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Proof of UM Coverage Not Required to Prove Bad Faith.

          An insured was not required to reestablish his entitlement to uninsured motorist benefits when seeking to prevail on his common law bad faith and statutory unreasonable delay of benefits claims in Uhl v. Progressive Direct Insurance Co.[1]

[1] Uhl v. Progressive Direct Ins. Co., 765  F. Supp. 3d 1176, 1186 (D. Colo. 2025).

Case law on the issues discussed in this article is collected in Volume 2 of the Third Edition of LITIGATION AND PREVENTION OF INSURER BAD FAITH § 9:3, The Question of Bad Faith (Thomson Reuters West Publishing Co., with 2025 Supplements in process).

Please read the disclaimer.  ©2025 Dennis J. Wall.  All rights reserved.  Interested in many things including Claims and Bad Faith Law?  Sign up for a free subscription to my Substack newsletter. 

One Last Time ... (Today is the Deadline to Comment.)

As I wrote before, so one last time it's worth the asking for sure:  Why don't you leave a Comment on the proposed Civil Service Rule on or before today, June 7?  You still have time to affect the outcome.  Go ahead, affect the outcome.

And here is a Comment I left yesterday.  It may be different from the one you will leave today.  That's okay.  Go ahead and affect the outcome in your own words with your own thoughts.

Agency:  Office of Personnel Management.

Docket ID:  OPM-2025-0004.

RIN 3206-AO80.

This proposed rulemaking by the Office of Personnel Management is titled "Improving Performance, Accountability and Responsiveness in the Civil Service."  OPM is not authorized to issue this proposed rule-making.  To the contrary, OPM is prohibited by the governing statutes enacted by Congress from promulgating this proposed rule-making.

OPM's instant rule-making is at once both unauthorized, and contrary to OPM's rule-making authorization extended by Congress.

OPM is the creature of an Act of Congress.  From its inception in 1978, OPM was required by Congress to abide by Congressionally required protections afforded by the laws enacted by Congress.  See, e.g., 5 U.S.C.A. § 1103(a)(5)(A), providing that the Director of OPM's functions include "executing, administering, and enforcing (A) the civil service rules and regulations of the President and the Office and the laws governing the civil service" (emphasis added); and id., § 1103(b), which requires OPM when promulgating rules to follow notice and comment procedures established by Congress in the Administrative Procedure Act (APA).

In recognition of the obvious fact that from its inception, OPM has been required by Congress to promulgate rules governing the civil service which are subject to laws enacted by Congress, OPM seems to have followed the APA's notice and comment procedures here, in the instant proposed rule-making, for example.

The focus of OPM's instant proposed rule-making is on efficiency of the civil service.  OPM has been authorized by Congressional statute to prescribe rules for agencies to take action "against an employee only for such cause as will promote the efficiency of the service."  5 U.S.C.A. § 7513(a).  OPM acknowledges that this is the source of what OPM calls "[m]odern adverse action procedures for most Federal employees[.]"  See 90 FR at 17199.

In addition, agencies have been authorized by Congress to "reduce in grade or remove an employee for unacceptable performance," subject to the provisions of Section 4303,  5 U.S.C.A. § 4303(a), which of course include its remaining subsections, id., § 4303(b)-(d).

But the rules which Congress has authorized OPM to prescribe must include notice and opportunity to be heard, standard Constitutional protections of Due Process, prescribed by Congress.  See, e.g., 5 U.S.C.A. § 7513(b)-(e); 5 U.S.C.A. § 4303(b)-(d).

OPM's proposed rule-making does not afford Due Process protections of any kind.  OPM does not follow either Section 7513 or Section 4303 in this regard.  To the contrary, a clear result of finalizing OPM's Proposed Rule would be to circumvent the Due Process protections enacted by Congress in those Sections of the United States Code.

OPM's proposed rule-making does not offer any substitute for the Due Process protections afforded by Section 4303 or by Section 7513.  To the contrary, in this Proposed Rule OPM would remove or eliminate those protections for the thousands of workers that would be covered by this rule-making should it be finalized.

For these reasons, whether they are taken separately or together, OPM's proposed rule should not be finalized and, if finalized, it should instead be rewritten or totally withdrawn, but if it is not rewritten or withdrawn, it should be declared arbitrary and capricious by every reviewing court and its enforcement should be enjoined.

OPM's instant rule-making is arbitrary and capricious for at least two reasons as a result:  (1)  failure to offer an alternative and (2) failure to tailor rules to address the narrowest possible focus without adversely affecting employee rights.

As noted, OPM's rule-making does not provide any substitutes of any kind for the notice and opportunity to be heard, i.e., Due Process, provisions extended by Congress to federal workers.  See, e.g., 5 U.S.C.A. § 4303(b)-(d); 5 U.S.C.A. § 7513(b)-(e).  This failure alone dooms the proposed rule-making.  If the law is followed by OPM, then this proposed rule-making should not be finalized.  If for some reason this proposed OPM rule-making is made final, the reviewing courts must declare it invalid and unauthorized.

Second, OPM's proposed rule-making for the same reasons does not address the narrowest possible focus of the concerns OPM expresses in it, without adversely affecting employee rights by its proposed rule-making.  In this case, OPM ultimately states its apparently foregone conclusion that efficiency of the federal civil service can only be improved by removing the Due Process protections established by Congress.  This failure, too, dooms the proposed rule-making.  If the law is followed by OPM, then this proposed rule-making should not be finalized.  If for some reason this proposed OPM rule-making is made final, the reviewing courts must declare it invalid and unauthorized.

For all of the reasons expressed in this Comment, whether taken separately or together, OPM's proposed rule should not be finalized.  It should instead be rewritten or simply withdrawn.   If it is not rewritten or withdrawn, it should be declared arbitrary and capricious by every reviewing court and its enforcement should be enjoined.

Thank you for your consideration.

Please read the disclaimer.  ©2025 Dennis J. Wall.  All rights reserved.  Interested in many things including Claims and Bad Faith Law?  Sign up for a free subscription to my Substack newsletter. 

Have your say. While there's Still Time. The Second Part.

Why don't you leave a Comment on the proposed Civil Service Rule on or before June 7?  You still have time to affect the outcome.  Go ahead, affect the outcome.

And here is a Comment I left today.  It may be different from yours.  That's okay.  Go ahead and affect the outcome in your own words with your own thoughts.

 

Agency:  Office of Personnel Management.

Docket ID:  OPM-2025-0004.

RIN 3206-AO80.

This proposed rulemaking is titled "Improving Performance, Accountability and Responsiveness in the Civil Service."  This Comment will offer some evidence, some law, and overall it will offer substantive Comment.

The stated goal of  the Office of Personnel Management's proposed rule-making here, is to promote the efficiency of the service.

Congress has already provided that remedy.  Section 7513 in Title 5 of the United States Code is titled Cause and Procedure.  In part here pertinent, Section 7513 provides in its first subsection as follows:

Under regulations prescribed by the Office of Personnel Management, an agency may take an action covered by this subchapter against an employee for such cause as will promote the efficiency of the service.

5 U.S.C.A. § 7513(a) (emphasis added).

As evidence, I respectfully submit the facts of a case that was not cited in the 43 pages of OPM's proposed rule-making, but should have been.

In O'Neill v Dep't of Housing and Urban Dev., 220 F.3d 1354 (Fed. Cir. 2000), cert. denied, 531 U.S. 1197, 121 S. Ct. 1202 (2001) the decision of the Merit Systems Protection Board (MSPB) was affirmed to remove a federal employee from the workforce of the Department of Housing and Urban Development at the time.  The Federal Circuit upheld the MSPB's decision to remove the employee after reviewing the record.   The U.S. Supreme Court thereafter denied certiorari.

The Circuit Court pointed out that the Administrative Law Judge (ALJ) in the case invoked the principle which, then and now, provides that an employee's disrespect toward her supervisors seriously interfered with HUD's fulfillment of its mission.

The agency built up a record which included evidence submitted to the ALJ of specific statements from the agency detailing the ways in which the particular employee's specific conduct adversely affected "the efficiency of the service," as required by Section 7513(a), supra.

There is nothing preventing an agency from meeting its burden of proof over 25 years later after this case was presented to the ALJ, decided by the MSPB, and affirmed by the Federal Circuit Court of Appeals.

And none of the facts of the O'Neill line of cases in any way supports revocation or elimination of  employee protections of adverse action procedures or appeals such as Congress provided in Section 7513.

The proposed rule-making titled "Improving Performance, Accountability and Responsiveness in the Civil Service" is legally inadequate and insufficient in the face of existing solutions to the "problem" outlined at length in it  by the Office of Personnel Management.  It should be withdrawn and, if it is not withdrawn, it should not survive judicial review because it violates at least section 706(2)A) of the Administrative  Procedure Act (APA):

The reviewing court shall--

* * *

(2) hold unlawful and set aside agency action, findings, and conclusions found to be--

(A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law[.]

