Bad Faith Blog

Summary: Insured’s judgment creditors brought action against liability insurer to recover for unfair insurance settlement practices in connection with claim for damage to plants from salt water drawn from well drilled by insured. The trial court, after a six-day bench trial, entered judgment in favor of creditors and awarded attorney fees and expenses. Parties filed cross appeals and Appeals Court affirmed in part, reversed in part, and remanded.

Summary: A judgment was entered against Andrews in excess of its policy limits. Amoco Production, as assignee of Andrews Trucking, brought an action against Gainsco, the insurer, for bad faith failure to settle. Gainsco had been presented an opportunity to settle within policy limits and refused. The trial court granted summary judgment in favor of Amoco finding Gainsco liable for third-party bad faith, but the Wyoming Supreme Court reversed and remanded to enter judgment in favor of Gainsco. The Court held that when a contract provision appeared to limit Andrews’ liability to the policy limits, Gainsco had a reasonable basis for rejecting a settlement offer slightly below the policy limit.