No Summary Judgment for Bad Faith for Lack of Evidence
Post 5437
Posted on August 28, 2026 by Barry Zalma
Genuine Dispute of Material Fact Avoids Summary Judgment
In Riley and Rebecca Ross v. Allstate Vehicle And Property Insurance Company, and Illinois Corporation, No. 2:25-CV-00006-JAG, United States District Court, E.D. Washington (August 18, 2026), Pending before the USDC was Defendant’s Motion for Partial Summary Judgment the plaintiffs brought claims against Allstate arising from its handling of an insurance claim. They alleged Allstate failed to make proper payment, adequately investigate the loss, retain an expert, respond to communications, and properly value damages including alternative living expenses and damage to a hydronic heating system.
Plaintiffs argued Defendant failed “to adopt and implement reasonable standards for the prompt investigation of claims arising under insurance policies.”
ISSUES
Allstate sought dismissal of the plaintiffs’ claims under the Insurance Fair Conduct Act (IFCA), Consumer Protection Act (CPA), insurance bad faith, and negligent claims handling. Allstate also sought to bar recovery of attorney’s fees.
LAW
The USDC applied the summary judgment standard: summary judgment is proper only where there is no genuine dispute of material fact and the movant is entitled to judgment as a matter of law.
For the IFCA claim, Washington law permits suit where an insurer unreasonably denies coverage or payment of benefits. The USDC rejected an expanded “constructive denial” theory.
For the CPA claim, the plaintiffs had to show an unfair or deceptive act, trade or commerce, public interest impact, injury, and causation. Violations of certain insurance regulations can constitute per se unfair or deceptive acts.
For bad faith, plaintiffs had to show unreasonable conduct by the insurer. Summary judgment is improper if material facts remain disputed regarding the reasonableness of the insurer’s actions. Fees are available in coverage disputes, not merely disputes over claim valuation or damages.
DISCUSSION / ANALYSIS
Where the insurer pays or offers to pay a paltry amount that is not in line with the losses claimed, is not based on a reasoned evaluation of the facts (as known or, in some cases, as would have been known had the insurer adequately investigated the claim), and would not compensate the insured for the loss at issue, the benefits promised in the policy are effectively denied.
The court dismissed the IFCA claim because Allstate had not denied coverage or benefits. The court concluded that Washington law does not recognize a constructive denial theory under IFCA where the insurer made substantial payment but disputed the amount owed.
The CPA claim survived in part. The court dismissed CPA theories based on failure to adopt investigation standards, failure to affirm or deny coverage, failure to acknowledge communications, and settlement standards because plaintiffs failed to identify sufficient supporting facts. However, CPA theories based on allegedly unreasonable investigation and alleged underpayment sufficient to compel litigation survived because factual disputes remained.
The bad faith and negligent claims handling claims also survived. Plaintiffs presented enough evidence to create a factual dispute over whether Allstate’s investigation and valuation were reasonable, including the lack of an in-person adjuster inspection and handling of the heating-system damage.
The court rejected fees because the dispute concerned claim valuation and damages, not coverage. Allstate acknowledged coverage. The disagreement was over the extent and value of the loss.
CONCLUSION
Allstate’s motion for partial summary judgment was granted in part and denied in part. The IFCA claim was dismissed with prejudice. CPA claims based on WAC 284-30-330(4) and (7) remained. The plaintiffs’ breach of contract, bad faith, declaratory judgment, and negligent claims handling claims remained pending.
The USDC concluded that as to the IFCA claims, no issue of genuine factual dispute exists, consequently summary judgment is appropriate. Plaintiff also presented a genuine issue of fact regarding the Bad Faith and Negligent Claims Handing claim. Lastly, the USDC found fees do not apply.
ZALMA OPINION
Bad faith is a tort that requires a finding of unreasonable conduct by the insurer. The facts to prove that tort was not proved but the plaintiff presented sufficient evidence to raise a genuine issue of fact regarding the Bad Faith and Negligent Claims Handing claim. Whether they proved the torts at trial will be established by a jury.
(c) 2026 Barry Zalma & ClaimSchool, Inc.
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Policy Limits Demand Accepted Settles Claim
Post 5434
Posted on August 26, 2026 by Barry Zalma
See the full video at https://lnkd.in/g-ZtsSgK and at https://lnkd.in/ghMBdYWR
A Contingent Offer Accepted Ends the Dispute
In Farmers Insurance Exchange, a California Reciprocal Insurance Exchange, The Superior Court For The County Of San Bernardino, Kathleen Ann Wood, E087128, California Court of Appeals, (July 9, 2026) Farmers Insurance Exchange insured Doyle Archer under an automobile policy with bodily injury limits of $15,000 per person and $30,000 per accident.
