Arson and Misrepresentation Sufficient Ground to Deny Claim
Post number 5377
Bad Faith Requires A Showing Of More Than Bad Judgment Or Negligence
Read the full article at https://www.linkedin.com/pulse/bad-faith-requires-conscious-doing-wrong-because-zalma-esq-cfe-xxkdc and at https://zalma.com/blog.
Posted on June 22, 2026 by Barry Zalma
Bad Faith Requires the Conscious Doing of a Wrong Because of Dishonest Purpose or Moral Obliquity
Posted on June 22, 2026 by Barry Zalma
Arson and Misrepresentation Sufficient Ground to Deny Claim
Post number 5377
Bad Faith Requires A Showing Of More Than Bad Judgment Or Negligence
In Jonika K. Nelson v. Allstate Vehicle & Property Insurance Co., et al, No. 4:26-CV-17-RPC-DAS, United States District Court, N.D. Mississippi, Greenville Division (June 15, 2026) under Mississippi law, bad faith requires facts showing that the insurer lacked an arguable or legitimate basis for denying the claim or acted willfully, maliciously, or with gross and reckless disregard for the insured’s rights.
FACTS:
A fire destroyed Jonika K. Nelson’s Greenville, Mississippi home and its contents on November 17, 2024. Nelson had a homeowner’s policy with Allstate and submitted a claim, which Allstate denied based on alleged arson, intentional destruction, and/or misrepresentations.
Nelson contended that she fully cooperated with Allstate’s subsequent investigation and provided all requested information and documentation. Nevertheless, Allstate denied the claim, based on allegations of arson and/or intentional destruction of the property, as well as alleged misrepresentations. After coverage was denied, Trustmark Bank (“Trustmark”), which holds a valid lien on the property as the mortgagee, filed suit in the Circuit Court of Washington County against Nelson to quiet title and to judicially foreclose on the property.
Allstate filed a Motion to Dismiss Certain Counts in Nelson’s Amended Complaint, seeking dismissal of all of Nelson’s extracontractual claims. Specifically, Allstate seeks dismissal of Nelson’s claims for bad faith, negligence, and gross negligence as well as her request for emotional distress and punitive damages. Allstate contends the claims should be dismissed for failure to state a claim pursuant to Rule 12(b)(6).
Nelson sued Allstate, asserting breach of contract, bad faith refusal to pay, negligence, gross negligence, emotional distress damages, and punitive damages. Allstate moved to dismiss all claims except breach of contract.
LAW:
Under Rule 12(b)(6), a complaint must plead enough factual matter to state a plausible claim. Conclusory allegations and legal conclusions are insufficient.
Under Mississippi law, bad faith requires facts showing that the insurer lacked an arguable or legitimate basis for denying the claim or acted willfully, maliciously, or with gross and reckless disregard for the insured’s rights. Negligence requires a duty independent of the contract, while gross negligence requires facts showing reckless indifference or willful, wanton conduct. Emotional distress damages may be available in a breach of contract action if mental anguish was foreseeable and actually suffered. Punitive damages require a viable bad faith showing.
Bad faith requires a showing of more than bad judgment or negligence; indeed, bad faith implies the conscious doing of a wrong because of dishonest purpose or moral obliquity.
DISCUSSION AND ANALYSIS:
The Court found Nelson’s bad faith allegations too conclusory because she did not plead facts explaining why Allstate’s arson, intentional-destruction, or misrepresentation grounds were incorrect or why Allstate’s investigation was unreasonable.
The negligence claim failed because the alleged duty to investigate and evaluate the claim arose from the insurance contract and was not independent of it. The gross negligence claim also failed because Nelson did not plead facts showing willful, wanton, or reckless conduct. The Court allowed the emotional distress damages request to proceed because the breach of contract claim remained unresolved, making dismissal premature.
Because the bad faith claim was inadequately pleaded, the punitive damages request also failed.
CONCLUSION:
Allstate’s motion to dismiss was granted in part and denied in part. The bad faith, gross negligence, and punitive damages claims were dismissed without prejudice; the negligence claim was dismissed with prejudice; and the emotional distress damages request survived. Because Allstate did not challenge the breach of contract claim at this stage and because Nelson has failed to plead sufficient facts, Nelson’s bad faith claim is dismissed without prejudice. Nelson’s breach of contract claim remains pending because Allstate did not seek dismissal of it.
ZALMA OPINION
It doesn’t take a genius lawyer to plead sufficient facts to allege bad faith if there are any facts to support the claim. Ms. Nelson apparently hired an honest and honorable lawyer who alleged the facts he thought he could prove but did not allege facts he or she couldn’t prove. Allstate recognized the facts, moved to dismiss, and left Ms. Nelson with a breach of contract claim she would have a difficult time proving the breach since Allstate probably had evidence sufficient to prove the arson and/or the misrepresentations.
(c) 2026 Barry Zalma & ClaimSchool, Inc.
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The negligence claim failed because the alleged duty to investigate and evaluate the claim arose from the insurance contract and was not independent of it.
