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Bad Faith Blog

We cover current issues, highlights and best practices exclusively on claims of bad faith and extra contractual damages.

Bad Faith Blog
March 26, 2018

Tenth Circuit Affirmed Summary Judgment For Insurer On Bad Faith Claims After Finding Legitimate Dispute Of Coverage And No Evidence Of An Inadequate Investigation

The Tenth Circuit affirmed summary judgment in favor of State Farm on the insureds’ count for bad faith relating to a property damage claim. The court found State Farm relied upon a legitimate dispute of the scope of coverage in initially denying and delaying agreement to an appraisal. The court further found the insureds had produced no evidence to support their claim State Farm performed an inadequate investigation of the claim. The insureds disputed the findings of State Farm’s investigation was insufficient to infer the investigation was inadequate.

Bad Faith Blog
October 29, 2017

Insureds Did Not Establish Consequential Damages to Support Claim for Breach of the Implied Covenant of Good Faith and Fair Dealing

The Tenth Circuit Court of Appeals affirmed the trial court’s grant of summary judgment in favor of the insurer, USAA, finding the insureds failed to establish damages to support their claim for breach of the implied covenant of good faith and fair dealing. Specifically, the court found the insureds failed to establish unusual emotional distress, recoverable attorneys’ fees, or recoverable diminution in value damages that could independently support the claim.

Bad Faith Blog
October 8, 2017

Washington Court of Appeals Finds No Preclusion for Bad Faith Claim After Resolution of UIM Benefits Action

Anastasia Fortson-Kemmerer (“Plaintiff”) sued Allstate Insurance Company (“Allstate”) to recover for bad faith and violation of the Insurance Fair Conduct Act (“IFCA”) for its actions when investigating her underinsured motorist (“UIM”) coverage claim. Allstate moved for summary judgment on the affirmative defense that Plaintiff’s previous action to enforce her UIM policy provisions operated as res judicata and barred her bad faith claim. The trial court granted summary judgment and Plaintiff appealed. The Washington Court of Appeals reversed, stating Allstate failed to demonstrate the operation of res judicata.

Bad Faith Blog
May 21, 2017

Alaska Insurers Face Potential New Claims Handling Tort

Summary: A driver lost control of his truck and crashed into a cabin causing property damage, including a heating fuel spill, and personal injuries to the cabin’s owner. The cabin’s owner brought suit against the driver and his insurer alleging in part that the insurer took charge of and negligently handled the fuel spill cleanup. The trial court granted summary judgment in favor of the insurer finding it owed no duty to the cabin’s owner. On appeal, the Alaska Supreme Court found a duty by the insurer was not precluded, and summary judgment was not appropriate.

Bad Faith Blog
March 23, 2016

No Bad Faith for the Denial of Uncovered Losses

Summary: The insured’s assignee argued Occidental Fire & Casualty Company of North Carolina breached the covenant of good faith and fair dealing by refusing to defend and indemnify the insured against a claim regarding faulty construction of shower walls in a hotel. The District Court for Arizona found because the insurer did not defend the insured in the underlying suit, it could assert new reasons for the denial of coverage. The court ruled the policies did not provide coverage, and there was no bad faith where the policies did not provide coverage.