A building project in Florida drew arguments for applying the law of Illinois, Iowa or Florida on various issues in Download Weitz Co. v. Lloyd's of London (8th Cir. Opinion Filed August 4, 2009). The Eighth Circuit Court of Appeals reversed the Trial Court's Summary Judgment entered in favor of four Insurance Carriers. The Insurance Policies at issue were "All Risks" Property Insurance Policies containing "Builders Risk" Coverage. The Policies were issued to one Hyatt, which hired the Plaintiff, Weitz Company, as the general contractor. There was water damage, which the general contractor remedied. Weitz sent Hyatt the bill for the remediation.
On remand, the first thing that the District Judge was instructed to do, was determine which State's law applies to the First-Party Bad Faith Claims against all the Carriers resulting from the alleged denials of all their Coverages. Download Weitz Co. v. Lloyd's of London (8th Cir. Opinion Filed August 4, 2009), attached Official Opinion at 10.
If, as appeared likely, Iowa law applies to the Bad Faith Claims against Lloyd's, Lexington Insurance, Continental Casualty, and United States Fire, the Eighth Circuit held that the District Court applied the wrong legal standard to the facts at bar. Under Iowa substantive law coupled with Federal procedure applicable to a summary judgment motion, what constitutes objectively reasonable conduct (and thus not First-Party Bad Faith) must in this case be viewed most favorably to Weitz; i.e., the facts and inferences appearing from the evidence in the record must be viewed in the light most favorable to the Policyholder or, as in the case of Weitz, the one who is Plaintiff standing in the shoes of the Policyholder alleging unreasonable, Bad Faith denial of Insurance Coverage. See Download Weitz Co. v. Lloyd's of London (8th Cir. Opinion Filed August 4, 2009), attached Official Opinion at 10-11. See also Dennis J. Wall, "Litigation and Prevention of Insurer Bad Faith" ยงยง 9:12, 11:17 (2d Edition Shepard's/McGraw-Hill; 2009 Supplement in process, West Publishing).
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