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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
February 18, 2021

Stacy v. The Bar Plan Ins. Co.: Summary Judgment for the Insurer

The Missouri Court of Appeals, Eastern District, found the word “related” in a professional liability insurance policy’s limits of liability provision is unambiguous and a reasonable attorney would understand multiple acts of negligence in the course of representing clients in their personal injury claims arising from a single motor vehicle accident are “a series of related acts or omissions.” Accordingly, the Court of Appeals held demands by the attorney’s former clients constitute a single claim under the policy. Further, because limits of liability are not waivable and do not preclude defenses to coverage as a matter of law, the insurer was not estopped from asserting the policy’s limits of liability when it informed the attorney it considered the malpractice claims to be a single claim under the policy. And because of the attorney’s execution of an agreement pursuant to R.S.Mo. § 537.065 with his former clients was without the insurer’s consent, the attorney violated the policy’s cooperation clause and prevented the insurer from controlling the litigation, such that the insurer was not bound by the underlying judgment and was entitled to summary judgment in the resulting equitable garnishment action. 

Bad Faith Blog
April 13, 2017

Eleventh Circuit Sorts Out “Mess” Involving Consent To Settle and Florida Sovereign Immunity Statute

Summary: The insured, a county in Florida, and personal representative of deceased accident victim’s estate brought a declaratory judgment action against the County’s excess insurer seeking a declaration the County was allowed to settle the personal representative’s underlying wrongful death claim without the excess insurer’s consent and without the Florida legislature passing a special claims bill. The Eleventh Circuit, affirmed in part, vacated in part, and remanded the district court’s decision. The Eleventh Circuit found the frustration of purpose doctrine did not apply to allow the insured County to satisfy its self-insured retention limit, which exceeded the statutory sovereign immunity cap. Also, the sovereign immunity statute did not allow the insured County to settle the claim without the insurer’s consent given the language in the excess insurance policy. Finally, fact issues precluded summary judgment whether the excess insurer acted in bad faith in refusing to consent to the insured County’s proposed settlement with the personal representative in the wrongful death lawsuit.

Bad Faith Blog
January 1, 2017

Missouri Unfair Claims Settlement Practices Act Created No Rights For Fire Loss Caused By Suicidal Insured

Summary: American Modern insured James and Ruth Roller when Mr. Roller set fire to the garage in a failed suicide attempt. American Modern investigated the loss, denied their claim, and then the Rollers filed a declaratory judgment action. The trial court denied coverage which the appellate court affirmed on all grounds.