Bad Faith Blog

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.

Homeowners David and Kristina Parks, brought an action against Safeco Insurance Company alleging breach of contract and bad faith in handling the claim after a wildfire destroyed their house. Safeco then hired an appraiser to determine the actual cash value (“ACV”) of the destroyed house who determined the ACV to be $169,000. Safeco paid that amount five days after the determination. Safeco also advised the Parks of their options for recovering the full replacement cost. Safeco estimated that it would cost $440,195.55 to replace the home using equivalent construction. Safeco also informed the Parks that Safeco would “pay the replacement cost of the dwelling up to $440,195.55 or the amount actually incurred, whichever is less.”

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.