Bad Faith Blog

An insurer is required to know the law, and to fulfill any obligations that would exist even in its “least coverage” scenario. The Louisiana Court of Appeal found an insurer committed bad faith by failing to pay a statutorily-mandated amount despite pending litigation involving the matter that could result in reimbursement in excess of that amount. The Court required the insurer to pay the minimum due first, unless there exists a legitimate concern the statutory minimum is not owed at all. The fact that more might be owed does not amount to such a concern.

Summary: Spencer, a truck driver employed by Annett Holdings, was injured on the job. He filed suit against Annett making several bad faith claims, including failure to pay medical bills, delaying necessary medical care, and delaying healing period benefits. The district court dismissed the action for failing to present a submissible case, which the 8th Circuit affirmed.

Summary: Andrews had a compensable work-related injury while working as a gold polisher for Ridco. Andrews sued Twin City Fire Insurance Co. (“Twin City”) and Ridco for the alleged bad faith handling of his worker’s compensation claim. During the course of that case, the circuit court ordered unredacted materials produced from nearly 200 claim files which Twin City claimed were protected under the attorney-client privilege. The Supreme Court of South Dakota reversed and remanded with directions.

Summary: Harris’ 1976 work-related motor vehicle accident left him a paraplegic which resulted in multiple medical complications. Thirty-one years after the accident, the workers’ compensation carrier challenged (controverted) some aspects of his medical care and required him to submit to an independent medical evaluation. The Alaska Worker’s Compensation Board ruled that several of those controversions were frivolous, unfair, or in bad faith and imposed a statutory penalty and reported its findings to the Alaska Division of Insurance. The Alaska Workers’ Compensation Appeals Commission ruled the Board was not authorized to impose a penalty for some of those controversions. The Supreme Court of Alaska reversed that ruling and vacated the Commission’s reversal of the Board’s award of attorney’s fees, reinstated the Board’s award, and remanded to the Commission to award fees for Harris’ appeal in the Commission.

Summary: Intentional obstruction of workers’ compensation is a statutory remedy in Minnesota that provides relief for an unfounded refusal to pay benefits or a substantial delay in payment that is designed to induce settlement. Zurich made a number of questionable decisions in its handling of a claim and a jury question was created.