Bad Faith Blog

Injured logger, as an assignee of claims by a timber lessee and land owner, brought an action against his employer’s liability insurer to recover a consent judgment for the $1M policy limits. After the trial court entered summary judgment in favor of the logger, the employer’s insurer appealed. The Supreme Court of Appeals of West Virginia found the consent judgment was not binding on the insurer because it was not a party to the underlying suit and the settlement and assignment were void for fraud and collusion.

Summary: The insureds filed suit against their insurer for breach of contract and bad faith after their insurer denied their claim for a stolen boat and trailer. On appeal, the court held the policy was void due to a material misrepresentation on the application. Because there was no policy in force, there was no claim for bad faith.