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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 26, 2018

Tenth Circuit Affirmed Summary Judgment For Insurer On Bad Faith Claims After Finding Legitimate Dispute Of Coverage And No Evidence Of An Inadequate Investigation

The Tenth Circuit affirmed summary judgment in favor of State Farm on the insureds’ count for bad faith relating to a property damage claim. The court found State Farm relied upon a legitimate dispute of the scope of coverage in initially denying and delaying agreement to an appraisal. The court further found the insureds had produced no evidence to support their claim State Farm performed an inadequate investigation of the claim. The insureds disputed the findings of State Farm’s investigation was insufficient to infer the investigation was inadequate.

Bad Faith Blog
July 30, 2017

Homeowner’s Beware: Read Your Insurance Contract or Lose

Jack and Carolyn Brockway filed suit against Allstate after it denied coverage for losses plaintiffs suffered after a theft at their home. The plaintiffs filed claims immediately following the theft which Allstate denied more than two years later. The plaintiffs sought damages for breach of contract and for breach of the implied covenant of good faith and fair dealing. In response, Allstate moved for summary judgment, arguing that a two year suit limitation provision contained in the insurance contract barred the plaintiffs’ action. The trial court granted the motion for summary judgment which was affirmed on appeal.

Bad Faith Blog
July 23, 2017

Ninth Circuit Finds California’s Genuine Dispute Doctrine Does Not Bar Bad Faith Judgment Against Excess

LMA North America, Inc. (LMA) sued National Union for breach of contract and bad faith after defendant refused to either contribute $3.75 million towards the settlement of counter-claims asserted by LMA’S competitor, Ambu, or take over the defense of the trade disparagement and false advertising claims. After settling the underlying claims above the $1M primary coverage, LMA asked National Union to pay the balance of the settlement or assume the defense. After the settlement was finalized, National Union agreed to assume the defense. LMA claimed in the coverage and bad faith case that National Union acted in bad faith. The district court denied National Union’s motion for summary judgment and entered judgment for LMA on the jury’s verdict in favor of LMA on the breach of contract and bad faith claims while rejecting the punitive damages claim. The Ninth Circuit affirmed the contract and bad faith judgments.

Bad Faith Blog
May 28, 2017

Let the Jury Decide:  Were Medical Expenses Withheld in Bad Faith?

Plaintiff sued Liberty Mutual for breach of contract and breach of the duty of good faith and fair dealing when Liberty Mutual refused to pay medical expenses incurred for transfer to a trauma center. Liberty Mutual claimed the transfer and extra costs were unnecessary. The trial court granted Liberty Mutual summary judgment finding as a matter of law that a denial based upon unnecessary medical expenses was not bad faith. The Oklahoma Supreme Court disagreed, reversed, and remanded, finding that whether Liberty Mutual acted in bad faith was a question for the jury.

Bad Faith Blog
May 21, 2017

Alaska Insurers Face Potential New Claims Handling Tort

Summary: A driver lost control of his truck and crashed into a cabin causing property damage, including a heating fuel spill, and personal injuries to the cabin’s owner. The cabin’s owner brought suit against the driver and his insurer alleging in part that the insurer took charge of and negligently handled the fuel spill cleanup. The trial court granted summary judgment in favor of the insurer finding it owed no duty to the cabin’s owner. On appeal, the Alaska Supreme Court found a duty by the insurer was not precluded, and summary judgment was not appropriate.