5 U.S.C.A. § 706(2)(A).

For all these reasons, whether taken separately or together, this proposed rule should not be finalized.  It should instead be rewritten or simply withdrawn.   If it is not rewritten or withdrawn, it should be declared arbitrary and capricious by every reviewing court and its enforcement should be enjoined.

Thank you for your consideration.

Please read the disclaimer.  ©2025 Dennis J. Wall.  All rights reserved.  Interested in many things including Claims and Bad Faith Law?  Sign up for a free subscription to my Substack newsletter. 

Have your say. While there's still time.

Why don't you leave a Comment on the proposed Civil Service Rule on or before June 7?  You still have time to affect the outcome.  Go ahead, affect the outcome.

Here is a Comment I left yesterday.  It may be different from yours.  That's okay.  Go ahead and affect the outcome in your own words with your own thoughts.

Agency:  Office of Personnel Management.

Docket ID:  OPM-2025-0004.

RIN 3206-AO80.

This proposed rulemaking is titled "Improving Performance, Accountability and Responsiveness in the Civil Service," but it should not survive judicial review because it violates at least sections 706(2)A), (D), and (F) of the Administrative  Procedure Act (APA):

The reviewing court shall--

* * *

(2) hold unlawful and set aside agency action, findings, and conclusions found to be--

(A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law;

* * *

(D) without observance of procedure required by law;

* * *

or

(F) unwarranted by the facts to the extent that the facts are subject to trial de novo by the reviewing court.

5 U.S.C.A. § 706(2)(A), (D) & (F).

When reviewing agency action under the "arbitrary and capricious" standard under the Administrative Procedure Act (APA), reviewing courts should not always substitute their judgment for the agency's judgment.  However, reviewing courts should always instead determine whether (1) the agency in question has actually considered the relevant data and (2) stated a satisfactory explanation for its action, including whether the agency has made a legally sufficient showing in its explanation of a rational connection between the facts found by the agency and the choice made by the agency.

In any case, the agency may not proffer "conclusory statements or unsubstantiated claims in defense of its decisions.  Yet OPM has done precisely that here."  OPM must offer more by way of evidence to support its decision than its own 'say so' in support.  "Reviewing courts are not obliged, in the name of judicial deference, to uphold agency action on the basis of purely self-serving statements."  Nat'l Treasury Ees. U. v. Horner, 654 F. Supp. 1159, 1163 (D.D.C. 1987), aff'd in part, remanded with directions, 854 F.2d 490 (D.C. Cir. 1988).

OPM's proposed rule-making here would make thousands of federal employees who currently enjoy protections from adverse actions, "at-will" employees without protection from adverse actions of their superiors who temporarily occupy the federal government.  See 90 FR at 17182, in the first paragraph of OPM's "Summary" Section:

Yet they will be at-will positions excepted from adverse action procedures or appeals.

OPM's proposed removal of protections from adverse action in federal employment is supported in this rule-making only by polls (which OPM denominates as "surveys"), anecdotes, and speculation.  It is not supported by evidence, as required.

Instead of providing evidence and a record, OPM has provided the supposed opinions of unknown, unidentified persons in the federal government who apparently have complained about how hard they find it to fire their subordinates.  After pages of polls, anecdotes, and speculation, OPM then offers its conclusion which simply does not follow from all or any of these polls, anecdotes, and speculation:

OPM now recognizes that the weight of evidence shows that chapter 43 and 75 procedures [defined by the OPM as "adverse action procedures or appeals," 90 FR 17182] make effectively addressing poor performance, misconduct, and corruption difficult.

90 FR at 17191.

It is tempting to say that if OPM supervisors find it "difficult" to address poor performance, misconduct, and corruption unless they are permitted to take away other people's protections from adverse employment actions, then they should find a job that is not so "difficult" for them.

Yet that observation is actually not snide, it seems.  It is at the heart of the defect in this attempted rule-making.

OPM is tasked with finding a way of dealing with employee discipline that is supported by the record, and is not arbitrary, capricious, or illegal but is instead rational and related to the evidence it has provided in support of its decision.

OPM has not provided evidence in support of its decision, and its decision is not rational or related to the "record," such as it is.  There is actually no legally sufficient record for this rule-making.

Further, OPM offers no proof at all that chapter 43 and 75 procedures are the cause of OPM's concerns with removing unperforming federal employees, or for that matter, that the current procedures cannot be changed or supplemented.

This is indicative of OPM's overall approach to this rule-making.  OPM has ignored alternatives at every step it has taken along the way toward its conclusion, alternatives that OPM was required to address and which OPM did not address at any point.

For all these reasons, whether taken separately or together, this proposed rule should not be finalized.  It should instead be withdrawn.   If it is not withdrawn, it should be declared arbitrary and capricious by every reviewing court and its enforcement should be enjoined.

Thank you for your consideration.

Please read the disclaimer.  ©2025 Dennis J. Wall.  All rights reserved.  Interested in many things including Claims and Bad Faith Law?  Sign up for a free subscription to my Substack newsletter. 

 

Discovering Post-Litigation Materials: Part Two, the Final Part.

This is the second of two parts.  The first part was published here on Monday, June 2, 2025.

          The reason that this was not the end of the matter lies in how the Court got to this point.  The Court’s inquiry into discoverability of these materials was informed by guidance from two sources:  federal proportionality of discovery, and Colorado doctrine concerning the duty of good faith and fair dealing here.  To the Court, proportionality of discovery in federal court meant that the defendant carrier should not be required to produce information for which the defendant “claims work product or privilege protections over post-litigation claim review materials,” i.e., “those objections” which the defendant “reflected in a [future] privilege log.”[6]    Parenthetically, the Court had previously noted that up until this point, “so far as the Court can tell,” the defendant had not yet put these materials on a privilege log to support its “work product argument[.]”[7] 

          The second source informing the Court’s resolution of the policyholder’s motion to compel production of the post-litigation claims evaluation and review materials in this case, was Colorado law.  After wending its way through the thicket of Colorado cases involving the duty of good faith and fair dealing in third-party and in first-party bad faith cases (including at least one UIM case), the Court held that Colorado law would recognize a continuing duty of good faith and fair dealing in this case even after the bad-faith lawsuit was filed:

An insurer who continues to evaluate a claim is necessarily creating new discoverable documentation while the case is pending. However, unless and until Colorado law changes to relieve an insurer of its post-litigation duty of good faith, that duty must be tested through discovery. The difficulties this presents for courts should not give insurers a free pass on that discovery. Additionally, courts have many tools at their disposal to manage discovery, curtail it where necessary, and stave off discovery abuses. [Citation omitted.]   Thus, the concern over process will not deter this Court from ordering relevant and proportional discovery that will facilitate adjudication on the merits. [Citations omitted.]  Insureds are entitled to know whether their insurers continue to operate in good faith and post-litigation claim review materials are relevant to that determination.[8]

          In the end, the issue of discoverability of post-litigation claim materials reviewed and evaluated by the defendant carrier in this insurer bad faith case required the Court to resolve the tug of Federal proportionality and the pull of State law.  The Court resolved the dispute in this matter with this succinct holding:

  CONCLUSION

For these reasons it is

ORDERED that Plaintiff’s Motion (Doc. No. 24) is GRANTED to the extent Defendant does not log the communication/document on a privilege log. It is DENIED without prejudice to the extent Defendant logs it on a privilege log within 10 days of this order.[9]

An earlier version of this post was published here in September, 2024 based on the information available then.

Case law on the issues discussed in this article is collected in Volume 1 of the Third Edition of LITIGATION AND PREVENTION OF INSURER BAD FAITH § 8:5, Claims Adjuster's Files (Thomson Reuters West Publishing Co., with 2025 Supplements in process).

Please read the disclaimer.  ©2025 Dennis J. Wall.  All rights reserved.  Interested in many things including Claims and Bad Faith Law?  Sign up for a free subscription to my Substack newsletter. 

[6] Lynn, 748 F. Supp. 3d at 1035.

[7] Lynn, 748 F. Supp. 3d at 1032.

[8] Lynn, 748 F. Supp. 3d at 1035.

[9] Lynn, 748 F. Supp. 3d at 1035 (boldface in original).

Discovering Post-Litigation Materials: Part One.

In Lynn v. State Farm Mutual Automobile Insurance Co.,[1] a U.S. Magistrate Judge dealt with the thorny issue of discovery of post-litigation claim evaluation and review materials.

          The dispute was presented to the Court by the plaintiff-policyholder’s, Ms. Sheree Lynn’s, motion to compel.  Injured in an automobile accident, the other party’s insurance carrier paid her that policy’s bodily injury liability limits.  Ms. Lynn then claimed the underinsured motorist (UIM) benefits under how own policy with State Farm. 

          Ms. Lynn and State Farm disagreed over “the nature and extent” of Ms. Lynn’s injuries.[2]  She eventually brought the instant suit for insurer bad faith.

