Bad Faith Blog

On April 26, 2017, the Missouri General Assembly passed a bill modifying certain statutory provisions relating to settlement of tort claims. The bill, known as HB 339 and HB 714, grants certain rights to insurers when a claimant and tortfeasor enter into a contract to limit recovery pursuant to R.S.Mo. § 537.065 and imposes new requirements on time-limited demands in R.S.Mo. § 537.058. Governor Greitens signed the bill on July 5, 2017 and it will be effective August 28, 2017. This legislation is designed to limit currently legal, but abusive, practices against insurers in an effort to reform insurance “bad faith” litigation in Missouri.

If a tree falls in the woods, and no one is around to hear it, does it still make a sound? If a claimant offers a settlement, and the insured would have rejected it had she known of the offer, is it bad faith? The Ninth Circuit said no. Rejecting a settlement without contacting the insured is never wise, but if evidence shows the insured would have rejected such an offer, a valid bad faith claim may not exist for lack of injury.

Summary: Automobile insured brought action against insurer for common law bad faith after $2.8 million judgment was entered against insured in wrongful death action. Trial court entered summary judgment in favor of insurer. The Court of Appeals affirmed summary judgment holding that the insurer did not act in bad faith by failing to tender offer of $10,000 policy limits to personal representative of decedent’s estate.