Bad Faith Blog

Summary: The insured made significant improvements to its building, thereby increasing building’s value. Insurer made initial payments to insured under building, personal property and business income coverages. After substantial negotiations between insurer and insured’s counsel, insured filed breach of contract action against insurer. Insured won at trial, and insurer paid the judgment and interest and obtained a satisfaction of judgment.

Summary: Dana Johno brought a suit against Leon Duplessis & Sons, Inc. (“Duplessis”) alleging it demolished his home without consent following Hurricane Katrina. Johno also named as parties to the suit Duplessis’s two subcontractors (Hard Rock Construction and Pro Tree Services), its insurer (Scottsdale Insurance Company) and the local parish government which hired Duplessis.

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.

On September 9, 2014, the Missouri Supreme Court unanimously struck down the State’s punitive damage cap in Lewellen v. Franklin, 2014 WL 4425202 (Mo. banc Sept. 9, 2014).

In Scottsdale Ins. Co., et al. v. Addison Ins. Co., et al., No. WD75963 (Mo.App.W.D. Oct. 1, 2013), a “case of first impression,” the Missouri Court of Appeals both redefined the elements of a third-party bad faith failure to settle claim and recognized for the first time an excess carrier’s right to pursue a primary carrier under a theory of equitable subrogation to recover for a primary insurer’s bad faith failure to settle.