          “Plaintiff seeks an order requiring the production of Defendant’s post-litigation claim review materials.”[3]  Put another way, Ms. Lynn requested among other things, materials which State Farm obtained in discovery in this bad faith case.  Among the materials State Farm obtained in discovery in this bad-faith case were “over 40+ medical and employment Authorizations” from Ms. Lynn’s “’employers and medical providers,’” she told the Court.[4]   

          She was not interested so much in these discovery materials per se, as in materials reflecting State Farm’s evaluation and review of this and other information after the bad-faith litigation commenced.

          State Farm’s response to the plaintiff’s requested discovery included what the Court described as an admission “that it ‘continues to review information obtained post-suit[.]’  (Doc. No. 30 at 2-3, 5.)”  (All brackets and parentheses by the Court.)  The Court’s response was succinct insofar as establishing a right in this case to relevant, unprivileged claim evaluation material obtained and reviewed by State Farm regarding Lynn’s UIM claim after the bad-faith litigation began:

Plaintiff is entitled to know whether that review has been conducted in good faith and whether Defendant is adhering to its duty of good faith and fair dealing.[5]

That may seem to an outside observer to have ended the matter, but it didn’t.

To be continued .... An earlier version of this post was published here in September, 2024 based on the information available then.

Case law on the issues discussed in this article is collected in Volume 1 of the Third Edition of LITIGATION AND PREVENTION OF INSURER BAD FAITH § 8:5, Claims Adjuster's Files (Thomson Reuters West Publishing Co., with 2025 Supplements in process).

Please read the disclaimer.  ©2025 Dennis J. Wall.  All rights reserved.  Interested in many things including Claims and Bad Faith Law?  Sign up for a free subscription to my Substack newsletter. 

 

[1] Lynn v. State Farm Mut. Auto. Ins. Co., 748 F. Supp. 3d 1030 (D. Colo. 2024).

[2] Lynn, 748 F. Supp. 3d at 1031.

[3] Lynn, 748 F. Supp. 3d at 1031. 

[4] Lynn, 748 F. Supp. 3d at 1031.

[5] Lynn, 748 F. Supp. 3d at 1034-35.

Commenting: Proposed Rule "Disappears" Years Of Civil Service Protections...

Comments can be left on www.regulations.gov to June 7, 2025 about a proposed rulemaking that is intended to take away years of Civil Service Protections.

The way this proposed rule is set up, in order to leave a Comment you must also write the name of the agency involved, and the docket number or Regulation Identifier Number (RIN) for this rulemaking.

Here is an example of a Comment.  I left it earlier this morning.  Feel free to leave your own Comments; I am giving this one here only as an example.

Feel free as well to leave as many Comments as you like before the deadline.  Feel free also to leave detailed and informed Comments.  They have to read every one; they must respond to "substantive" Comments or a reviewing Court would have grounds to toss the proposed rule for that reason alone.

Here is my example:

Agency Name: Office of Personnel Mangement.
Docket ID: OPM-2025-0004.
RIN 3206-AO80.
Re: Proposed rulemaking.

This proposed rule, titled "Improving Performance, Accountability and Responsiveness in the Civil Service," does not list a legally sufficient source of authority for this proposed rulemaking.

The Summary recites merely:

"The OPM Director is generally charged with executing, administering, and enforcing the civil service rules and regulations of the President and the laws governing the civil service." 90 FR at 17183.

That is not good enough. If this proposed rulemaking were supported by reference to a SPECIFIC charge to the OPM Director, the specific reference would be cited. It was not cited. There is none.

For these reasons alone, the proposed rule is legally insufficient and must be rejected.

Before the Office of Personnel Management can lawfully exercise such powers as are embodied in this proposed rulemaking, please tell the Court that will review this matter, what is the source of authority SPECIFICALLY that authorizes the OPM to issue this particular proposed Rule?

Thank you for your attention to this matter.

I will try to link to the entire proposed rule here.  It takes up 43 pages in the Federal Register:  https://www.regulations.gov/document/OPM-2025-0004-21022.

Please read the disclaimer.  ©2025 Dennis J. Wall.  All rights reserved.  Interested in many things including Claims and Bad Faith Law?  Sign up for a free subscription to my Substack newsletter. 

The way this proposed rule is set up, in order to leave a Comment you must also write the name of the agency involved, and the docket number or Regulation Identifier Number (RIN) for this rulemaking.

Here is an example of a Comment.  I left it earlier this morning.  Feel free to leave your own Comments; I am giving this one here only as an example.

Feel free as well to leave as many Comments as you like before the deadline.  Feel free also to leave detailed and informed Comments.  They have to read every one; they must respond to "substantive" Comments or a reviewing Court would have grounds to toss the proposed rule for that reason alone.

Here is my example:

Agency Name: Office of Personnel Mangement.
Docket ID: OPM-2025-0004.
RIN 3206-AO80.
Re: Proposed rulemaking.

This proposed rule, titled "Improving Performance, Accountability and Responsiveness in the Civil Service," does not list a legally sufficient source of authority for this proposed rulemaking.

The Summary recites merely:

"The OPM Director is generally charged with executing, administering, and enforcing the civil service rules and regulations of the President and the laws governing the civil service." 90 FR at 17183.

That is not good enough. If this proposed rulemaking were supported by reference to a SPECIFIC charge to the OPM Director, the specific reference would be cited. It was not cited. There is none.

For these reasons alone, the proposed rule is legally insufficient and must be rejected.

Before the Office of Personnel Management can lawfully exercise such powers as are embodied in this proposed rulemaking, please tell the Court that will review this matter, what is the source of authority SPECIFICALLY that authorizes the OPM to issue this particular proposed Rule?

Thank you for your attention to this matter.

I will try to link to the entire proposed rule here.  It takes up 43 pages in the Federal Register:  https://www.regulations.gov/document/OPM-2025-0004-21022.

Please read the disclaimer.  ©2025 Dennis J. Wall.  All rights reserved.  Interested in many things including Claims and Bad Faith Law?  Sign up for a free subscription to my Substack newsletter. 

THE DESPERATE DISTRACTION OF "COMPARATIVE BAD FAITH."

Research to date has not disclosed a single case of alleged insurer bad faith in settlement (or alleged insurer bad faith in anything else), in which a court held in favor of a defense of comparative bad faith.  (Florida and perhaps one other State has apparently tried to enact the defense by statute, but no reported cases have yet been found in which the statute(s) reached the courts.)

The reasons given by the courts have included (1) the nearly universal fact that an insured's breach of good faith gives rise to a contract claim against that insured; (2) various kinds of insured misconduct will void insurance coverage, in which event there would be no insurer bad faith in settlement because there would be no coverage under the policy at issue, and (3) if the insured's bad faith falls to the level of fraud, it gives rise to a lawsuit against that insured for fraud.  These are protections which the courts have generally recognized as belonging to liability insurance carriers in this country, even without a defense of so-called comparative bad faith.

Of all the decisions rejecting such a defense by carriers presumably weary not so much of their own bad-faith behavior in settlement, but of paying damages beyond policy limits, perhaps the best explanation that this defense simply does not and cannot exist is the explanation given by the Supreme Court of California in 2000 in the case of Kransco v. American Empire Surplus Lines Ins. Co.[1]:

          We observe that rejection of comparative bad faith in this context does not leave the insurer without remedies for an insured’s breach of the covenant of good faith and fair dealing. Evidence of an insured’s misconduct may factually disprove the insurer’s liability for bad faith by showing the insurer acted reasonably under the circumstances.  [Citations omitted.]   The insured’s breach of the covenant of good faith and fair dealing is also separately actionable as a contract claim.  [Citation omitted.]   Some forms of misconduct by an insured will void coverage altogether under the insurance policy. [Citation omitted.]  Of course, without coverage there can be no liability for bad faith on the part of the insurer. [Citation omitted.]  And, ... an insured’s fraudulent misconduct is separately actionable and can give rise to tort damages. These remedies adequately serve to protect an insurer from the insured’s misconduct without creating the logical inconsistencies and troublesome complexities of a defense of comparative bad faith.[2]

Case law on the issues discussed in this article is collected from third-party decisions in Volume 1 of the Third Edition of LITIGATION AND PREVENTION OF INSURER BAD FAITH § 5:27.50, Comparative Bad Faith (Thomson Reuters West Publishing Co., with 2025 Supplements in process), and in Volume 2, § 11:16.50, Comparative Bad Faith, collecting first-party cases.

Please read the disclaimer.  ©2025 Dennis J. Wall.  All rights reserved.  Interested in many things including Claims and Bad Faith Law?  Sign up for a free subscription to my Substack newsletter. 

[1] Kransco v. Am. Empire Surplus Lines Ins. Co., 23 Cal. 4th 390, 2 P.3d 1, 97 Cal. Rptr. 2d 151 (Cal. 2000).

[2] Kransco, 23 Cal. 4th at 408, 2 P.3d at 13-14, 97 Cal. Rptr. 2d at 164-65 (emphasis by the Court).

 

Timeliness of Third-Party Bad Faith Claims, Limitations, Wasting Policies.

In Jenkins ex rel. CLJ Healthcare, LLC v. Prime Insurance Co.,[1] the Tenth Circuit Court of Appeals applied the bad faith law of Utah which, in pertinent part, matches the majority view held by courts across the United States.

