Bad Faith Blog

Summary: Green Earth, the operator of a Colorado Springs retail medical marijuana business and growing facility submitted a claim to its insurer for a wildfire-caused smoke and ash damage and a separate break in and theft. Atain denied the claims on multiple grounds which caused Green Earth to sue Atain for breach of contract and statutory claims for bad faith and unreasonable delays in payment. The District Court was confronted with numerous motions addressing what was and was not covered under the policy issued to Green Earth and whether Green Earth’s bad faith and delayed payment claims were sustainable. After reviewing the coverage issues at length, the Court granted summary judgment to Atain on Green Earth’s bad faith and unreasonable delay in payment claims regarding the theft, but questions of fact regarding parts of the wildfire claim and Green Earth’s related statutory claims for bad faith and unreasonable delay in payment precluded summary judgment.

Summary: The Hadarys were involved in an automobile accident with Carlos Velez, a rental car driver. Both the Hadarys and Velez had automobile insurance at the time of the accident. Velez declined to purchase the supplemental liability insurance offered by Hertz at the time of the rental, and his insurance policy limit was too low to cover the injuries incurred by the Hadarys. The Hadarys had underinsured motorist coverage through Safeway, but Safeway pointed to an “exhaustion clause” in its policy providing that Hertz had to first exhaust its financial responsibility liability before Safeway would have to pay. The trial court agreed with Safeway, but the appellate court reversed holding that the lower court’s result was against public policy. Furthermore, the trial court found that Safeway did not engage in unreasonable and vexatious conduct. The appellate court affirmed the trial court ruling reasoning that Safeway’s interpretation of its policy was reasonable but wrong because its interpretation contravened public policy.

Summary: The Louisiana Appellate Court affirmed the trial court’s dismissal of plaintiff’s claim for future medical expenses and future loss of income precluding the assessment of statutory penalties even though its policy restrictions violated Louisiana’s “Economic Only Uninsured Motorist” (EOUM) coverage statute.