Bad Faith Blog

The Georgia Court of Appeals affirmed summary judgment for GEICO and held that there was no evidence of a frivolous and unfounded refusal to pay its insured’s demand for the $25,000.00 limit of her underinsured motorist policy, which was needed to support a bad faith claim brought under Ga. Code Ann. § 33-7-11(j) (failure to pay within sixty days of demand). The court found that GEICO timely and thoroughly investigated the claim upon receipt of the demand letter. A later jury verdict against the underinsured motorist greatly exceeding the $25,000.00 policy limit alone was insufficient to establish that an insurer acted in bad faith.

Summary: American Family insured William and Joyce Davis, Jennifer Hansen’s parents, and named the Davises on the declarations sheet. Hansen was injured in an auto accident, settled her claim, and presented an underinsured motorist (UIM) claim to American Family. American Family denied coverage and Hansen filed claims for breach of contract, common law bad faith, and statutory bad faith. After the breach of contract claim was resolved, the common law and statutory bad faith claims were tried. A verdict for American Family was returned on the common law bad faith, but a verdict was returned for Hansen on the statutory bad faith claim finding American Family “had delayed or denied payment without a reasonable basis,” and further finding the damages were $0 for the delayed or denied payment. The trial court awarded Hansen her attorney fees, costs, and entered a $150,000 penalty, two times the covered UIM benefit. The Court of Appeals affirmed, but the Supreme Court of Colorado reversed.

Summary: American Standard’s overall good faith handling of passenger Wahlert’s UIM claim entitled it to summary judgment on the common law bad faith claim and most statutory bad faith contentions. However, its delay in offering to settle for its case valuation amount presented triable issues for a jury.

Summary: Insured motorist and his wife brought action against their insurer seeking underinsured motorist (UIM) benefits. After the trial court entered judgment in favor of the insureds, the insurer appealed. The appeals court affirmed but denied the insureds’ motion for appellate attorney’s fees. The appeals court, sitting en banc, granted the insureds’ motion for re-hearing on the denial of appellate attorney’s fees. The court of appeals held it could not enter a conditional judgment awarding appellate attorney’s fees contingent on the insureds subsequently prevailing on a bad faith claim.