Bad Faith Blog

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: DAFCO, LLC, the insured, filed suit against Stewart alleging bad faith. The Supreme Court of Idaho affirmed the Idaho District Court’s granting of Stewart’s Motion for Summary Judgment for fulfilling its contractual duties in good faith while also denying DAFCO’s motion to file an amended complaint to add multiple claims, including an amended breach of the duty of good faith claim.