Bad Faith Blog

Summary: The insured made significant improvements to its building, thereby increasing building’s value. Insurer made initial payments to insured under building, personal property and business income coverages. After substantial negotiations between insurer and insured’s counsel, insured filed breach of contract action against insurer. Insured won at trial, and insurer paid the judgment and interest and obtained a satisfaction of judgment.

Summary: Safeco had reviewed the facts, carefully evaluated the value of the Plaintiff’s uninsured motorist case, round tabled the case when challenged that its offers were too low, and documented well its offers and the reasons for those offers. Although the Court did not rule on the breach of contract claims filed against Safeco, the Court found both that Safeco’s conduct was not in bad faith and was not in violation of the New Mexico statutes. Accordingly, the bad faith and extra-contractual damage claims against the adjuster and Safeco were dismissed and summary judgment was entered against Plaintiff on those claims. The insured’s positions were not helped by his attorney’s failure to abide by the local court rules.