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: State Farm issued an uninsured motorist policy to Enrique with a $100,000 limit. Enrique was injured in an auto accident, sought UM benefits and also sought to recover bad faith damages. The bad faith portion of the case was stayed pending resolution of the UM claim which resulted in a jury verdict awarding $260,000. However, the trial court granted summary judgment in favor of State Farm on the bad faith claim which a divided Delaware Supreme Court affirmed.

Summary: The insured, Morlan Enterprises (Morlan), brought an action against Owners Insurance Company (Owners) alleging bad faith and a violation of the Unfair Trade Practices Act (UTPA). In response, Owners sought a writ of prohibition seeking to prevent the Circuit Court from exercising jurisdiction over Owners, from applying West Virginia substantive law rather than Ohio law to an insurance coverage dispute, from allowing Morlan to proceed on its bad faith claim, and from prohibiting presentation of certain evidence. The majority of theSupreme Court of Appeals of West Virginia held in three opinions that Owners had not established the necessary elements for the granting of a writ and, therefore, denied the requested writ of prohibition.

The insured, an oil distribution company, brought an unfair trade practices action against its insurer following denial of coverage on an environmental remediation claim. The insurer brought a cross-claim for breach of contract and negligent misrepresentation due to the lack of reporting a prior claim on the insured’s application.