          The Tenth Circuit panel dealt with bad faith claims that boiled down on appeal to two ultimate facts:

1. Prime [the liability carrier] failed to tell CLJ [the policyholder] how much coverage was available.
2. Mr. Jenkins [the injured plaintiff] demanded $100,000 in settlement, but Prime counter-offered for less without telling CLJ that it could contribute to the settlement.[2]

          As interpreted by the panel, Utah law required the entry of an excess judgment in the underlying case:

The district court concluded that the bad-faith claim would be untimely under a theory involving either contract or tort. On appeal, CLJ characterizes its bad-faith claim as a tort based on Prime's duty as a fiduciary.  So we address timeliness of the claim under a tort theory.[3]

The appellate panel concluded that the bad-faith claim was potentially timely under a tort theory, and accordingly reversed the trial court’s summary judgment for the carrier in this case.

Case law on the issues discussed in this article is collected in Volume 1 of the Third Edition of LITIGATION AND PREVENTION OF INSURER BAD FAITH § 5:20, Statutes of Limitation (Thomson Reuters West Publishing Co., with 2025 Supplements in process).

Please read the disclaimer.  ©2025 Dennis J. Wall.  All rights reserved.  Interested in many things including Claims and Bad Faith Law?  Sign up for a free subscription to my Substack newsletter. 

 

[1] Jenkins ex rel. CLJ Healthcare, LLC v. Prime Insurance Co., No. 23-4113, 2024 WL 4040386 (10th Cir. Sept. 4, 2024).

[2] Prime, 2024 WL 4040386, at *6. 

[3]Prime, 2024 WL 4040386, at *6.  It is worth noting that the Tenth Circuit panel in Prime was confronted with an underlying medical malpractice action against what it called “a physicians’ company,” CLJ.  The policy at issue in the case was “a wasting policy, where the amount for indemnity is reduced by the amount spent on defense costs.”  Prime, 2024 WL 4040386, at *1 (emphasis by the Court). 

THE BATTLE AT THE LIBRARY OF CONGRESS. MONDAY, MAY 12, 2025.

To rephrase a song from back in the day, 'The regime fought the law.  And the law won.'

Library of Congress.  (Library of Congress Website)

 

It was different on Monday.   It happened at the Library of  Congress.

When the regime previously tried to take over buildings, the regime was largely successful in the attempt.  In the past, they came in large numbers accompanied by large men who said that they were "U.S. Marshals," but who did not show their badges or wear uniforms or carry ID, although they may have come in masks and balaclavas, some of them.

No, it was not like that on Monday, May 12, 2025 at the Library of Congress.  The regime sent two lawyers to take over the U.S. Copyright Office.  The Copyright Office is a part of the Library of Congress and so it is housed in that building.

When what has become known as the Battle at the Library of Congress began, the two lawyers apparently relied on attempted intimidation.  Understandably, being lawyers they did not try to muscle their way in.  Rather, they announced that they had come to take over the Copyright Office and they demanded the keys.

The Librarians working at the Library of Congress refused admission to  the takeover lawyers and the Librarians declined to be taken over by the regime.  They apparently pointed out that they work for Congress, not the regime.

Then the Librarians called the cops.

Before the cops arrived, the lawyers left.  At the end of the day, Librarians were still in charge of the Library.

It is a pretty good guess that this will not be the end of the story.  In fact, it is almost certainly not the end; the regime doesn't ever seem to stop trying despite its repeated  failures.  But the Librarians will be ready for them if they come back. 

I hope that we will all be ready, when the time comes.

Things are looking brighter in general than they did in late January of 2025.  We have a long way to go.  Take the long view.

Be sure to celebrate successes along the way.  And so, remember the example set by Librarians on Monday, May 12, 2025.

What follows is an article I previously published on Substack earlier this week.  I have continued to try to find further information on this event, including on what steps if any the regime is taking to avenge their humiliation.  I have nothing new to report.  The article that follows is based on the latest -- and only -- information available, so far as I can find it.

LIBRARIANS ROCK.

When you rile up a librarian, you better watch out if you know what's good for you.

I do not know what happened after the librarians kept the regime's agents from taking over the U.S. Copyright Office.

The agents showed up on Monday, May 12, 2025  at the Library of Congress which houses the U.S. Copyright Office.  The librarians stopped them from taking it over and called the cops.  Then the agents went away.

I have looked over the whole Internet but I have not been able to find out what if anything happened since Monday (and certainly something has, we just haven't heard about it, yet).

I have asked for information on social media and here on Substack, but so far crickets.

All I know for sure is that librarians did not allow agents of the regime to take over the U.S. Copyright Office in the Library of Congress on Monday.

The reports I have read identify the two agents of the regime as "Department of Justice officials."  Are you kidding me?  Do you not know who runs the Department of Justice now?  It's not the same Department of Justice that your mothers and fathers grew up with, you know.

Some reports have also mentioned Shira Perlmutter, the Director of the Copyright Office and Carla Hayden, the Librarian of Congress.  The reports had it that both were "fired" by the head of the regime.  I call BS.

I call BS because the head of the regime did not fire either person.  He could only say that he fired them; he never had the actual power.  Don't give it to him.

Relish instead the only facts we truly have, and they are good to know:  Librarians turned away agents of the regime when they tried to take over.

We need more librarians.  Or, at least we need more of the courage that inspired librarians displayed at the Library of Congress in Washington, D.C. on Monday.

Please read the disclaimer.  ©2025 Dennis J. Wall.  All rights reserved.  Interested in many things including  Claims and Bad Faith Law?  Sign up for a free subscription to my Substack newsletter. 

Waiver in Insurer Bad Faith Cases.

In Yogeshwar, Inc. v. Society Ins., 739 F. Supp. 3d 714, 727 (N.D. Iowa 2024), applying Iowa substantive law, the Court denied motions for summary judgment because of the existence of genuine issues of material fact as to the insurance carrier's waiver of a contractual limitations period.  Yogeshwar, 739 F. Supp. 3d at 729 (first-party case).

            In Bailey v. People’s Trust Ins. Co., 392 So.3d 123 (Fla. 4^th DCA 2024) (first-party insurer bad faith case),  a Florida intermediate appellate court agreed with a homeowner-policyholder’s argument that “by responding to the CRN on the merits and failing to identify any specific defect with the CRN in its response, [her insurance carrier] waived the right to contest the validity of the CRN in the bad faith action. We agree.”  Bailey, 392 So. 3d at 124.

           By deciding to respond to the Civil Remedy Notice on the merits while failing to identify a specific defect within the CRN, the homeowner’s carrier may have added icing to the cake, or in this case, to its waiver.  Under established Florida law applied in the Bailey decision, “an insurer waives its right to contest a defect in the CRN if it fails to identify the specific defect in its response to the CRN.”  Bailey, 392 So. 3d at 124.

          The appellate court accordingly reversed the trial court’s grant of summary judgment to the carrier in this case on the issue of the CRN’s invalidity and remanded for determination of the bad faith claim.

Case law on the issues discussed in this article is collected in Volume 1 of the Third Edition of LITIGATION AND PREVENTION OF INSURER BAD FAITH § 5:13, Waiver and Release (addressing third-party cases), and in Volume 2, § 11:14, Waiver (addressing first-party cases) (Thomson Reuters West Publishing Co., with 2025 Supplements in process).

Please read the disclaimer.  ©2025 Dennis J. Wall.  All rights reserved.  Interested in many things including Claims and Bad Faith Law?  Sign up for a free subscription to my Substack newsletter. 

To Be A Drum Major For Justice.

https://claimsandissues.substack.com/p/say-that-i-was-a-drum-major-for-justice

An Open Letter to my Fellow Lawyers.

 

https://claimsandissues.substack.com/p/an-open-letter-to-my-fellow-lawyers

PERKINS COIE LLP v. U.S. DEP'T OF JUSTICE Memorandum Opinion, May 2, 2025.

https://claimsandissues.substack.com/p/perkins-coie-llp-v-us-dept-of-justice

Private Projects, Public Money.

https://claimsandissues.substack.com/p/the-skinny-budget-calling-names-different

Stipulated Protective Orders: Confidentiality and Proof Burdens in Insurance Cases.

In Wright v. State Farm Fire & Casualty Co.,[1] the policyholders filed two motions to seal.  Both were unopposed.  That might set you to thinking that granting the two unopposed motions would be automatic.  If you thought that, you would be wrong.

          In this case, the policyholders’ motions to seal related to “several documents cited in their briefing [that] are covered by the parties’ stipulated protective order and should therefore be filed under seal.”  The Local Rules of the Western District of Washington where this action is pending, incorporate the “strong presumption of public access to the court’s files.”   To overcome this strong presumption, “a party seeking to file a document under seal must provide ‘[a] specific statement of the applicable legal standard and the reasons for keeping a document under seal, including an explanation of’ specific factors. LCR 5(g)(3)(B).”[2] 

          In the Wright case, the policyholders, the Wrights, were of course the parties “seeking to file a document under seal,” but they only provided a statement that State Farm had designated the documents in question “confidential” under a Stipulated Protective Order.

