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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
April 27, 2017

Florida Consent Judgment Was Negotiated in Bad Faith

The Eleventh Circuit considered whether the insurer was bound by a settlement agreement between a homeowner’s association insured and a homeowner, settling the homeowner’s claim for attorneys’ fees by stipulating the homeowner would not enforce the resulting consent judgment against the homeowner’s association. The Eleventh Circuit found these Florida Coblentz Agreements unenforceable against insurers if tainted with fraud or collusion. There was substantial evidence to support the district court’s bench trial determination the negotiations were conducted in bad faith. Therefore, the Eleventh Circuit affirmed the district court’s Judgment that the settlement agreement could not be enforced against the insurer.

Bad Faith Blog
December 29, 2015

New Jersey Rejects Strict Liability Standard for Bad Faith

Summary: New Jersey Manufacturers Insurance Company (“NJM”) appealed the ruling that it breached its duty of good faith by failing to settle a claim against its insured which was within its policy limits. The New Jersey Superior Court, Appellate Division, applied the reasonableness standard in assessing whether the claim for bad faith was proper.

Bad Faith Blog
June 25, 2015

Issues Regarding Good Faith and Reasonableness of Stipulated Judgment Remain

Summary: Lasorte brought suit against Certain Underwriters at Lloyd’s seeking payment on a stipulated judgment agreed to by Lasorte’s employer (the insured) after Lloyd’s refused to defend the employer. After Lloyd’s moved for summary judgment, the United States District Court warned that partial summary judgment in favor of Lasorte was likely regarding Lloyd’s liability, but not damages. Even if Lloyd’s had breached its duty to defend, Lasorte had to prove that the stipulated judgment was reasonable and entered into with good faith.

Bad Faith Blog
October 21, 2013

No Bad Faith Claim – No Problem Says Missouri Supreme Court

The Missouri Supreme Court affirmed the judgment against a liability insurer for extra-contractual damages in a declaratory judgment action originally filed by the insurer to determine coverage and defense obligations. The insurer was not allowed to challenge the reasonableness of its insured’s court-approved settlement and the judgment entered against the insurer for extra-contractual damages was upheld despite there being no bad faith claim asserted in the declaratory judgment action filed by the insurer.

Bad Faith Blog
March 5, 2012

What a Mess!—Insurer Has No Right to Jury Trial to Determine if Settlement Between Its Insured and Claimant Was Reasonable

Summary: After the insurer denied a settlement demand for the $2 million policy limits, the insured, a plumbing contractor, and the land owner plaintiff (“claimant”) reached a settlement agreement for approximately $3.75 million. The trial court judge determined that the settlement was reasonable. The insurer appealed arguing it had a right to a jury trial on the issues of reasonableness and that the reasonableness finding was supported by substantial evidence. The appeals court affirmed.