We cover current issues, highlights and best practices exclusively on claims of bad faith and extra contractual damages.
State Farm provided automobile insurance to Barry and Kimberly Shaffer which provided medical payments and UIM coverage. Barry was involved in a head-on collision which resulted in multiple serious injuries to his neck, back, eyes, and knees. At that time, Barry was on Social Security and military disability for several physical ailments. Shaffer underwent back surgery and six months later asked State Farm to assign a UIM adjuster. The Shaffers settled their liability claim with the adverse driver for roughly $28,000 below that driver’s liability limit. After a $250,000 UIM settlement demand was met with a $10,000 settlement offer, the Shaffers filed suit more than four years after the accident. The District Court granted State Farm’s motion for summary judgment on the bad faith claim and thereafter the UIM breach of contract claim was tried, which resulted in a $250,000 award in favor of the Shaffers. The Shaffers appealed the bad faith summary judgment, which was affirmed by the Third Circuit.
Summary: Hamilton Properties owned the Dallas Plaza Hotel, which was insured by American Insurance Company (“AIC”) when a hail storm struck Dallas in July 2009. Hail damage was covered by the policy, but losses were to be reported promptly. The District Court found that the hail loss first reported at least 19 months after the storm was prejudicially late barring coverage plus the extra-contractual damages claims. The Fifth Circuit affirmed.