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Bad Faith Blog

We cover current issues, highlights and best practices exclusively on claims of bad faith and extra contractual damages.

Bad Faith Blog
November 12, 2017

Insurer’s Conduct in Investigating and Settling Claim against Insured Did Not Constitute Bad Faith

The West Virginia Supreme Court of Appeals found an insurer, who defended and settled claims brought by downhill homeowners against its insured, a residential construction company, was not liable for first party common law bad faith or statutory bad faith as a matter of law. State ex rel. State Auto Property Insurance Companies v. Stucky, -- S.E.2d -- , No. 17-0257, 2017 WL 4582607 (W.Va. Ct. Oct. 10, 2017) State Auto Property Insurance Companies (“State Auto”) issued a CGL policy to its insured, CMD Plus, Inc. (“CMD”), a residential construction company, with $1 million in policy limits. CMD contracted to build a custom home on a parcel of property uphill from and adjacent to property owned by Barry and Ann Evans (“Plaintiffs”).

Bad Faith Blog
October 9, 2016

Florida Jury’s Verdict 130 Times the Policy Limits, But No Bad Faith

Summary: Liberty Insurance insured Lisa Mottsey had loaned her car to her daughter who in turn let her boyfriend drive. While driving down a county road Mottsey’s car was passed by Zisa driving at a “reasonable speed.” Zisa struck three pedestrians walking side-by-side down a dark county road wearing dark clothes without any illumination resulting in two deaths and one serious injury. Mottsey had limits of $10,000 per person and $20,000 per occurrence. After a $1.3 million jury verdict was returned against Mottsey’s driver and the passing driver assessing 38 percent of the responsibility to Mottsey’s driver, Mottsey’s bad faith claim was assigned to the estate of the plaintiff who pursued a Powell claim against Liberty. The federal court judge granted summary judgment in favor of Liberty.

Bad Faith Blog
January 6, 2016

Arkansas Supreme Court: Third Party Excess Liability Claim Lies Only in Tort

Summary: Ethel Nelson’s car struck Mary Busby on June 10, 1964 after Busby stepped onto the street. Nelson had an automobile insurance policy from Tri-State Insurance Company with a policy limit of $10,000. Busby made two settlement offers within the policy limits, but Tri-State refused both. At trial, the jury apportioned fault between Busby and Nelson and ultimately awarded Busby a total of $16,250, $13,000 to Busby herself and $3,250 to her husband (the first judgment). Nelson’s insurer, Tri-State, paid only the $10,000 policy limit.