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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
January 29, 2017

Release Inflexibility Leads to Multi-Million Dollar Stipulated Judgment and Bad Faith Liability

Summary: Mercury Casualty provided auto liability insurance coverage with limits of $15,000/$30,000 to insured driver McDaniel who, while intoxicated, ran into and seriously injured two pedestrians. Mercury investigated, offered its policy limits, and allowed the claimants’ attorney to investigate McDaniel’s assets, but balked at language plaintiffs’ attorney added to the release to account for “court-ordered restitution.” After a stipulated judgment of $3 million against McDaniel, the pedestrians sued for breach of contract and common law bad faith, which resulted in a $3 million judgment plus interest and costs in their favor. The California Court of Appeal affirmed the judgment.

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
June 29, 2011

Federal Court Rules Against Bad Faith “Set Up”

Summary: Applying Florida law, the Federal District Court found the insurer did not act in bad faith or delay tender of the policy limits when it conducted a reasonable investigation into plaintiff’s injuries. Instead, the District Court found it was plaintiff who caused the delay by failing to comply with the insurer’s reasonable requests for medical records.