Bad Faith Blog

Summary: The Netherlands Insurance Company provided insurance coverage to three corporate entities for which David Edens was the Chief Executive Officer. David and Rhonda Edens were the parents of Zachery who was a motorcyclist killed when an oncoming car turned into his path. The Oklahoma U.S. District Court found there was no UIM/UM coverage, found there could be no bad faith claim prosecuted in the absence of coverage, and entered summary judgment in favor of The Netherlands Insurance Company. The 10th Circuit affirmed on appeal.

Summary: Green Earth, the operator of a Colorado Springs retail medical marijuana business and growing facility submitted a claim to its insurer for a wildfire-caused smoke and ash damage and a separate break in and theft. Atain denied the claims on multiple grounds which caused Green Earth to sue Atain for breach of contract and statutory claims for bad faith and unreasonable delays in payment. The District Court was confronted with numerous motions addressing what was and was not covered under the policy issued to Green Earth and whether Green Earth’s bad faith and delayed payment claims were sustainable. After reviewing the coverage issues at length, the Court granted summary judgment to Atain on Green Earth’s bad faith and unreasonable delay in payment claims regarding the theft, but questions of fact regarding parts of the wildfire claim and Green Earth’s related statutory claims for bad faith and unreasonable delay in payment precluded summary judgment.

Summary: A severe flood struck Cedar Rapids, Iowa in 2008, damaging the insured’s manufacturing facility and impacting its business operations, leading to claims of property damages exceeding $35 million and business interruption losses exceeding $26 million. Two insurers equally shared responsibility for payment of claims under the same insurance policy. They paid only $20 million, contending the policy’s flood sublimits had been reached. The insured then filed a first-party claim for breach of contract and bad faith. After the insured rested its case at trial, the U.S. District Court for the Northern District of Iowa directed a verdict against the insured on the bad faith claim. Then after the insurers rested their case, they won a directed verdict on the breach of contract claim. The Eighth Circuit affirmed.