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Posts published in “Insurance Law”

Calif. Supreme Court Holds Atty Fees to be Included in Determining Constitutional Limits of Punitive Damages Awards

The Supreme Court of California recently held that, in determining whether punitive damages awards are within constitutional limits, attorney’s fees may be included in the calculation of the ratio of punitive to compensatory damages, regardless of whether the fees are awarded by the trier of fact as part of its verdict or are determined by the trial court after the verdict has been rendered. A copy of the opinion in Nickerson v. Stonebridge Life Insurance Company is available at:  Link to Opinion. The plaintiff suffered a broken leg and was taken to a veterans hospital.  He experienced several complications from his…

7th Cir. Holds Servicer/Mortgagee Does Not Owe Fiduciary Duty to Borrower as to Hazard Insurance Proceeds

The U.S. Court of Appeals for the Seventh Circuit recently affirmed a district court’s judgment that a lender did not owe the borrower a fiduciary duty to use the payout from a homeowners’ insurance policy to pay down the loan instead of repair the house, but reversed the dismissal of the borrower’s breach of contract claim. A copy of the opinion is available at:  Link to Opinion. The borrower purchased his home in 2005 with a $100,500 mortgage loan. The home was seriously damaged by a fire five years later. The borrower filed an insurance claim, and the insurer paid…

California Court Reverses Judgment on Hazard Insurance Loss Appraisal Award

The Court of Appeal of the State of California, First District, recently reversed a judgment confirming an appraisal award in an action for damages to an apartment building arising from a fire, as the appraisal panel incorrectly assigned a loss value to all items submitted to it for consideration by the insured, regardless of whether the item was damaged or ever existed. A copy of the opinion is available at: Link to Opinion. The insured filed a hazard insurance claim for an apartment building as a result of a fire.  The insurer investigated the claim and issued initial payment of…

Federal Banking Regulators Issue Joint Final Flood Insurance Rule

Five of the federal banking regulatory agencies (FDIC, FRB, OCC, FCA, and NCUA) recently issued a joint final flood insurance rule, which among other things: Requires escrowing of flood insurance payments for non-exempt loans secured by residential improved real estate or mobile homes that are made, increased, extended or renewed on or after Jan. 1, 2016; Requires that borrowers be given the option to escrow flood insurance premiums and fees, as to residential loans extant as of Jan. 1, 2016; Clarifies that regulated lending institutions and servicers acting on their behalf are allowed to charge for lender-placed flood insurance; and States…

Florida Supreme Court Rules State-Sponsored Property Insurer Immune from Bad Faith Claims

The Supreme Court of Florida recently held that first-party insurer bad faith is not a ‘willful tort,’ and that, as a government entity that enjoys broad statutory immunity from suit, Citizens Property Insurance Corporation (“Citizens”) is consequentially immune from statutory first-party bad faith causes of action. In sum, the Supreme Court determined that the Florida Legislature, when it created Citizens as a property ‘insurer of last resort,’ did not expressly waive Citizens’ statutory immunity from first-party lawsuits arising under Fla. Stat. § 624.155(1), more commonly known as statutory bad faith actions.  Florida does not and has never recognized a common…