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.
We cover current issues, highlights and best practices exclusively on claims of bad faith and extra contractual damages.
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: State Auto sued Hargis contending she intentionally set fire to her house. She counterclaimed with common law and statutory bad faith claims. State Auto thereafter amended its Complaint alleging damages for insurance fraud as well as a common law claim for reverse bad faith. The district court granted Summary Judgment allowing the insurance fraud claim, but denied the claim for reverse bad faith. The Sixth Circuit affirmed that ruling predicting Kentucky would not recognize a common law tort claim for reverse bad faith.