Insurance Carrier gets Popped in Bad Faith Action – Recent Insurance Coverage Corner Blog post by Laura Paton.
Recent Insurance Coverage Corner Blog post by Laura Paton.
In case you missed it, Judge Roger Young just found in favor of the plaintiffs to the tune of $21,746,022.87 – and that does NOT include punitive damages. The plaintiffs include the developers of a condominium as well as the individual condo owners and the homeowners association. They filed a declaratory judgment, breach of contract and bad faith action against an insurance carrier, after the carrier denied defenses in underlying water intrusion and construction defects complaints filed by the homeowners association and individual unit owners. Judge Young found that the four requirements of the insurance agreement for each of the policy years had been met and that the exclusions cited were ambiguous and, therefore, must be construed in favor of the insured. Thus, the insurance carrier owed a duty to defend and indemnify its insured. Interestingly, the court took issue with the content of the denial letter in much the same way as we recently saw in the Heritage v. Harleysville case. The punitive damages hearing is set to occur at a later date and it remains to be seen if this decision will be appealed.
Stay tuned for an update, after the upcoming punitive damages hearing.
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