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.
(c) 2025 Barry Zalma & ClaimSchool, Inc.
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Willful and Malicious Injury by the Debtor to Another Entity is Nondischargeable
Intentional Conduct Causing Injury not Dischargeable in Bankruptcy
Post 5202
See the full video at and at and at https://zalma.com/blog plus more than 5200 posts.
In In re Niko T. Irizarry, Mark Riley v. Niko T. Irizarry, No. 2:24-bk-01261-FMD, Adv. No. 2:24-ap-00035-FMD, United States Bankruptcy Court, M.D. Florida, Fort Myers Division (September 30, 2025) established that fraudulent conduct is not dischargeable in Bankruptcy.
Background and Allegations:
Plaintiff Mark Riley filed a lawsuit against Defendant Niko Irizarry in federal district court, alleging claims for civil conspiracy under 42 U.S.C. § 1983, malicious prosecution, violation of his Fourteenth Amendment rights, common law false imprisonment or arrest, and intentional infliction of emotional distress. Riley’s claims are based on allegations with...
Claim Insurer Defrauded Insured Needs Evidentiary Allegations
Post 5201
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It Doesn’t Pay to Accuse an Insurer of Fraud Without Evidence
In Yarisleidy Suarez Rodriguez v. Safeco Insurance Company Of America, Civil Action No. 3:25-CV-00154-GNS, United States District Court, W.D. Kentucky, Louisville Division (September 30, 2025) an insured accused her insurer for fraud in not honoring underinsured motorist coverage.
Case Background:
Plaintiff Yarisleidy Suarez Rodriguez (the Insured) filed a claim for underinsured motorist (UIM) benefits with Defendant Safeco Insurance Company of Illinois, which was denied. Rodriguez alleged that her policy included UIM coverage, which Safeco fraudulently removed without her knowledge.
Legal ...
Claim Insurer Defrauded Insured Needs Evidentiary Allegations
Post 5201
Read the full article at https://www.linkedin.com/pulse/coverage-uim-purchased-barry-zalma-esq-cfe-hekvc, see the full video at and at and at https://zalma.com/blog plus more than 5200 posts.
It Doesn’t Pay to Accuse an Insurer of Fraud Without Evidence
In Yarisleidy Suarez Rodriguez v. Safeco Insurance Company Of America, Civil Action No. 3:25-CV-00154-GNS, United States District Court, W.D. Kentucky, Louisville Division (September 30, 2025) an insured accused her insurer for fraud in not honoring underinsured motorist coverage.
Case Background:
Plaintiff Yarisleidy Suarez Rodriguez (the Insured) filed a claim for underinsured motorist (UIM) benefits with Defendant Safeco Insurance Company of Illinois, which was denied. Rodriguez alleged that her policy included UIM coverage, which Safeco fraudulently removed without her knowledge.
Legal ...
How a Need for Profit Led Health Care Providers to Crime
Post 5185
Posted on September 8, 2025 by Barry Zalma
See the full video at https://lnkd.in/gePN7rjm and at https://lnkd.in/gzPwr-9q
This is a Fictionalized True Crime Story of Insurance Fraud from an Expert who explains why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers.
The Dishonest Chiropractor/Physician
How a Need for Profit Led Health Care Providers to Crime
See the full video at and at
This is a Fictionalized True Crime Story of Insurance Fraud from an Expert who explains why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is designed to help to Understand How Insurance Fraud in America is Costing Everyone who Buys Insurance Thousands of Dollars Every year and Why Insurance Fraud is Safer and More Profitable for the Perpetrators than any Other Crime.
How Elderly Doctors Fund their ...
How a Need for Profit Led Health Care Providers to Crime
Post 5185
Posted on September 8, 2025 by Barry Zalma
See the full video at https://lnkd.in/gePN7rjm and at https://lnkd.in/gzPwr-9q
This is a Fictionalized True Crime Story of Insurance Fraud from an Expert who explains why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers.
The Dishonest Chiropractor/Physician
How a Need for Profit Led Health Care Providers to Crime
See the full video at and at
This is a Fictionalized True Crime Story of Insurance Fraud from an Expert who explains why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is designed to help to Understand How Insurance Fraud in America is Costing Everyone who Buys Insurance Thousands of Dollars Every year and Why Insurance Fraud is Safer and More Profitable for the Perpetrators than any Other Crime.
How Elderly Doctors Fund their ...
Barry Zalma: Insurance Claims Expert Witness
Posted on September 3, 2025 by Barry Zalma
The Need for a Claims Handling Expert to Defend or Prove a Tort of Bad Faith Suit
© 2025 Barry Zalma, Esq., CFE
When I finished my three year enlistment in the US Army as a Special Agent of US Army Intelligence in 1967, I sought employment where I could use the investigative skills I learned in the Army. After some searching I was hired as a claims trainee by the Fireman’s Fund American Insurance Company. For five years, while attending law school at night while working full time as an insurance adjuster I became familiar with every aspect of the commercial insurance industry.
On January 2, 1972 I was admitted to the California Bar. I practiced law, specializing in insurance claims, insurance coverage and defense of claims against people insured and defense of insurance companies sued for breach of contract and breach of the implied covenant of good faith and fair dealing. After 45 years as an active lawyer, I asked that my license to practice law be declared inactive ...
