, et al.

More

Extracontractual claims pose a unique set of risks to insurers, implicating their business operations and opening potentially vast exposures. Today, it is not enough to have good coverage counsel. Insurers need counsel with deep and specific bad faith and extracontractual experience. Cozen O’Connor’s team of dedicated extracontractual/bad faith attorneys have been practicing in this field for decades.

Our bad faith attorneys defend insurance clients in litigation alleging first- or third-party extracontractual claims related to all lines of business, including property, general liability, professional liability and D&O, life/health/disability and automobile policies. We handle litigation arising from claims handling, underwriting, excess verdicts, uninsured or under-insured motorist coverage, consent judgments, default judgments and garnishment actions. Our attorneys have successfully defeated individual and class claims seeking actual and consequential damages, statutory penalties, punitive damages, attorneys’ fees and policy benefits.

Because Cozen O’Connor is a global leader in the area of insurance coverage and claims litigation, we are often able to defeat breach of contract assertions at the outset, thereby mitigating any extracontractual claims. When appropriate, our attorneys are able to negotiate quick and quiet resolutions to bad faith claims. Because they involve questions of honor, duty and essential fairness, these cases are qualitatively different from other coverage disputes. Our lawyers are able to create practical frameworks for discussion, incentivize reasonable conduct and mutuality, and find solutions that limit insurer exposure.  

When bad faith and extracontractual disputes must be tried, our attorneys have the proven ability to go to court—and win. We regularly and successfully defend major insurers in multi-million dollar bad faith matters in state, federal and appellate courts throughout the United States. Success is not defined simply by getting a defense verdict, but by winning in way that protects clients’ bottom lines and brands.

 

SERVICE AREAS

  • Successfully defend bad faith litigation from inception through trial
  • Design strategies to defeat institutional bad faith cases
  • Respond to policy limit and time limit demands and analyze potential exposures
  • Assist in the withdrawal of a defense while avoiding bad faith, waiver and estoppel claims
  • Respond to unreasonable discovery requests and consent judgments
  • Bifurcate bad faith claims for discovery and trial, when necessary
  • Avoid or limit impact of policyholder’s assignment of rights
  • Negotiate settlements in bad faith cases with multiple insureds/claimants, multiple insurers, limited insurance; avoid or defend against collusive settlements
  • Monitor underlying litigation and assess impact on coverage issues and potential exposure

Experience

Publications

Eleventh Circuit: Jury Instruction About Notice to Insured of Settlement Demand Was Required (Florida) [Avoiding Insurance Bad Faith Blog]

July 20, 2022

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...

Top Bad Faith Cases of 2021

July 12, 2022

Michael W. Melendez and Chad A. Pasternack wrote the article “Top Bad Faith Cases of 2021” for Westlaw Today.

Under Texas Law, No Tender Means No Obligation To Defend [Avoiding Insurance Bad Faith Blog]

June 30, 2022

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...

Texas Supreme Court Axes Policyholder’s Attempt to Expand Insurer Tort Liability [Avoiding Insurance Bad Faith Blog]

June 28, 2022

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...

Intentional Act Without Intent to Harm May Not Be an Occurrence [Alert]

May 27, 2022

A California appellate court recently ruled that an intentional act may not be an "occurrence" even when there is no intent to cause harm.

California Court of Appeal: Insurers Not Liable Under the California Insurance Frauds Prevention Act [Avoiding Insurance Bad Faith Blog]

May 03, 2022

In its recent decision, People ex rel. Ellinger v. Magill, et al., ---Cal.Rptr.3d---, No. E076378, 2022 WL 1077988 (Cal. Ct. App., Mar. 18, 2022), the California Court of Appeal refused to extend liability under California’s Insurance Frauds Prevention Act (IFPA) to an insurer’s claims handling...

Montana: Unambiguous Exclusions Enforced Despite Lack of Table of Contents Required Under Statute [Avoiding Insurance Bad Faith Blog]

April 29, 2022

A recent Supreme Court decision, High Country Paving, Inc. v. United Fire & Cas. Co., 2022 MT 72, ¶ 1, answered in the negative a question certified by a federal district court regarding tensions inherent in Montana’s Property and Casualty Insurance Policy Simplification Act (“PSA”). The...

Colorado: No Bad Faith Claim Against Claims Adjuster [Alert]

March 23, 2022

Teri Mae Rutledge discusses the Colorado Supreme Court's decision in Skillet v. Allstate.

