Insured May Intervene to Assert Bad Faith Claim Not Assigned
Post 5203
See the full video at https://rumble.com/v7013x8-insured-cant-assign-bad-faith-claim.html and at https://youtu.be/e8OApzn6YZs, and at https://zalma.com/blog plus more than 5200 posts.
Judge Requires Conflict Between Different District Courts in Louisiana Requires Conflict to be Resolved on Appeal
In Allstate Construction, Inc. v. Ohio Security Insurance Company, Civil Action No. 23-01295-BAJ-SDJ, United States District Court, M.D. Louisiana (September 30, 2025) Vina Cleaners, the insured, assigned its claim against Ohio Security to Allstate Construction but did not assign its rights to sue for the tort of bad faith so it intervened in Allstate Construction’s suit.
Background and Procedural History:
In an insurance dispute following damage caused by Hurricane Ida to Vina Cleaners’ property. Vina Cleaners was insured under a commercial policy with the Defendant, Ohio Security Insurance Company. Vina Cleaners assigned its rights under the policy to Allstate Construction, which then filed suit against the Defendant for breach of contract and bad faith.
Legal Issues:
The main legal issue revolves around whether Vina Cleaners can assert bad faith claims under Louisiana Revised Statutes §§ 22:1892 and 22:1973 after assigning its rights to Allstate Construction. The court was required to decide if the assignment of rights included the right to pursue bad faith penalties, which are considered “extracontractual”. The USDC noted that there is a conflict between different district courts in Louisiana regarding the interpretation of these statutes.
ANALYSIS
The Court dismissed Allstate Construction’s bad faith claims against the insurer. The Court reasoned that Allstate Construction’s bad faith claims were “extracontractual” and the assignment of rights between Vina Cleaners and Allstate Construction did not expressly include an assignment of claims under Louisiana Revised Statutes §§ 22:1892 or 22:1973.
Vina Cleaners, as an Intervenor, seeks to assert the same bad faith claims against the insurer. The court noted that in Creamer Brothers Inc. v. Gen. Cas. Co. of Wisconsin, No. CV 22-6110, 2024 WL 4518347 (W.D. La. Sept. 12, 2024), the U.S. District Court for the Western District of Louisiana held that an assignor that assigned its rights under an insurance policy did not assign its bad faith claims because the assignment was not sufficiently express. Thus, the Western District held that the assignor retained its rights to bring bad faith claims against the insurer.
Vina Cleaners asked the Court to follow the Western District’s decision in Creamer Brothers and reject an interpretation that would allow insurers to evade accountability for bad faith conduct solely because the insured exercised its right to assign policy benefits.
There is a conflict between the Louisiana federal district courts’ interpretation of Louisiana law on this issue. Second, this is an important issue for both parties. If the Court grants Defendant’s Motion, the result is that no party holds the right to assert bad faith claims against Defendant. If the Court denies Defendant’s Motion, Defendant faces steep penalties under Louisiana’s bad faith statutes when it is unclear whether that result is legally sound. Since the issue involving Allstate Construction and the same counsel is presently on appeal, the USDC decided to not decide and denied Defendant’s Motion to Dismiss Vina Cleaners’ Complaint of Intervention without prejudice hoping that the appellate court resolves the dispute between District Courts and the Motion can be renewed depending on how the appellate court rules.
ZALMA OPINION
The tort of bad faith is extracontractual and, therefore, cannot be assigned as an insured can assign any rights it has against an insurer under the contract. Allstate Construction tried to get tort damages from the court based on its assignment from Vina Cleaners, and lost. Vina then moved to intervene in the suit to get the tort damages allowed by Louisiana statutes even though it had given away its contract rights to Allstate Construction. The court, faced with different interpretations and a pending appeal, the court punted and by ruling “without prejudice” let the parties litigate but kept the motion to intervene subject to dismissal after the appellate court rules.
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Refusal to Provide Workers’ Compensation is Expensive
Post 5240
Read the full article at https://lnkd.in/guC9dnqA, see the video at https://lnkd.in/gVxz-qmk and at https://lnkd.in/gUTAnCZw, and at https://zalma.com/blog plus more than 5200 posts.
In Illinois Department of Insurance, Insurance Compliance Department v.USA Water And Fire Restoration, Inc., And Nicholas Pacella, Individually And As Officer, Nos. 23WC021808, 18INC00228, No. 25IWCC0467, the Illinois Department of Insurance (Petitioner) initiated an investigation after the Injured Workers’ Benefit Fund (IWBF) was added to a pending workers’ compensation claim. The claim alleged a work-related injury during employment with the Respondents who failed to maintain workers’ compensation Insurance.
