Bad Faith Blog

Dippin’ Dots wanted coverage for spoliation of its ice cream that resulted from a power outage. Travelers denied coverage and Dippin’ Dots sued Travelers for both the $750,000 value of the spoiled ice cream and for bad faith based on Travelers’ handling of this property damage claim. Dippin’ Dots, LLC v. Travelers Property Casualty Co. of America Travelers moved to bifurcate the trial of the liability and first party bad faith counts, and the Court granted Travelers’ request finding that judicial economy would be advanced by the bifurcation.

Anastasia Fortson-Kemmerer (“Plaintiff”) sued Allstate Insurance Company (“Allstate”) to recover for bad faith and violation of the Insurance Fair Conduct Act (“IFCA”) for its actions when investigating her underinsured motorist (“UIM”) coverage claim. Allstate moved for summary judgment on the affirmative defense that Plaintiff’s previous action to enforce her UIM policy provisions operated as res judicata and barred her bad faith claim. The trial court granted summary judgment and Plaintiff appealed. The Washington Court of Appeals reversed, stating Allstate failed to demonstrate the operation of res judicata.

Summary: Lamar Ragland sued State Farm Mutual Automobile Insurance Company (State Farm) for State Farm’s alleged bad faith in failing to pay an underinsured motorist (UIM) claim. Ragland was injured in an automobile accident by an underinsured motorist in January 2012 and claimed that he was entitled to UIM benefits from State Farm for the same amount he could collect from the motorist. Two separate complaints were filed and then consolidated. The circuit court dismissed the bad faith claim. Ragland appealed. The Supreme Court of Alabama remanded to the circuit court which ruled the bad faith claim was final and appealable pursuant to Rule 54(b). State Farm moved to dismiss, claiming the circuit court had exceeded its discretion. The Supreme Court agreed and dismissed Ragland’s appeal as taken from a nonfinal judgment.

Summary: A head-on collision between two vehicles killed all three occupants of the at-fault vehicle and severe injuries to Steven Bass (Bass), the sole occupant of the other vehicle, which was owned by Bass’ employer and covered by $1 million in underinsured motorist (UIM) benefits through Farm Bureau Financial Services (Farm Bureau). After receiving $20,000 from the at-fault driver’s insurer under a $25,000 per person, $50,000 per accident policy, Bass’ attorney demanded Farm Bureau’s UIM policy limits of $1,000,000.