In a matter of first impression, under Iowa law, the Iowa Supreme Court held a common law claim for bad faith failure to pay workers’ compensation benefits was not available against the third-party claims administrator (“TPA”).
We cover current issues, highlights and best practices exclusively on claims of bad faith and extra contractual damages.
No Assignment, No Bad Faith: Rhode Island Supreme Court Finds Insurer Has No Duty to Third Party Claimant Unless There is an Assignment by the Insured
Automobile liability insurer brought action against its insured, an injured third-party claimant and claimant’s parents for declaratory judgment that it had no obligation to pay sums beyond the policy limits. Third-party claimant and his parents counterclaimed for declaratory relief. The Superior Court entered judgment in favor of the insurer. After appeal, the Rhode Island Supreme Court held the insurer owed no duty to third-party claimant and his parents to act in a reasonable manner and in good faith in settling claim.
Under Florida Law Court Agrees the Insured and the Insured’s Attorney’s Conduct Are Relevant to Bad Faith
An insured motorist who sustained injuries in a motor vehicle accident brought a first party bad faith action alleging the automobile insurer acted in bad faith in attempting to settle the claim for underinsured motorist (UIM) benefits. The district court granted summary judgment for the insurer; however, the Eleventh Circuit held that although actions of the insured or the insured’s lawyer were part of the “totality of circumstances” to be considered in bad faith claims, there were factual issues that still existed precluding summary judgment.
Claim Professionals Beware: Adjusters Can Be Held Liable In Their Individual Capacity For Bad Faith In Washington State
Insured motorist who was injured in an accident with an at-fault motorcyclist brought action against the automobile insurer’s adjuster who handled the claim for bad faith and violation of the Consumer Protection Act. After the trial court dismissed the action and certified it for appellate review, the Court of Appeals held the duty of good faith imposed on “all persons” involved in insurance applies equally to individuals acting as insurance adjusters. Also, the appellate court held individual insurance adjusters can be liable for a violation of the Consumer Protection Act, even if no contractual relationship exists with the individual insured.
Summary: A motorist, who was injured in an automobile accident with a rental car, brought a garnishment action against the renter and car rental company, seeking the $25,000.00 limit provided by the Motor Vehicle Responsibility Law (MVFRL). The renter filed a cross-claim against the car rental company alleging bad faith failure to settle and breach of contractual duty to defend. The trial court granted summary judgment for the car rental company and the renter appealed. On appeal, the Missouri Court of Appeals, Eastern District, found the rental car company did not have a duty to defend the renter and the rental car company did not commit bad faith in refusing to settle.