Tred Eyerly | Insurance Law Hawaii | May 18, 2015
The insured’s claim for bad faith investigation regarding their hail damage claim did not survive the insurer’s motion for summary judgment. Amarillo Hospitality Tenant, LLC v. Mass. Bay Ins. Co., 2015 U.S. Dist. LEXIS 56228 (N. D. Tex. April 29, 2015).
A hailstorm caused damage to the Courtyard Marriot. The day after the storm, the insured inspected the roof of the hotel and observed damage to a sign and some aluminum vent tubes. No damage to the roof itself was observed. Subsequently, leaks were found on the tenth floor of the hotel. A public adjuster concluded that the roof had sustained damage during the hailstorm.
The insured filed a claim with Massachusetts Bay Insurance Company. The insurer paid for the cost of repairing the damaged sign. To determine whether the damage to the roof was caused by the hailstorm, the insurer hired Donna Engineering, who conducted two inspections of the roof. Both inspections concluded that the hailstorm did not cause damage to the roof. Consequently, the claim was denied.
The insured then hired Shield Engineering to perform another inspection. Shield Engineering issued a report that disputed the conclusions reached by Donan Engineering. The report was mailed to the insurer.
The insured then filed suit alleging breach of contract, bad faith, and other claims.The insurer moved for summary judgment on all claims except breach of contract. The court determined that the insured failed to establish there was a genuine dispute of material fact as to whether the insurer knew or should have known that its liability under the policy had become reasonably clear at the time the claim was denied. A simple disagreement among experts about whether the cause of the loss was covered by the policy would not support a judgment for bad faith. Nor was there evidence that the insurer ignored information provided by the insured or its employees.
The insured also argued the insurer failed to consider that many nearby properties sustained hail damage. But there was no evidence in the record to create a fact issue on whether it was reasonably clear that the insured’s roof sustained hail damage from the storm.
Finally, the insured’s argument that the insurer’s expert was biased was not supported by the record. Evidence that an expert worked primarily for insurance companies and an insurer’s awareness of an adjuster’s particular view did not amount to bad faith.
Summary judgment was not granted to the insurer on the issue of whether prompt payment had been made pursuant to a Texas statute. This was a statutory claim, and not a claim based on common law bad faith. The possibility of liability under the statute arose only if the insured was covered by the policy. Liability under the statute depended on the outcome of the remaining breach of contract claim, which was not addressed by the insurer’s motion.
via Insurance Law Hawaii: Bad Faith Claim for Inadequate Investigation Does Not Survive Summary Judgment.