Bad Faith Blog

Salvati’s husband died as a result of a work injury. Ms. Salvati sued several parties she believed responsible for her husband’s death. The parties in the underlying action and their primary carrier agreed at mediation to a $6,000,000 settlement. The primary carrier tendered its $1,000,000 in coverage, but the excess carrier (American Insurance Company (AIC) refused to pay. The case against AIC asserted breach of contract, declaratory judgment, Massachusetts Consumer Protection violation, unfair and deceptive acts in insurance, and professional negligence for failure to settle the claims. 

Summary: A 1996 Jeep Grand Cherokee owned by Daniel and Sheryl Berg sustained heavy damage in an accident. The Bergs took their vehicle to a dealer participating in their automobile insurer’s “Blue Ribbon Repair Service Program.” According to the Bergs, although the appraiser concluded the Jeep’s frame could not be repaired because it was “too twisted,” the insurer “reversed” the appraisal and sent the Jeep to another repair shop to attempt repairs over the next four months.