          In the ordinary course of litigation, then, the Wrights’ motions to seal should simply have been denied because they did not provide the required specific statement in order to seal the documents.  But that is not what the Court in this case did.  Instead, this Court shifted the burden of proof entirely to the party claiming confidentiality, in this case, State Farm:

The Court does not reach the question of whether the presumption of public access has been overcome here. The Wrights seek to file the documents at issue under seal because State Farm “has designated [them] as confidential during discovery.” See LCR 5(g)(1)(A). Thus, to the extent State Farm wishes to maintain the confidentiality of these documents, it bears the burden of satisfying LCR 5(g)(3)(B).[3]

           It appears to be a rule in the process of being established, if it is not in fact already an established rule in insurance and non-insurance cases alike, that the party actually seeking confidentiality in a given case is the party that bears the burden of proof on the confidentiality issue:

While Plaintiff technically constitutes the moving party for this Motion, where “a party moves to file material under seal because another party has designated that material as confidential, the party designating the material as confidential must file a response to the motion complying with requirements [around providing statements why sealing is necessary and references to the governing case law].” E.D. Va. Civ. R. 5(C). In light of Defendant’s designation of the relevant materials, and in accordance with Local Civil Rule 5, the Court finds that Defendant constitutes “the party seeking to restrict access” and therefore bears the burden to overcome the First Amendment right of access in this case. Va. Dep’t of State Police [v. Wash. Post, 386 F.3d 567] at 575 [(4^th Cir. 2004)].[4]

This was exactly the approach taken by the Federal Trade Commission in recent litigation, such as in Federal Trade Commission v. Amazon.com Inc. in the Western District of Washington,[5] discussed in DENNIS J. WALL, LITIGATION AND PREVENTION OF INSURER BAD FAITH § 3:107.50 and which of course is the same Court as the Court in which the Wright decision was issued, and such as in Federal Trade Commission v. U.S. Anesthesia Partners., Inc.[6]

 

[1] Wright v. State Farm Fire & Cas. Co., No. 2:23-cv-179, 2024 WL 4979849 (W.D. Wash. Dec. 4, 2024).

[2] Wright, 2024 WL 4979849, at *4. 

[3] Wright, 2024 WL 4979849, at *4 (emphasis added).  

[4] Mission 1^st Grp., Inc. v. Mission First Solutions, LLC, No. 1:23cv1682 (DJN), 2025 WL 864278, at *2 n.2 (E.D. Va. March 19, 2025).

[5] Fed. Trade Comm’n v. Amazon.com Inc., (W.D. Wash. No. 2:23-cv-01495-JHC).

[6] Fed. Trade Comm’n v. U.S. Anesthesia Ptrs., Inc. (S.D. Tex. No. 4:23-cv-03560).  The FTC v. U.S. Anesthesia Partnes case is discussed at greater length in Volume 2, id., §§ 9:28.50 and 9.30.

Case law on the issues discussed in this article is collected in Volume 1 of the Third Edition of LITIGATION AND PREVENTION OF INSURER BAD FAITH § 3:107.50, and in Volume 2 in §§ 9:28 & 9:30 (Thomson Reuters West Publishing Co., with 2025 Supplements in process).

Please read the disclaimer.  ©2025 Dennis J. Wall.  All rights reserved.  Interested in many things including Claims and Bad Faith Law?  Sign up for a free subscription to my Substack newsletter. 

Perkins Coie v. U.S. Dep't of Justice, Memorandum Opinion, May 2, 2025

Perkins Coie Memorandum Opinion May 2, 2025.  (Author Photo)

"No American President has ever before issued executive orders like the one at issue in this lawsuit," thus beginning the first sentence of an opinion that spans 102 pages.  Most of the 102 pages of this opinion consists of the regime's arguments and contentions.

      As you might expect, there is a lot in this opinion.  Together, we will explore the most significant of many significant issues as the week goes on starting Monday.  I wanted to get the opinion to you as soon as I could today, and not just showing it to you, then telling you to read it for yourself and leaving without any suggestions to hopefully contribute to your own reading of it.  Download Perkins Coie LLP v. U.S. Dept of Justice Memo. Opinion Doc. 185 filed May 2 2025 (D.D.C. No. 25.716.(BAH)).

      A good place to start I think is how the regime responded to this lawsuit.  They responded pretty much the same way they do everything, which is by blaming other people.  For example, in this case Perkins Coie alleged several different First Amendment Free Speech claims; the regime had issued an executive order requiring all agencies of the federal government basically to shun any dealings with Perkins Coie  --including to bar its lawyers from access to federal buildings, which naturally includes federal courthouses--because of the firm's representation of the regime's political opponents.

      The Court rejected the regime's approach.  (The Court refers throughout this opinion to "the government," meaning the regime.)  "The government's attempt to reframe this case as about governmental speech is subterfuge."  (Memorandum Opinion at p. 35.)

      "The claims that the government seeks to dismiss in this lawsuit challenge the use of governmental power, not governmental speech."  (Id., p. 35.)  "Put another way, plaintiff [Perkins Coie LLP] does not challenge 'what the current Administration thinks about Plaintiff,' Gov't's Mem. at 13, but rather what the current Administration seeks to do to plaintiff based on that thinking."  (Id., p. 36) (emphasis by the Court.)

      As you likely already know, the Court denied the regime's motion to dismiss and granted Perkins Coie's motion for summary judgment for "declaratory and permanent injunctive relief on Counts II through IX of the Amended Complaint."  (Id., p. 102.)

To be continued ....

Please read the disclaimer.  ©2025 Dennis J. Wall.  All rights reserved.  Interested in many things including Claims and Bad Faith Law?  Sign up for a free subscription to my Substack newsletter. 

"When Your Enemies Know What Your Friends Can't Believe."

https://claimsandissues.substack.com/p/when-your-enemies-know-what-your

A NATIONAL LAW DAY REPORT: STIPULATING SECRECY OVER "ADMINISTRATIVE ERROR."

Kilmar Armando Abrego Garcia is the person who was kidnapped in a parking lot in Maryland and spirited off to El Salvador.  There he continues to stay in a prison run by the Salvadoran regime and paid for by the current U.S. regime with your taxes.  Right or wrong, Abrego Garcia's continued stay in El Salvador's most notorious prison is paid for by your tax money.

The U.S. regime says that it was an "administrative error" that led to Mr. Abrego Garcia's being shuffled off to the one place to which he could not be deported, namely El Salvador.  A federal immigration judge had previously entered an order that Abrego Garcia should not be sent to El Salvador because his life is in danger there.

In El Salvador he stays, to this day.

There is now a Stipulated Secrecy Order in that case.  It was entered on April 21, 2025.  Download Abrego Garcia v. Noem Stipulated Protective Order Doc. No. 95 filed April 21 2025 (D. Md. Case No. 8.25.cv.00951.PX).

Time will tell how much, if anything, is made available to public access to the Court file.  Why was he sent to El Salvador?  Who made that decision?  Why is he still there?

To say again, time will tell how much and whether anything will be made available to the public as this federal case proceeds in federal Court, which is also paid for by your taxes.

General questions of public access to Court files are examined in the context of secrecy in Settlements in Bad Faith Cases in 1 DENNIS J. WALL, LITIGATION AND PREVENTION OF INSURER BAD FAITH § 3:107 (Thomson Reuters West 3d Edition, 2025 Supplements in process) (regarding Third-Party cases) and in 2 id. § 9:28 (regarding First-Party cases).  Particular issues of secrecy relating to Insurer Bad Faith cases are discussed in Volume 1, id., §§ 3:107.50-3:107.100 (addressing Third-Party Bad Faith litigation) and in Volume 2, id., §§ 9:28.50-9:28.100 (concerning First-Party Bad Faith lawsuits).

Please read the disclaimer.  ©2025 Dennis J. Wall.  All rights reserved.  Interested in many things including Claims and Bad Faith Law?  Sign up for a free subscription to my Substack newsletter. 

Duty to Indemnify Distinct From Duty to Defend, Coverage Distorted.

In a case involving New York law, the Supreme Court of Delaware highlighted a distinction between the duty to indemnify and the duty to defend that is recognized in most if not all jurisdictions as to a liability carrier's duties to its insureds:

          Although the Insurers' fraud defense required them to prove that Conduent manufactured indemnity coverage through the settlement, the Insurers left the impression at trial that they had no coverage obligations at all.....  The Insurers' duty-to-defend issues and coverage position pre-Settlement had little if anything to do with whether Conduent fraudulently settled the State Action to secure indemnity coverage.  By probing these issues [at trial], the Insurers caused confusion between indemnity coverage and the duty to defend.

AIG Spec. Ins. Co. v. Conduent State Healthcare, LLC, ___ A.3d ___, 2025 WL 369450, at *8 (Del. Feb. 3, 2025)/

Case law on the issues discussed in this post is collected in Volume 1 of the Third Edition of LITIGATION AND PREVENTION OF INSURER BAD FAITH § 3:52 (Thomson Reuters West Publishing Co., with 2025 Supplements in process).

