Bad Faith Blog

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.

Summary: The Netherlands Insurance Company provided insurance coverage to three corporate entities for which David Edens was the Chief Executive Officer. David and Rhonda Edens were the parents of Zachery who was a motorcyclist killed when an oncoming car turned into his path. The Oklahoma U.S. District Court found there was no UIM/UM coverage, found there could be no bad faith claim prosecuted in the absence of coverage, and entered summary judgment in favor of The Netherlands Insurance Company. The 10th Circuit affirmed on appeal.

Summary: In August 2012 a fire destroyed thirty-six apartment units owned by Summit Park Apartments, LLC (“Summit Park”). Great Lakes Reinsurance (“Great Lakes”) insured Summit Park and the policy provided for construction costs, loss of business income, and out-of-pocket expenses. The policy also obligated Great Lakes to pay out claims within thirty days.

Summary: Kelly Paton was injured when her vehicle was struck by an underinsured driver (“UIM”). At the time, Paton was covered by an insurance policy issued by GEICO. GEICO failed to pay the full amount due under the UIM provision and Paton filed suit. Paton obtained a jury verdict in her favor on a breach of contract and a bad faith claim. As the prevailing party, Florida’s bad faith law entitled Paton to attorneys’ fees. Paton then served discovery requests on GEICO seeking to obtain GEICO’s billing and time records and lodestar fee interrogatories. GEICO objected, arguing that the records were privileged and irrelevant. The trial court overruled GEICO’s objection, but the Court of Appeals quashed the trial court’s orders requiring GEICO to produce the time records.

In a first-party insurance dispute, a Florida trial court entered a discovery order compelling disclosure to the insured of portions of the insurer’s claim file. The Florida Appellate Court reversed the trial court’s order, finding error in compelling disclosure of the insurer’s claim file because the coverage issue was still in dispute.