Appeals court upholds ruling for insurers in bad faith litigation
- July 19, 2025
- Posted by: Web workers
- Category: Finance
A federal appeals court Wednesday affirmed the dismissal of bad faith litigation filed against Hannover Re and American International Group Inc. units in connection with a $54 million arbitration award.
The 11th U.S. Circuit Court of Appeals in Atlanta issued a one-page ruling affirming the dismissal of the case filed against Hannover Re unit HDI Global Specialty SE and AIG unit National Union Fire Insurance Co. of Pittsburgh, PA, by Newark, New Jersey-based PF Holdings LLC and New York-based Schoolhouse Road Estates Inc. The case is HDI Global Specialty SE, f.k.a. International Insurance Co. of Hannover SE v. PF Holdings LLC, et al., v. National Union Fire Insurance Co. of Pittsburgh, PA.
HDI was the primary insurer, while AIG issued an excess policy.
The 11th Circuit said it was affirming a May 2022 ruling by the U.S. District Court in Columbus, Georgia, on the basis of the lower court’s “well-reasoned and thorough opinion.”
According to the district court’s opinion, in the underlying litigation, two residents of an apartment complex sued four entities that owned, ran, managed and controlled the complex, which provided housing for disabled and elderly individuals. According to a news report, the complex is in Columbus.
The plaintiffs alleged poor living conditions, including that their apartments lacked heat in the winter and air conditioning in the summer; they suffered from roach and bed bug infestations; and that they were displaced from their apartments for several days one winter when the complex’s heat and hot water failed.
The litigation led to the arbitration award, and PF Holdings and Schoolhouse sued the insurers. The district court ruled in the insurers’ favor, holding, among other issues, that they had no duty to indemnify the insureds for the arbitration judgment because the policyholders had “breached their duty to cooperate and not to undertake an obligation without the insurers’ consent.”
Attorneys in the case did not respond to requests for comment.