Please read the disclaimer.  ©2025 Dennis J. Wall.  All rights reserved.  Interested in many things including Claims and Bad Faith Law?  Sign up for a free subscription to my Substack newsletter. 

OFF WITH THEIR HEADS!

Or, how dare they question the regime?

Administrative Stay Order.  (Author Photo)

When the regime refused to turn the planes around and return the people it had abducted to a notorious prison in El Salvador, Judge James Boasberg held a Hearing on whether the regime should be held in Contempt of Court.

After the Hearing was over, Judge Boasberg wrote down all the evidence.  He also wrote down all the reasons why he found Probable Cause to hold the regime in Contempt based on all that evidence.  His Order is 46 pages long. He does not seem to have overlooked anything.  Download JGG v. Donald J. Trump Contempt Findings . Memorandum Opinion filed 04.16.25 (D.C.D.C. No. 25-766 (JEB)) 

The regime filed an appeal, of course.

Look at this appeal like an appellate lawyer would, and early on you would find out who your judges are.  Then you would find out all you could about them.

The regime not only filed what they call an emergency appeal, they also filed what they called an emergency motion to stay (or stop) the Contempt proceedings in Judge Boasberg's Court.  (Everything is an emergency with these people.  They don't dare give you time to think.)

Under the D.C. Circuit Court rules, the emergency motion was referred to a special panel to decide it.  The D.C. Circuit rules provide that the special panel can stay with the case and decide it too,  although that would be unusual.

There were three judges on the special panel in this case, which is usual.  Two of the judges voted for an administrative stay, and one did not.  As the two judges stated in their Administrative Stay Order in this case, in the D.C. Circuit Court the purpose of an administrative stay "is to give the court sufficient opportunity to consider the emergency motion[.]"  

The two judges who voted for a stay  are GREGORY KATSAS and NAOMI RAO.

Judge Katsas practiced law at Jones Day.  He moved over to the job of Deputy White House Counsel alongside Don McGahn, who also came from Jones Day.  David Enrich, who wrote a book about Jones Day, wrote that when Gregory Katsas left Jones Day for his new job at the White House in the first round of the regime, that "Greg Katsas received a bonus -- 'at the discretion of the managing partner,' as he explained in a government filing -- that brought his compensation to nearly $4 million for the year."[1] 

Naomi Rao is well-known to everyone who follows the rulings that sometimes come out of her pen when she can get another vote on the D.C. Circuit to make her ruling the Opinion of the Court.  Many of her dissents are just as well-known.

Both Judge Katsas and Judge Rao were nominated by the same man who is the current first-named appellant, the present head of the regime and the co-president (no, not Elon Musk, the other one).

The third judge on the special panel in this case, the judge who did not vote to grant an administrative stay in this case, is CORNELIA "NINA"  PILLARD.  Judge Pillard was nominated by President Obama.  The special panel's Administrative Stay Order reveals that she dissented because she did not think it was proper; in fact, she thought "there is no ground for an administrative stay."

Knowing what you know now, suppose that right now you are sitting with the lawyers representing JGG and the other people who were abducted to El Salvador.  In this case, your lawyers are effectively representing the Judge who found Probable Cause to hold the regime and its leader in contempt of Court.

Suppose further that all you know about your judges on appeal is what I have told you here.  (I guarantee that this is enough to know for purposes of evaluating how they might rule and what arguments to craft that might work best, if at all, which good appellate lawyers have to do in every appeal.)

Do you think that you have a 100% chance of winning this appeal?  OK, probably not.  How about 50-50?  25%?  Lower %?

You make the call.  But wait!  Before you make the call, wait to see if the special panel sticks around to decide the whole case.  If that happens, unusual though it might be, it will likely predict the outcome right then and there.

My call is that the special panel will decide the whole case.  I also predict that Judge Katasa and Judge Rao will go with the regime.  I would not be surprised if their opinion put the blame on Judge Boasberg and on the people who were kidnapped because, after all, Judge Boasberg had the audacity to issue rulings against the regime right there in his Courtroom and all,  and those people who were kidnapped also got in the way standing there on the street or in their homes or wherever.

Whatever their opinion says, my prediction is a 2-to-1 decision in favor of the abductions and against the 46 pages of evidence reviewed by the District Judge when he found Probable Cause to hold the regime and the regime's current leader in contempt of Court.

Please read the disclaimer.  ©2025 Dennis J. Wall.  All rights reserved.  Interested in many things including Claims and Bad Faith Law?  Sign up for a free subscription to my Substack newsletter.

 

[1] DAVID ENRICH. "SERVANTS OF THE DAMNED / Giant Law Firms, Donald Trump, and the Corruption of Justice," p. 242.  I previously referred to Jones Day and Mr. Enrich's book in an article posted here on Good Friday, April 18, 2025.

When Unfair Claims Settlement Practice Violates Consumer Protection Statute.

The Supreme Judicial Court of Massachusetts has found an interplay between an Unfair Claims Settlement Practices Act, on the one hand, and a Consumer Protection Statute, on the other.  In Massachusetts, a violation of Massachusetts General Laws Chapter 176D or the equivalent of an Unfair Claims Settlement Practices Act, is in law the same thing as an "unfair or deceptive act or practice" as that term figures in claims made under a Consumer Protection Statute, Massachusetts General Laws Chapter 93A.[1]  As the Court has held:

          Recovery under G.L. c. 93A for a violation of G. L. c. 176D, § 3 (9), is unlikely when "[a]n insurance company ... in good faith denies a claim of coverage on the basis of a plausible interpretation of its insurance policy."[2]  

[1] McGilloway v. Safety Ins. Co., 468 Mass. 610, 618, 174 N.E.3d 1191, 1199 (Mass. 2021).

[2] McGilloway, 488 Mass. at 618, 174 N.E.3d at 1200.  Accord, Marandino v. Utd. States Fire Ins. Co., No. 23-cv-40072-DJC, 2025 WL 902352, at *6 (D. Mass. March 25, 2025).

Case law on the issues discussed in this article is collected in Volume 1 of the Third Edition of LITIGATION AND PREVENTION OF INSURER BAD FAITH § 3:28 (Thomson Reuters West Publishing Co., with 2025 Supplements in process).

Please read the disclaimer.  ©2025 Dennis J. Wall.  All rights reserved.  Interested in many things including Claims and Bad Faith Law?  Sign up for a free subscription to my Substack newsletter. 

James Uthmeier The Unelected Florida Attorney General.

(Author Photo of the inside book cover)

Jones Day was so famous that a book was written about that huge law firm, SERVANTS OF THE DAMNED, by David Enrich.

One James Uthmeier worked at Jones Day before he took a job advising the Commerce Secretary in the first iteration of the current regime.  (The Secretary of Commerce at the time was a client of Jones Day.)  He is mentioned briefly on page 241 of the book.

As described in the book, one of the things that made Jones Day famous enough to get their own book was writing threatening letters.

James Uthmeier left the Commerce Department and at some point became the Chief of Staff to the Governor of Florida.  When the Florida Attorney General resigned, the governor appointed Mr. Uthmeier to the post.

A relatively recent appointment, Uthmeier has made headlines with at least one letter.  For example, he wrote a letter to the Mayor of Orlando threatening to remove the Mayor from office if Orlando did not follow the immigration laws, among other things.

In context, the Florida governor has already removed two elected officials from public office, both Democrats.  One, the State Attorney who is headquartered in Orlando, ran and won re-election after she was removed from the office.  Mr. Uthmeier has recently made comments about her, but so far apparently only verbal comments and not in writing.

Back to the Mayor of Orlando and the threat to remove him from office if Orlando did not enforce the immigration laws.  The Mayor wrote back immediately after receiving the letter from General Uthmeier to inform Uthmeier that, in essence, Orlando is following all the laws including the immigration laws.

Not content with the Mayor having the last word apparently, Mr. Uthmeier gave a TV interview following the Mayor's letter, and he said that his letter worked and then pretty much repeated as the Mayor had said, that Orlando was following the law.

It would have been interesting to see if the Florida Attorney General would have actually sought the removal of the Mayor of Orlando from office.  But by what authority, General, by what authority?  Perhaps we will never know, but in the meantime, there is the State Attorney who might be removed from office ....

It is Good Friday.  Please read the disclaimer.  ©2025 Dennis J. Wall.  All rights reserved.  Interested in many things including Claims and Bad Faith Law?  Sign up for a free subscription to my Substack newsletter. 

'TO MAKE A REASONABLE OFFER AFTER LIABILITY IS REASONABLY CLEAR.'

In Urban v. Zurich Am. Ins. Co., 752 F. Supp. 3d 310 (D. Mass. 2024), a U.S. District Judge in Massachusetts considered whether the liability insurance carrier defendant had violated Massachusetts statutes by failing to make a reasonable offer after the policyholder’s-insured’s liability had become reasonably clear.

