Bad Faith Blog

Summary: Mercury Casualty provided auto liability insurance coverage with limits of $15,000/$30,000 to insured driver McDaniel who, while intoxicated, ran into and seriously injured two pedestrians. Mercury investigated, offered its policy limits, and allowed the claimants’ attorney to investigate McDaniel’s assets, but balked at language plaintiffs’ attorney added to the release to account for “court-ordered restitution.” After a stipulated judgment of $3 million against McDaniel, the pedestrians sued for breach of contract and common law bad faith, which resulted in a $3 million judgment plus interest and costs in their favor. The California Court of Appeal affirmed the judgment.

Summary: Dana Johno brought a suit against Leon Duplessis & Sons, Inc. (“Duplessis”) alleging it demolished his home without consent following Hurricane Katrina. Johno also named as parties to the suit Duplessis’s two subcontractors (Hard Rock Construction and Pro Tree Services), its insurer (Scottsdale Insurance Company) and the local parish government which hired Duplessis.

Summary: Hamiti borrowed Skenderi’s truck and hit motorcyclist Kirk resulting in a leg amputation. Allstate, Skenderi’s insurer, failed to obtain a release for Hamiti when it settled on behalf of Skenderi for Allstate’s policy limits. The Appellate Court in Illinois reversed and remanded the trial court’s award of partial summary judgment in favor of Allstate.