Dippin’ Dots wanted coverage for spoliation of its ice cream that resulted from a power outage. Travelers denied coverage and Dippin’ Dots sued Travelers for both the $750,000 value of the spoiled ice cream and for bad faith based on Travelers’ handling of this property damage claim. Dippin’ Dots, LLC v. Travelers Property Casualty Co. of America Travelers moved to bifurcate the trial of the liability and first party bad faith counts, and the Court granted Travelers’ request finding that judicial economy would be advanced by the bifurcation.
We cover current issues, highlights and best practices exclusively on claims of bad faith and extra contractual damages.
Montana recognizes several equitable exceptions to the American Rule regarding attorney fees in the area of insurance. The Montana Supreme Court has previously recognized a first-party insured can recover attorney’s fees based on the insurer’s breach of the duty to defend. This limited exception was then expanded to include cases where the insurer disputed coverage and the first-party insured incurred attorney’s fees litigating the coverage dispute and was successful in so doing. Now, in this UIM case involving Tonya Mlekush, the court has further extended the allowance of attorney’s fees to UIM claimants who recover more at trial than the last offer made by the insurer.
Summary: Charter Oak Insurance was punished for willfully deceiving a claimant about coverage for her UIM claim. Defendant Charter Oak was the commercial insurer of Billion Empire Motors, an auto dealership in South Dakota. Billion loaned a car to Peterson who had an accident that severely injured her passenger, Dziadek. Peterson had $100,000 worth of coverage for Dziadek. Charter Oaks’ claims representative contacted the lawyer for Dziadek and told him there was no coverage under the Charter Oak policy for under-insured motorists.
Adjustment of Claims Did Not Cause Mental Anguish: Fifth Circuit Affirms District Court in Hurricane Katrina Claim
Summary: Fifth Circuit finds there was no evidence to support insureds’ claim for extra-contractual statutory penalties based on mental anguish and lost wages. Also, Fifth Circuit finds insurer acted in good faith and timely in adjusting insureds’ contents damage claim. Homeowner insureds French and Sutter sued Allstate to recover additional insurance payments for damages to their home resulting from Hurricane Katrina. The insureds also sought statutory penalties and costs under Louisiana law. After a bench trial, the District Court awarded the insureds additional insurance payments as well as statutory penalties. This blog entry will only discuss the extra contractual damages awarded to the insureds.
SUMMARY: California appeals court finds insurer breached its duty of good faith and fair dealing when it pursued a subrogation action against a tortfeasor to recover the cost of repairs after the insured had not authorized repairs or pursuit of the subrogation action. Hibbs v. Allstate Insurance Company. 2011 WL 1485623 (Cal.App. 2 Dist.)) The Hibbs’ vehicle, which was insured by Allstate, was damaged when it was struck by Brooks. Hibbs towed the vehicle to a body shop and contacted Allstate. The Hibbs informed Allstate’s claims adjuster that they believed the vehicle was a total loss.