           As to whether the policyholder-insured’s liability was reasonably clear at any point during the underlying claim, this case involved the possibility of a jury finding of comparative negligence.  The Court pointed out that “[w]hile comparative negligence can, in some cases, prevent liability from becoming reasonably clear,” insurance carriers have an obligation to make a reasonable settlement offer, which they cannot avoid “by hiding behind the gamesmanship of anticipated success at trial.”  Urban, 752 F. Supp. 3d at 341.

          As to the reasonableness of the carrier’s offers, the Court noted that under Massachusetts law (as under the law in most if not all U.S. jurisdictions) all insurance carriers are subject to the following legal standard:  “Reasonableness can be measured by looking to the undisputed evidence indicating the damages suffered against the offer tendered.”  Urban, 752 F. Supp. 3d at 344 (emphasis added). 

          The Court in this case awarded double damages against the defendant carrier in the amount of “$2,841,358.26, plus attorneys’ fees” because it failed to make a reasonable offer after the liability of its policyholder-insured had become reasonably clear in the underlying case.  Urban, 752 F. Supp. 3d at 346.

Third-Party Bad Faith case law on the issues discussed in this article is collected in Volume 1 of the Third Edition of LITIGATION AND PREVENTION OF INSURER BAD FAITH § 3:28 (Thomson Reuters West Publishing Co., with 2025 Supplements in process).  First-Party Bad Faith case law on these issues is collected in Volume 2, § 9:14.

Please read the disclaimer.  ©2025 Dennis J. Wall.  All rights reserved.  Interested in many things including Claims and Bad Faith Law?  Sign up for a free subscription to my Substack newsletter. 

 

DÉJÀ VU, ALL OVER AGAIN.

It worked for them before.  The regime notoriously spirited one Mahmoud Khalil out of New York City before a federal judge there could rule in his case.  Then the regime argued that the federal judge had no jurisdiction since Khalil was no longer there.  “The regime's response to Khalil's demand to return him to New York City was to say that the federal Court there has no jurisdiction.”  The Doctrine of Nanny Nanny Boo Poo, posted here on March 18, 2025.

In that case, the federal judge in New York City ultimately agreed.  But that was because Khalil filed a habeas corpus petition.  The Latin basically means, “deliver the body,” and the federal judge in New York City ruled that if there was no body in New York City, then he did not have jurisdiction in a habeas case.

That’s not what happened in the case of Kilmar Abrego Garcia.  The regime took Abrego Garcia to prison in the Salvador gulag, outside of the United States, where his life is undeniably in danger.  An immigration judge ordered years ago that Abrego Garcia’s life was in danger if he was sent to El Salvador, and that as a result he should not be sent there.

The regime admitted that their abduction of Abrego Garcia was a mistake and they should not have done that to him.  Moreover, Abrego Garcia’s lawsuit was not a habeas corpus petition since he had already been removed from the U.S.  Instead, he alleged that the regime violated his Constitutional rights in sending him out of the country to prison in El Salvador.    See  Download Abrego Garcia v. Noem Complaint Doc. No. 1 filed March 24 2025 (D. Md. Case No. 8.25.cv.00951.PX) and Download Abrego Garcia v. Noem P's Emer. M. TRO Doc. No. 2 filed March 24 2025 (D. Md. Case No. 8.25.cv.00951.PX).

So what could the regime’s lawyers do to make this case like Khalil’s?  Through a lawyer, they declared that Abrego Garcia’s case was really a habeas corpus case and, as in Khalil’s case, the federal court would not have jurisdiction. 

The regime added one further thought.  They argued that since Abrego Garcia had actually been removed from the country, that a United States District Court had no jurisdiction over his case and the Court could not order the regime to return him to this country.  A lawyer actually wrote that, and the regime actually said that.  See Download Abrego Garcia v. Noem Ds Opp. Memo. to P's Em.M.TRO Doc. 11 filed March 31 2025 (D. Md. Case No. 8.25.cv.00951.PX).

The U.S. District Judge in this case, Judge Paula Xinis, disagreed.  She denied Abrego Garcia’s first try at a Temporary Restraining Order, but she ruled in his favor on his second try, when he filed what the Judge called a Motion for Preliminary Injunction.  She granted his motion and also ordered the regime to return him to this country.  Download Abrego Garcia v. Noem Order Granting Prelim. Injunction (D M.Stay) Doc. 21 filed April 4 2025 (D. Md. Case No. 8.25.cv.00951.PX) and Download Abrego Garcia v. Noem Memorandum Opinion (D M.Stay) Doc. 31 filed April 6 2025 (D. Md. Case No. 8.25.cv.00951.PX)

The regime has now appealed to the Fourth Circuit Court of Appeals, where I understand that they have filed an emergency motion to stay the District Judge’s Order.  (Why might there be an emergency you ask?  There isn’t any emergency that I can see.)

Ordinarily, a motion for a stay on appeal, emergency or otherwise, would go to a panel of Fourth Circuit judges but there is a way to circumvent that normal process.  I will go into it later if it turns out that the regime is trying it, but I do not wish to give them ideas.

But that will not stop me from making a prediction for you about the ultimate success of the regime’s appeal in this case:  I think that the Fourth Circuit will reverse the District Judge and hold that although mistakes were made, it is not the regime’s fault, i.e., the regime does not have to take him out of harm’s way by removing him from the Salvadoran death-trap of a prison to which they mistakenly sent him.

I make this prediction because I do not think that many judges on the Fourth Circuit Court of Appeals have the stomach to order the regime to do something that the regime may refuse to do.  It may be that there are not many judges, federal or State, who have the stomach for the regime to defy their orders.  Whatever would they do in that event?  Rather than force the issue, I predict that they will side-step it completely.

They will rule that Abrego Garcia must stay in the prison in El Salvador without forcing the regime to obey the District Court.

At least for now.

Perhaps forever.

Time will tell.

Please read the disclaimer.  ©2025 Dennis J. Wall.  All rights reserved.  Interested in many things including Claims and Bad Faith Law?  Sign up for a free subscription to my Substack newsletter. 

 

Last Thursday ICE abducted a person who was standing trial.

(oneag news agency; Wikimedia Commons)

 

The person, Wilson Martell-Lebron, was on trial for providing false information on an application for a license. He was on trial for a crime.

On the first day of his criminal trial in Boston Municipal Court, Martell-Lebron was abducted by ICE. ICE says that he is from the Dominican and that he was in the U.S. without sufficient documentation. I understand that this is a civil offense, not a crime.

The criminal trial judge, Judge Mark Summerville, conducted an inquiry. He reportedly heard testimony about the incident from the Assistant District Attorney last Friday, testimony which finished up on Monday of this week.

Judge Summerville found that ICE premeditated their obstruction of justice in this criminal case. He further found ICE agent Brian Sullivan responsible, that Sullivan "conspired in a premeditated manner" to obstruct justice by abducting Martell-Lebron, and that Sullivan was a member of the prosecutorial team (at least for purposes of this issue).

Judge Summerville further found that ICE agent Sullivan "intentionally" and "egregiously" deprived Martell-Lebron of Constitutional rights, and that ICE and Sullivan have no intention of returning Martell-Lebron to resume his criminal trial.

The judge was quoted in reports as saying that "I find that this court cannot trust ICE to return the defendant back to court. I don't find that they're credible. I have no confidence in ICE no matter what they told the Commonwealth, that they would ever bring this defendant into court."

Following this inquiry, the judge found Sullivan in contempt.

The judge also dismissed the criminal charges against Wilson Martell-Lebron for prosecutorial misconduct.

So far, I have seen four of these videos filmed during three abductions which are becoming commonplace. ICE agents abduct someone and bundle them into a waiting black SUV. (I assume that they are agents from ICE because that is what they say, but who knows the truth of who they work for?)

It has not been reported so far as I know, but it is not hard to pick up a pattern from these kidnapping videos: There are always 6 people involved in the abduction, all of them always in plain clothes, they use handcuffs, and they are often but not always masked.

The person they abduct is always alone.

So, in this case, if the judge had wanted to, there seems to have been enough legally sufficient evidence to warrant finding 6 "agents" in contempt, without stopping just at Sullivan.

Back to Mr. Martell-Lebron's abduction and his criminal trial that was scheduled to start in Judge Summerville's courtroom last Thursday. I look at this situation from the standpoint of the people who were in that courtroom. There was the judge, the defense attorney, and the prosecutor. For some reason I do not know, reportedly there were also two Massachusetts State Troopers there.

The judge and the defense attorney apparently had no inkling that ICE was waiting to seize Martell-Lebron. The Assistant District Attorney did not know that ICE would seize the defendant during trial, the judge found.

The question becomes whether anyone associated with this incident knew that ICE was planning to abduct the defendant as soon as the trial concluded.  The reporting is unclear although one of the State Troopers reportedly testified last Friday that Ice Agent Sullivan told him and the prosecutor that ICE planned to abduct the defendant, apparently on the first day of trial.

A statement by a spokesperson for the Massachusetts State Troopers offered that the State Troopers followed the department’s policy of not speaking about ICE plans if they know what ICE is going to do.

