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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
March 12, 2017

Insurer Must Know When It Owes (or Say Why It Shouldn’t)

An insurer is required to know the law, and to fulfill any obligations that would exist even in its “least coverage” scenario. The Louisiana Court of Appeal found an insurer committed bad faith by failing to pay a statutorily-mandated amount despite pending litigation involving the matter that could result in reimbursement in excess of that amount. The Court required the insurer to pay the minimum due first, unless there exists a legitimate concern the statutory minimum is not owed at all. The fact that more might be owed does not amount to such a concern.

Bad Faith Blog
July 31, 2016

New York’s Highest Court Applies Ohio’s Bad Faith Law

Summary: The New York Court of Appeals affirmed the trial court’s denial of Seneca Specialty Insurance Company’s (“Seneca Specialty”) motion to dismiss. Seneca Specialty relied upon New York’s restrictive bad faith requirements for this commercial property loss even though the insured’s building was located in Ohio. The prevailing conflicts of law rule provides that whenever the insured risk is located entirely within one state, that state’s law will control the litigation.

Bad Faith Blog
June 2, 2016

No Bad Faith by Settling Unconstitutional Strip Search Cases Requiring the Insured to Fund the Settlement

Summary: The County unconstitutionally strip searched multiple arrestees between 1999 and 2002. Recognizing the defenseless nature of the case, Selective Insurance Company of America (Selective) and retained counsel, settled the case, funded the settlement, and then sued the County to recover the multiple deductibles paid. The courts below determined the County owed a deductible paid on its behalf, assessed all defense costs and fees to one plaintiff, and rejected the County’s bad faith claim. The highest court in New York affirmed.

Bad Faith Blog
April 29, 2016

Attorneys’ Bad Faith Prosecution of Bad Faith Claims Warrants Sanctions

Summary: Federal law provides for the imposition of sanctions against attorneys who unreasonably and vexatiously cause an opponent to incur excess costs and fees. A bad faith finding is required to impose those sanctions. In the Nielsen case, the plaintiff’s attorney filed a lengthy complaint alleging eleven causes of action and that ERISA did not apply to a case which was obviously an ERISA case. Two counts were for insurance bad faith and violations of Washington’s Insurance Fair Conduct Act (IFCA). After multiple dismissals, Unum filed a motion for summary judgment attacking the alleged insurance bad faith and IFCA violations. Plaintiff’s attorney filed a “non-opposition.” In light of that non-opposition the court granted the partial summary judgment and dismissed all remaining non-ERISA claims.

Bad Faith Blog
July 23, 2015

Curing the Title Defect Through Litigation Defeated Bad Faith Claims

Summary: DAFCO, LLC, the insured, filed suit against Stewart alleging bad faith. The Supreme Court of Idaho affirmed the Idaho District Court’s granting of Stewart’s Motion for Summary Judgment for fulfilling its contractual duties in good faith while also denying DAFCO’s motion to file an amended complaint to add multiple claims, including an amended breach of the duty of good faith claim.