Company Overview:
USA Water & Fire Restoration, Inc. was incorporated on January 17, 2014, and dissolved on June 14, 2019, for failure to file annual reports and pay franchise taxes. It then operated under assumed names including USA Board Up & Glass Co. and USA Plumbing and Sewer. The business ...
Arsonist Incompetently Moves Pro Se to Avoid Prison
Post 5239
Read the full article at https://lnkd.in/gRX8TfKn, see the video at https://lnkd.in/gY3Jvnqp and at https://lnkd.in/gRCaaf-3, and at https://zalma.com/blog plus more than 5200 posts.
In Christopher A. Barosh v. Morris Houser, et al., Civ. No. 22-0769, United States District Court, E.D. Pennsylvania (November 25, 2025) a convicted arsonist and insurance fraudster moved the USDC acting in Pro se filed Objections to Magistrate Judge Reid’s Recommendation that the US District Judge dismiss his § 2254 Petition to avoid jail.
BACKGROUND
In October 2005, Barosh set fire to his girlfriend’s Philadelphia home — some 25 hours before the cancellation of the property’s insurance policy. Several witnesses saw Barosh leaving the property shortly before the fire erupted. After the fire, Barosh made “two separate admissions of guilt.”
He attempted to pay an acquaintance to provide him with an alibi for the time of the arson. The eyewitnesses, brother, and ...
Conditional Release Allows Supplemental Claims
Post 5238
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A Release Should Totally Resolve Dispute
In Harvey et al. v. Hall, No. A25A1774, Court of Appeals of Georgia, Fourth Division (December 3, 2025) Paul Harvey, an employee of Arthur J. Dovers (d/b/a 3D Mobile Home Services), drove a truck towing a trailer loaded with machinery and equipment. Harvey fell asleep, veered off the road, and crashed into a culvert, causing Lamar Hall serious injuries.
FACTS OF SETTLEMENT
On August 18, 2020, Hall signed a limited liability release under OCGA § 33-24-41.1, releasing Harvey, Dovers, and their insurer (Georgia Farm Bureau Insurance Company) from liability for the accident in exchange for $50,000, “except to the extent other insurance coverage is available which covers the claim.”
Dovers’s general liability insurer (Republic-Vanguard ...
The Professional Claims Handler
Post 5219
Posted on October 31, 2025 by Barry Zalma
An Insurance claims professionals should be a person who:
Can read and understand the insurance policies issued by the insurer.
Understands the promises made by the policy.
Understand their obligation, as an insurer’s claims staff, to fulfill the promises made.
Are competent investigators.
Have empathy and recognize the difference between empathy and sympathy.
Understand medicine relating to traumatic injuries and are sufficiently versed in tort law to deal with lawyers as equals.
Understand how to repair damage to real and personal property and the value of the repairs or the property.
Understand how to negotiate a fair and reasonable settlement with the insured that is fair and reasonable to both the insured and the insurer.
How to Create Claims Professionals
To avoid fraudulent claims, claims of breach of contract, bad faith, punitive damages, unresolved losses, and to make a profit, insurers ...
The History Behind the Creation of a Claims Handling Expert
The Insurance Industry Needs to Implement Excellence in Claims Handling or Fail
Post 5210
This is a change from my normal blog postings. It is my attempt. in more than one post, to explain the need for professional claims representatives who comply with the basic custom and practice of the insurance industry. This statement of my philosophy on claims handling starts with my history as a claims adjuster, insurance defense and coverage lawyer and insurance claims handling expert.
My Training to be an Insurance Claims Adjuster
When I was discharged from the US Army in 1967 I was hired as an insurance adjuster trainee by a professional and well respected insurance company. The insurer took a chance on me because I had been an Army Intelligence Investigator for my three years in the military and could use that training and experience to be a basis to become a professional insurance adjuster.
I was initially sat at a desk reading a text-book on insurance ...
The History Behind the Creation of a Claims Handling Expert
The Insurance Industry Needs to Implement Excellence in Claims Handling or Fail
Post 5210
This is a change from my normal blog postings. It is my attempt. in more than one post, to explain the need for professional claims representatives who comply with the basic custom and practice of the insurance industry. This statement of my philosophy on claims handling starts with my history as a claims adjuster, insurance defense and coverage lawyer and insurance claims handling expert.
My Training to be an Insurance Claims Adjuster
When I was discharged from the US Army in 1967 I was hired as an insurance adjuster trainee by a professional and well respected insurance company. The insurer took a chance on me because I had been an Army Intelligence Investigator for my three years in the military and could use that training and experience to be a basis to become a professional insurance adjuster.
I was initially sat at a desk reading a text-book on insurance ...