Whatever anyone knew about ICE plans for Mr. Martell-Lebron, they apparently did not tell either the judge or the defense attorney.

• The judge, who is very likely to deal with the two State Troopers in future cases, has seen with his own eyes and heard with his own ears that the loyalties of these two State Troopers probably do not lie with him or his Court, or with Massachusetts and its laws. If they were, they would have told the judge what ICE was planning to do if they knew it in advance.  The judge reportedly said as much himself in the Hearing.
• Returning to that statement by a spokesperson for the State Police, this apparently was supposed to exonerate the two State Troopers involved in this situation because the Troopers supposedly neither stopped ICE or helped ICE. I call BS. They helped ICE by staying silent. That is what they wanted to do; we know that because that is what they did.

Think on this as well. ICE and its masters have made it pretty clear that they have no respect for persons they find on the street or in their homes including on Thursday of last week in Massachusetts.

And think on this: ICE and its masters showed clearly and beyond any reasonable doubt on Monday that they have no respect for judges, the United States, or the law.

Please read the disclaimer.  ©2025 Dennis J. Wall.  All rights reserved.  Interested in many things including Claims and Bad Faith Law?  Sign up for a free subscription to my Substack newsletter. 

DEMAND FOR A DEMAND IS NOT BAD FAITH IN SETTLEMENT.

The case of  Jimenez v. GEICO Secure Ins. Co., 730 F. Supp. 3d 1091 (Nev. 2024) resulted in the publication of a decision which seems to have been willfully misinterpreted in the literature or perhaps it simply was not read beyond the headnotes.  In Jimenez, a U.S. District Judge considered the decision in an earlier case,  Chowning v. Nationwide, which was decided by a magistrate judge in Nevada a year earlier.  The cite for the magistrate judge's decision is Chowning v. Nationwide Ins. Co. of Am., No. 22-cv-00798-CDS-EJY, 2023 WL 2971435 (D. Nev. 2023) (USMJ).

 As the Jimenez Court wrote, “GEICO argues that I should follow Chowning, which held that a [statutory unfair claims settlement practices] claim was futile without a settlement demand from the injured party.”  Jimenez, 730 F. Supp. 3d at 1096.  But the Jimenez Court disagreed.  The district judge in that case did not find the decision by a magistrate judge in Chowning to be “controlling law”:

    The Supreme Court of Nevada has not decided the precise question of whether a settlement demand from the claimant is a prerequisite to an insurance bad faith claim. See Chowning, 2023 WL 2971435, at *6. Neither party cites controlling law on this point.

Jimenez, 730 F. Supp. 3d at 1095 (emphasis added).

Nevada law was involved in the Jimenez case and the Jimenez Court applied Nevada Supreme Court decisions which establish that a liability carrier generally cannot be held liable for its alleged bad faith in settlement regardless of whether there has been a settlement demand or not, if it “’has no opportunity to settle within policy limits .…'   Or, if settlement is possible beyond policy limits, … that the insured would be willing to contribute the excess amount.”  Jimenez, 730 F. Supp. 3d at 1095, quoting Allstate Ins. Co. v. Miller, 125 Nev. 300, 315, 212 P.3d 318, 328 (2009) (en banc) (emphasis added).

Applying the Nevada law of bad faith, as interpreted by the Nevada Supreme Court and followed in the Jimenez case, the policyholder’s complaint at issue failed in its claim of bad faith in settlement because it did not contain any allegation that the defendant carrier had “an opportunity to settle, either within policy limits or outside of policy limits with Jimenez’s contributions.”  Jimenez, 703 F. Supp. 3d at 1096.

Without an allegation that the defendant carrier had an opportunity to settle, both the common law claim of bad faith and the statutory claim of bad faith failed, and for that reason both of these claims were dismissed.   Jimenez, 730 F. Supp. 3d at 1096.

The Jimenez decision is thoughtful and researched.  Not once did the Jimenez Court write that a demand (or offer) is necessary to a viable claim of bad faith in settlement; what Nevada law requires is what all modern jurisdictions require, which is an opportunity for the liability carrier “to settle within policy limits or in excess of policy limits with contribution” from the bad-faith plaintiff.  Jimenez, 730 F. Supp. 3d at 1096.

Please read the disclaimer.  ©2025 Dennis J. Wall.  All rights reserved.  Interested in many things including Claims and Bad Faith Law?  Sign up for a free subscription to my Substack newsletter. 

Whether 'tis Nobler to Staff Healthcare Facilities, ...

... or Take the Money and Run?

One week ago, in an article posted here, staffing standards for nurses at Nursing Homes was explored with a look at an ongoing case in Private Equity Strikes Back, posted here on March 21, 2025.

Standards at healthcare facilities continue to be of interest here, just as they are of interest to most people in the United States. 

To be sure, cases go to trial on allegations involving inadequate staffing at healthcare facilities for which private equity may or may not be responsible.  In Estate of Shea v. Meridian Senior Living, LLC,[1] the estates and relatives of deceased residents of an assisted living facility managed by Meridian Senior Living, LLC filed suit against Meridian on account of the residents' deaths.  The case went to verdict on counts for alleged negligence and alleged violation of the Wisconsin Deceptive Trade Practices Act.

A jury returned a verdict for the plaintiffs based on allegations of inadequate staffing and false advertising. The trial court entered judgment for the plaintiffs which was affirmed.[2]

[1] Estate of Shea v. Meridian Senior Living, LLC, No. 2023AP1462, 2025 WL 18229 (Wis. Ct. App. Jan. 2, 2025).

[2] The essential facts supporting the verdict and judgment are outlined by the Wisconsin Court of Appeals in Meridian Senior Living, 2025 WL 18229, at ¶¶ 1-39, at pages *1-*10.  For reasons unknown, when this opinion was initially issued, the appellate panel wrote that "[t]his opinion will not be published," Meridian Senior Living, 2025 WL 18229, ¶ 60, at page *14, although the caption bears a NOTICE that a final publication decision is pending.

 

Case law on these issues is set out in § 18C:6.50, Private Equity and Medicare, in Volume 2 of CATASTROPHE CLAIMS / INSURANCE COVERAGE FOR NATURAL AND MAN-MADE DISASTERS (Thomson Reuters November 2024 Edition, 2025 Supplements in process).

Please read the disclaimer.  ©2025 Dennis J. Wall.  All rights reserved.  Interested in many things including Claims and Bad Faith Law?  Sign up for a free subscription to my Substack newsletter. 

Good Faith or Bad Faith: Your Choice.

We are moving into an era that represents a rejection of the defense establishment, Social Security and Medicare and Medicaid, the environmental protection establishment, and on and on.  There are ways to improve the cast and the script in good faith, if you will, and there are also ways to rewrite the story in bad faith.  The choice is ours, not theirs.

As was said in a different but related context:

We are moving into an era that represents a rejection of the public health establishment.  Change is coming, but not all change is good change.  We need to have honest discussions about what went right and wrong with a focus on learning how to do better next time, not rewriting what happened.[1]

[1] Katelyn Jetelina and Kristen Panthagani, HHS Picks, the House Subcommittee Report, and Pandemic Revisionism, Your Local Epidemiologist (Substack Newsletter, Dec. 4, 2024), https://substack.com/@yourlocalepidemiologist/p-152518123.

Issues like this are discussed in § 18C:16, The Man-Made Catastrophe From Taking Medicare Away From Those That Rely on the Program, 2 CATASTROPHE CLAIMS / INSURANCE COVERAGE FOR NATURAL AND MAN-MADE DISASTERS (Thomson Reuters November 2024 Edition, 2025 Supplements in process).

Please read the disclaimer.  ©2025 Dennis J. Wall.  All rights reserved.  Interested in many things including Claims and Bad Faith Law?  Sign up for a free subscription to my Substack newsletter. 

Antitrust Scrutiny Through Private Litigation.

Antitrust scrutiny is sometimes provided by the filing of private litigation.  Given the current state of affairs in Washington, D.C., this is likely to become the preferred option for some time to come.

On August 1, 2024, many lawsuits against Multiplan, Inc. were consolidated in a Multidistrict Litigation because they "share factual questions arising from an alleged conspiracy to fix, suppress, and stabilize reimbursement rates paid to healthcare providers for out-of-network healthcare services in the U.S. in violation of the Sherman Act."  In re:  Multiplan Health Ins. Provider Litig., 743 F. Supp. 3d 1376, 1377, MDL No. 3121, 2024 WL 3629070, at *1 (J.P.M.L. Aug. 1, 2024).  

Case law addressing the issues in this case is set out in § 18C:6.50, titled Private Equity and Medicare, in Volume 2 of CATASTROPHE CLAIMS / INSURANCE COVERAGE FOR NATURAL AND MAN-MADE DISASTERS (Thomson Reuters November 2024 Edition, 2025 Supplements in process).

Please read the disclaimer.  ©2025 Dennis J. Wall.  All rights reserved.  Interested in many things including Claims and Bad Faith Law?  Sign up for a free subscription to my Substack newsletter.