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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
May 15, 2019

Colorado Excess Insurance Carrier’s Equitable Subrogation Claim Against Primary Carrier for Refusal to Settle Required Allegations and Proof of Bad Faith

The Colorado Court of Appeals held that an excess carrier asserting an equitable subrogation claim against a primary insurer for a failure to settle a claim within the primary carrier’s liability limits steps into the shoes of the insured, and must plead and prove bad faith to recover against a primary carrier for failing to settle. In the underlying case, a medical malpractice suit was filed against a physician with two separate professional liability policies.

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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.

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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.

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Bad Faith Blog
July 30, 2017

Homeowner’s Beware: Read Your Insurance Contract or Lose

Jack and Carolyn Brockway filed suit against Allstate after it denied coverage for losses plaintiffs suffered after a theft at their home. The plaintiffs filed claims immediately following the theft which Allstate denied more than two years later. The plaintiffs sought damages for breach of contract and for breach of the implied covenant of good faith and fair dealing. In response, Allstate moved for summary judgment, arguing that a two year suit limitation provision contained in the insurance contract barred the plaintiffs’ action. The trial court granted the motion for summary judgment which was affirmed on appeal.

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Bad Faith Blog
July 23, 2017

Ninth Circuit Finds California’s Genuine Dispute Doctrine Does Not Bar Bad Faith Judgment Against Excess

LMA North America, Inc. (LMA) sued National Union for breach of contract and bad faith after defendant refused to either contribute $3.75 million towards the settlement of counter-claims asserted by LMA’S competitor, Ambu, or take over the defense of the trade disparagement and false advertising claims. After settling the underlying claims above the $1M primary coverage, LMA asked National Union to pay the balance of the settlement or assume the defense. After the settlement was finalized, National Union agreed to assume the defense. LMA claimed in the coverage and bad faith case that National Union acted in bad faith. The district court denied National Union’s motion for summary judgment and entered judgment for LMA on the jury’s verdict in favor of LMA on the breach of contract and bad faith claims while rejecting the punitive damages claim. The Ninth Circuit affirmed the contract and bad faith judgments.

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