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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
August 9, 2016

Reasonable Claims Handling Defeats Colorado Insured’s UIM Bad Faith Claim

Summary: Williams was injured in a car accident, settled with the at-fault driver’s insurance company for the policy limits of $25,000, and then made a claim against her own insurance policy under the underinsured motorist (UIM) provision. Her Owners Insurance Company (“Owners”) policy provided $100,000 of UIM coverage. Claiming medical expenses in excess of $50,000 and lost wages in excess of $60,000, she demanded the policy limits, but her demand was rejected. Williams then filed suit against Owners alleging breach of contract and both common law and statutory bad faith delay in processing her claim. The district court granted Owners’ motion for summary judgment after finding that Williams failed to produce evidence showing the unreasonableness of Owners’ conduct. On Williams’s appeal, the United States Court of Appeals for the 10th Circuit affirmed on all counts.

Bad Faith Blog
August 4, 2016

No Provable Conscious Wrongdoing, No Bad Faith

Summary: Thomas and Allison Missler’s home was destroyed in a fire on June 1, 2011. While the fire department was responding to the fire, the Misslers’ State Farm insurance agent, Theresa Chapman, arrived at the scene. The Misslers had purchased a homeowners insurance policy from State Farm which provided dwelling coverage, personal property coverage and coverage for additional living expenses. After arriving, Chapman contacted Indiana Restoration & Cleaning Services (“IRCS”), a State Farm preferred vendor. The Misslers became dissatisfied with IRCS and State Farm. They then filed suit against both and appealed after State Farm prevailed on its motion for summary judgment. State Farm prevailed on appeal.

Bad Faith Blog
July 31, 2016

New York’s Highest Court Applies Ohio’s Bad Faith Law

Summary: The New York Court of Appeals affirmed the trial court’s denial of Seneca Specialty Insurance Company’s (“Seneca Specialty”) motion to dismiss. Seneca Specialty relied upon New York’s restrictive bad faith requirements for this commercial property loss even though the insured’s building was located in Ohio. The prevailing conflicts of law rule provides that whenever the insured risk is located entirely within one state, that state’s law will control the litigation.

Bad Faith Blog
July 26, 2016

Florida Insurer Required to Produce Its Attorneys’ Time and Billing Records to Prevailing Bad Faith Claim Insured

Summary: Kelly Paton was injured when her vehicle was struck by an underinsured driver (“UIM”). At the time, Paton was covered by an insurance policy issued by GEICO. GEICO failed to pay the full amount due under the UIM provision and Paton filed suit. Paton obtained a jury verdict in her favor on a breach of contract and a bad faith claim. As the prevailing party, Florida’s bad faith law entitled Paton to attorneys’ fees. Paton then served discovery requests on GEICO seeking to obtain GEICO’s billing and time records and lodestar fee interrogatories. GEICO objected, arguing that the records were privileged and irrelevant. The trial court overruled GEICO’s objection, but the Court of Appeals quashed the trial court’s orders requiring GEICO to produce the time records.

Bad Faith Blog
June 28, 2016

Under Ohio law, Bad Faith Claims Can Be Brought Against Insurers Even If There Is No Basis For Coverage

Summary: James Glenn and Latia Ballard were injured in a car accident on February 6, 2001. Glenn was driving and Ballard was a passenger. Both qualified as insureds under Glenn’s policy issued by Nationwide. Glenn and Ballard both submitted claims on the policy’s medical benefits coverage, which provided up to $5,000 to pay for medical services. At first, Nationwide allowed Glenn’s claim and issued him a check. After Glenn’s attorney returned the check asking that be made out to the medical provider, Nationwide denied both Glenn’s and Ballard’s claims.