FACTUAL BACKGROUND
Archer rear-ended Kathleen Ann Wood at a red light, causing Wood to assert a bodily injury claim against him. Wood’s counsel sent Farmers a pre-litigation settlement demand offering to resolve Wood’s claim for the available policy limits, stating that if the $100,000 demand exceeded the policy, the offer was for the policy limits.
Farmers timely responded in writing, agreed to pay Wood the $15,000 per-person policy limit, and provided the requested ...
Policy Limits Demand Accepted Settles Claim
Post 5434
Posted on August 26, 2026 by Barry Zalma
See the full video at https://lnkd.in/g-ZtsSgK and at https://lnkd.in/ghMBdYWR
A Contingent Offer Accepted Ends the Dispute
In Farmers Insurance Exchange, a California Reciprocal Insurance Exchange, The Superior Court For The County Of San Bernardino, Kathleen Ann Wood, E087128, California Court of Appeals, (July 9, 2026) Farmers Insurance Exchange insured Doyle Archer under an automobile policy with bodily injury limits of $15,000 per person and $30,000 per accident.
FACTUAL BACKGROUND
Archer rear-ended Kathleen Ann Wood at a red light, causing Wood to assert a bodily injury claim against him. Wood’s counsel sent Farmers a pre-litigation settlement demand offering to resolve Wood’s claim for the available policy limits, stating that if the $100,000 demand exceeded the policy, the offer was for the policy limits.
Farmers timely responded in writing, agreed to pay Wood the $15,000 per-person policy limit, and provided the requested ...
The Largest Residential Burglary of All Time
Post 5407
Fraud & the Fear of Bad Faith Suits
Posted on July 22, 2026 by Barry Zalma
See the full video at https://lnkd.in/gWQQEySW and at https://lnkd.in/gyhdK6wv
This is a Fictionalized True Crime Story of Insurance Fraud explaining why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is one of a collection 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.
This is a Fictionalized True Crime Story of Insurance Fraud explaining why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is one of a collection 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.
After ...
Crime Requires 121-151 Months of Imprisonment
Post 5486
Posted on September 9, 2026 by Barry Zalma
Mr. Baiyewu Is Liable For The Loss Resulting From Acts Directly Attributable To Him And For The Loss Resulting From The Reasonably Foreseeable Acts Of Others Taken In Furtherance of the Criminal Activity
In United States Of America v. Oluwasegun Baiyewu, CRIMINAL No. 21-395 (RAM), United States District Court, D. Puerto Rico (August 26, 2026) the court dealt with a case after on October 20, 2021, a grand jury in the District of Puerto Rico returned a single-count Indictment charging Mr. Baiyewu with conspiracy to commit money laundering, in violation of 18 U.S.C. § 1956(h). About a year and a half later, on March 31, 2023, a grand jury returned a single-count Superseding Indictment charging Mr. Baiyewu and four co-defendants with conspiracy to commit money laundering, in violation of 18 U.S.C.
CONVICTION
Baiyewu was convicted by a jury of conspiracy to commit money laundering under 18 U.S.C. § 1956(h). The charged conspiracy, ...
Insurance Requires Fortuity to be an Insured Risk
Post 5485
Posted on September 8, 2026 by Barry Zalma
In Industrial Park Center, LLC, doing business as Mainspring Capital Group v. Great Northern Insurance Company, a foreign insurer, No. CV-25-0330-CQ, Supreme Court of Arizona (September 1, 2026).
The United States Court of Appeals for the Ninth Circuit certified the following question to this Court:
"Is damage to property a “fortuitous” loss when, based on the insured’s knowledge at the time the insurance policy issued, it was reasonably foreseeable that such damage was almost certain to occur if certain preventative measures were not taken?"
FACTUAL BACKGROUND
Mainspring owned commercial property leased to Star Fisheries for decades. Star Fisheries’ use of water and salt allegedly caused structural damage over time. In 2010, Mainspring learned of damage and made some repairs but did not implement all recommended preventive measures. In 2021–2022, additional similar structural damage was discovered, and ...
Insurance Requires Fortuity to be an Insured Risk
Post 5485
Posted on September 8, 2026 by Barry Zalma
In Industrial Park Center, LLC, doing business as Mainspring Capital Group v. Great Northern Insurance Company, a foreign insurer, No. CV-25-0330-CQ, Supreme Court of Arizona (September 1, 2026).
The United States Court of Appeals for the Ninth Circuit certified the following question to this Court:
"Is damage to property a “fortuitous” loss when, based on the insured’s knowledge at the time the insurance policy issued, it was reasonably foreseeable that such damage was almost certain to occur if certain preventative measures were not taken?"
FACTUAL BACKGROUND
Mainspring owned commercial property leased to Star Fisheries for decades. Star Fisheries’ use of water and salt allegedly caused structural damage over time. In 2010, Mainspring learned of damage and made some repairs but did not implement all recommended preventive measures. In 2021–2022, additional similar structural damage was discovered, and ...
