HH Obtains Dismissal of Bad Faith Claim in the Western District

Christmas came early today for the insurance coverage and bad faith team at Houston Harbaugh. They obtained a Rule 12 dismissal of a Complaint, with prejudice, in a matter where the policyholder settled a claim without the insurer’s knowledge or consent. Judge Horan of the Western District of Pennsylvania ruled that: (a) the policyholder violated the policy’s “consent to settle” provision; (b) the lawsuit was barred by the policy’s “no action” clause; and (c) the insurer was prejudiced “as a matter of law” as result of the insured’s failure to notify of the settlement. Additionally, Judge Horan dismissed the statutory bad faith claim, finding that the insurer had a reasonable basis to deny the claim. The Court found that amendment of the Complaint would be futile & dismissed the lawsuit with prejudice.

To read the opinion, click RealogicHR, LLC v. Continental Cas. Co., 2:22-cv-01573 (WDPA 12/23/22).