Eleventh Circuit (Florida):  No Bad Faith for Investigating Claim [Avoiding Insurance Bad Faith Blog]

March 01, 2022

On February 15, 2022, the United States Court of Appeal for the Eleventh Circuit upheld the Southern District of Florida’s summary judgment victory for GEICO, finding that no reasonable jury could conclude that GEICO had operated in bad faith with respect to its handling of a wrongful death claim...

New Statute May Spell Trouble for New Jersey Insurers [Avoiding Insurance Bad Faith Blog]

January 26, 2022

On January 19, 2022, New Jersey Governor Phil Murphy signed S.B. 1559, known as the “New Jersey Insurance Fair Conduct Act,” which allows motorists to sue their insurance companies over “unreasonably” late or denied coverage benefits and unfair settlement practices. The bill, passing through both...

Fifth Circuit Weighs in on Aftermath of Texas Supreme Court’s Decisions Affecting Insurers’ Pre-Appraisal Award Payments and Damages under the Texas Prompt Payment of Claims Act [Avoiding Insurance Bad Faith Blog]

August 20, 2021

Just a few short years ago, there was a bright line rule under Texas law concerning appraisal awards. If an insurer timely paid an appraisal award, that payment extinguished all of the insurer’s contractual and extracontractual liability to the insured. See, e.g., Garcia v. State Farm Lloyds, 514...

Fifth Circuit Finds Potential Coverage for Data Breach; Interprets “Publication” Broadly [Avoiding Insurance Bad Faith Blog]

July 23, 2021

Using general contract interpretation principles, the Fifth Circuit reversed summary judgment in favor of an insurer and found a duty to defend Landry’s in a data breach lawsuit. Landry’s Inc. v. The Insurance Company of the State of Pennsylvania, No. 19-20430 (July 21, 2021). Landry’s...

Iowa Supreme Court Rejects Restaurant’s Allegations of Bad Faith and Breach of Contract After Appraisal [Avoiding Insurance Bad Faith Blog]

June 08, 2021

The Iowa Supreme Court recently reversed the appellate court’s denial of an insurer’s motion for a directed verdict, finding that United Fire did not breach the insurance policy and did not commit bad faith during a property appraisal. Luigi’s, Inc. v. United Fire and Cas. Co., No. 19-1669, ---...

Lack of Notice No Excuse for Failure to Settle [Avoiding Insurance Bad Faith Blog]

May 28, 2021

An insurer can no longer claim its lack of notice of a lawsuit against its insured excuses it for failing to settle the suit after the Georgia Supreme Court’s recent decision in GEICO Indemnity Co. v. Whiteside, Case No. S21Q0227 (Ga. April 19, 2021). In Whiteside, the Georgia Supreme Court held...

Avoid Creating Coverage By Estoppel, Waiver & Forfeiture: California [Avoiding Insurance Bad Faith Blog]

May 19, 2021

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...

A Jury Must Find An Insurer Acted Unreasonably In Order To Find Bad Faith Failure to Settle [Avoiding Insurance Bad Faith Blog]

April 27, 2021

On March 8, 2021 the California Court of Appeal, reversing a $10 million verdict against Farmers, found that a jury must specifically find unreasonable acts by an insurer to support a “failure to settle” bad faith finding. Pinto v. Farmers Ins. Exch., No. B295742, __ Cal. App. 5th __, 2021 WL...

Tips for Avoiding First-Party “Bad Faith” in Illinois [Avoiding Insurance Bad Faith Blog]

April 21, 2021

Illinois does not recognize bad faith as an independent tort. In the first-party context, bad faith is a purely statutory construct which hinges upon whether an insurer’s conduct was “vexatious and unreasonable.” Section 155 of the Illinois Insurance Code (215 ILCS 5/155) provides the exclusive...

Recent Bad Faith Cases Regarding Reasonableness of Medical Treatment [Avoiding Insurance Bad Faith Blog]

April 19, 2021

In two recent cases, the courts showed substantial deference to patients’ treating physicians in determining the reasonableness of medical treatment. This deference appears to reflect a reluctance of courts to decide what healthcare is appropriate for a patient. In Peterson v. Western National...

California Supreme Court: Insurer Immunity Under California’s Ratemaking Statutes Is Narrow [Alert]

April 01, 2021

Mark A. Talise discusses the California Supreme Court decision in Villanueva v. Fidelity National Title Company and how it could impact all insurance providers in California.