Arsonist Tried To Represent Himself, Failed, and Sought Habeas Relief
Post number 5357
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Karacson’s Arson for Profit Attempt Required Skill & Experience to Succeed
In Steve Ellis Karacson v. David Shaver, Warden, No. 25-1089, United States Court of Appeals, Sixth Circuit (May 20, 2026) Steve Karacson was convicted in Michigan state court of arson and insurance fraud after evidence showed he burned his own insured home. Investigators found multiple points of origin, gasoline odor, and evidence tying him to the scene, including cell-phone location data and a receipt showing he had purchased a gas can and gloves shortly before the fire.
FACTS
Karacson initially had appointed counsel, but his relationships with both appointed attorneys ...
Foolish to Repeatedly Disobey Court Orders
All That Remains For Trial Is Plaintiff’s Damages On Each Of These Claims And Establishing Proximate Causation Of Those Damages.
Post number 5348
See the full video at and at and at https://zalma.com/blog plus 5300 posts.
In Linh Wang v. Esurance Insurance Company, No. C24-0447-JCC, United States District Court, W.D. Washington, Seattle (May 1, 2026) John C. Coughenour, United States District Judge, found that throughout this case, culminating with its briefing on Plaintiff’s renewed motion and that Defendant has subjected Plaintiff to unnecessary motion practice for clearly discoverable information and made dubious representations (including to the Court).
FACTUAL BACKGROUND
This case involves an underinsured/uninsured motorist insurance bad faith claim arising from a 2017 motor vehicle collision. The plaintiff, Linh Wang, alleges that Esurance Insurance ...
The Right to Negotiate with Insurer is Not an Assignment of Claims
Post number 5347
Read the full article at https://www.linkedin.com/pulse/ambiguous-contract-repair-assignment-barry-zalma-esq-cfe-2xppc, see the full video at https://rumble.com/v79is1s-ambiguous-contract-to-repair-not-an-assignment.html and at and at https://zalma.com/blog plus more than 5300 posts.
Nebraska Requires an Actual Assignment to Allow Contractor to Sue Insurer
In Millard Gutter Company, a corporation doing business as Millard Roofing and Gutter v. Farmers Mutual Insurance Company of Nebraska, also known as Farmers Mutual Insurance, also known as Farmers Mutual, No. A-24-818, Court of Appeals of Nebraska (May 5, 2026) Millard sued Farmers as an assignee of Jane Anzalone who had hired Millard Gutter to repair the roof of her home and agreed to allow Millard Gutter to coordinate with her insurer, Farmers Mutual, concerning reimbursement for repairs authorized under her insurance policy.
FACTUAL BACKGROUND
In ...
Flood Policy Limitation of Action Provision Destroys Bad Faith Suit
Post number 5376
Flood Policy Limitation of Action Provision Followed Strictly
Posted on June 19, 2026 by Barry Zalma
In Wayne Gularte, et al. v. Wright National Flood Insurance Company, No. 5:26-cv-01426-PCP, United States District Court, N.D. California (June 15, 2026) Wayne and Doris Gularte alleged that their property sustained flood damage between January 17 and March 23, 2023. They submitted claims to Wright National Flood Insurance Company, which paid part of the claim but denied additional claimed structural losses by email on June 18, 2023.
The Gularte plaintiffs filed suit in state court on December 30, 2025, seeking $12,500 for unpaid structural losses. Wright removed the action to federal court and moved to dismiss.
LAW:
A complaint in Federal Court must plead enough facts to state a plausible claim for relief under Federal Rule of Civil Procedure 8(a)(2), and dismissal under Rule 12(b)(6) is appropriate when the complaint lacks a ...
Bad Faith With No Breach of Contract
Post number 5375
Essential Condition of a Tort of Bad Faith Ignored in California
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In Jennifer Bornoff v. State Farm General Insurance Company, B339796, California Court of Appeals, Second District, First Division (May 1, 2026) Bornoff’s business suffered two burglaries in March 2022. She submitted claims promptly, and State Farm never disputed coverage, only valuation.
After months of delay and poor communication, State Farm paid the property-loss benefits about four months later, shortly after Bornoff sued.
ISSUE:
Whether State Farm was entitled to summary adjudication of Bornoff’s bad-faith claim when it had paid all policy benefits but allegedly caused extracontractual economic loss through unreasonable delay.
RULE:
In California, an insurer may be liable for bad faith if it unreasonably delays payment of...
Post number 5374
The Government Must Remove a Noncitizen Within 90 Days of Detention
In Jean Marcel Perez Garcia v. Warden, Florida Side South Detention Facility, et al., No. 2:26-cv-788-JES-DNF John E. Steele United States District Judge United States District Court, M.D. Florida, Fort Myers Division (June 10, 2026) Jean Marcel Perez Garcia, a Cuban citizen, entered the United States in 2003. After convictions for a drug offense and felony insurance fraud, he was ordered removed in 2018 but was later released under supervision.
ICE revoked that supervision in December 2025 and detained him again to execute the removal order. In February 2026, ICE transported him to the U.S.–Mexico border and sought to have him depart to Mexico, but he refused. ICE then continued to detain him for more than six months without showing that any country had agreed to accept him or that travel documents had been secured.
LAW
Under 8 U.S.C. § 1231(a)(1)(A), the government must remove a noncitizen within 90 days after the ...
