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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
February 26, 2018

Kentucky High Court Upholds Bad Faith Determination Despite Reservation of Rights Defense and Filing Declaratory Judgment

James Demetre carried liability insurance on his vacant lot, which was previously a gas station. Demetre was notified that a family occupying a nearby residence was bringing environmental claims against him stemming from the alleged migration of petroleum from his property. Indiana Insurance Company provided a defense under a reservation of rights, sought declaratory judgment on its coverage dispute, and ultimately indemnified Demetre in relation to the final settlement. Nevertheless, Demetre sued Indiana Insurance for bad faith breach of his insurance contract. These claims went to trial and Demetre was awarded $925,000 in emotional distress damages and $2.5 million in punitive damages. The resultant question is: how is such a result possible?

Bad Faith Blog
July 4, 2016

Ninth Circuit Affirms Zero-Dollar Verdict in Favor of Insured

Summary: After its insured, Lawrence Saks, wrongfully obtained disability benefits under his insurance policy, National Life Insurance Company sued Saks for fraud. Saks counterclaimed with a claim for breach of good faith and fair dealing. At trial, the jury returned a verdict in favor of National Life on its fraud claim and a zero-dollar verdict in favor of Saks on his counterclaim. Both sides appealed.

Bad Faith Blog
July 15, 2014

Mental Anguish, Emotional Distress, and Punitive Damages Denied, But a Second Chance at Contract Damages Allowed

Summary: Hurricane Katrina damaged the Hoover’s house and cabana. The usual question was whether the damage resulted from a covered wind loss or an excluded storm surge. The trial court’s directed verdict on part of the contract damages was reversed, but the directed verdicts disallowing the mental anguish, emotional distress, and punitive damages claims were affirmed. In addition, the plaintiffs’ expert’s roof structure testimony was allowed under Mississippi’s Daubert standard.