Can a Settlement Demand Above Policy Limits Fall within Limits? A Calif. Appellate Court Says Yes

March 29, 2021

Michael Melendez and Rebekah Shapiro discuss a recent California Appeals Court decision in Planet Bingo LLC v. Burlington Ins. Co., and what it means for liability insurers.

Texas Supreme Court Follows Through on Barbara Technologies and Ortiz With Three Important New Decisions [Alert]

April 22, 2020

Karl A. Schulz and Stephen P. Pate discuss three recent cases decided by the Texas Suprme Court that revived policyholder suits that were in limbo when Barbara Technologies and Ortiz were decided.

Washington Supreme Court Holds Claims Adjusters Cannot Be Personally Liable for Bad Faith [Alert]

October 08, 2019

Terri Sutton and Jordan Hess discuss the state Supreme Court decision in Keodalah v. Allstate Insurance Company, et al.

Texas Supreme Court Identifies Claims that Survive the Payment of an Insurance Appraisal Award [Alert]

July 17, 2019

Donnie M. Apodaca, II, Stephen Pate, and Alicia G. Curran discuss two recent the Supreme Court of Texas’s decisions and considerations for insurers before they invoke appraisal and pay the appraisal awards.

Montana: Settlement Without Defending Insurer Is Not Presumptively Reasonable [Alert]

May 10, 2019

Peter Berg discusses the decision in Draggin' Y Cattle Co., Inc. v. Junkermier, Clark, Campanella, Stevens, P.C. and how it impacts settlements in Montana.

Montana Holds Insured’s Stipulated Judgment Was Collusive and Unreasonable [Alert]

February 05, 2019

Kristie M. Abel discusses how Abbey/Land demonstrates that an insurer can successfully contest such a judgment, however, the insurer needs to meet a high burden in order to prevail.

New York Bad Faith Update: Appellate Department Rejects Heightened Pleading Standard [Alert]

February 01, 2019

Laura Dowgin discusses the decision in D.K. Prop., Inc. v. Nat'l Union Fire Ins. Co. of Pittsburgh, PA and notes that while it resulted in a favorable outcome for the policyholder there has been no shift in New York bad faith law.

Texas Supreme Court Clarifies Whether Bad Faith Liability May Exist in Absence of a Policy Breach [Global Insurance Alert]

April 20, 2018

Greg Hudson discusses the Texas Supreme Court's decision in Menchaca v. USAA Texas Lloyds Company. The court articulates five rules when extracontractual causes of action are available even when there has been no breach of the insurance policy and clarifies the procedural steps a court should follow in determining which rule applies.

Individual Claim Adjuster Is Subject To Bad Faith and Consumer Protection Lawsuit [Global Insurance Alert]

April 03, 2018

Michael D. Handler and Jordan A. Hess discuss the Washington Court of Appeals reversal of a trial court’s dismissal of the bad faith claim against a claims adjuster, holding that individual insurance adjusters could be liable for violating the CPA if they caused financial injury by engaging in unfair or deceptive acts or practices that impact the public interest.

Events & Seminars

Past Events

Duty to Settle

July 12, 2022 - Webinar

Beyond Bad Faith

May 18, 2022 - Webinar

Bad Faith 2021 Year in Review

April 27, 2022 - Webinar

Eyes Open: Avoiding Bad Faith Traps

March 23, 2022 - Palm Desert, CA

In2Risk 2021

September 24, 2021 - Lake Buena Vista, FL

2021 Claims College

September 08, 2021 - Baltimore, MD

Review of Significant Bad Faith Cases in 2018

February 13, 2019 - WEBINAR

Webinar: Bad Faith on the Acela Corridor

October 24, 2018 - Webinar

15th Annual Course Advanced Insurance Law

June 28, 2018 - San Antonio, TX

In The News

Cozen O'Connor's Alissa Christopher named Volunteer of the Week by the Human Rights Initiative of North Texas

June 14, 2022

Alissa Christopher, Member of the firm's Global Insurance Department, was recognized as the Volunteer of the Week by the Human Rights Initiative (HRI) of North Texas.

Contacts

Michael W. Melendez

Member

mmelendez@cozen.com

(415) 593-9610

Alissa K. Christopher

Member

akchristopher@cozen.com

(214) 462-3036

Samuel R. Stalker

Member

sstalker@cozen.com

(312) 382-3188

People

Related Practice Areas

Related Blogs

Avoiding Insurance Bad Faith

Covering state and federal bad faith decisions and practices impacting insurers.

Cyber Law Monitor

Following current trends in cyber, privacy, and data security law.

Property Insurance Law Observer

Covering first-party decisions and developments.

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