Date archive: December 2015

New Jersey Rejects Strict Liability Standard for Bad Faith

Summary:  New Jersey Manufacturers Insurance Company (“NJM”) appealed the ruling that it breached its duty of good faith by failing to settle a claim against its insured which was within its policy limits. The New Jersey Superior Court, Appellate Division, applied the reasonableness standard in assessing whether the claim for bad faith was proper. Wood…

Contract Language Prevented Third-Party Bad Faith Claim

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…

The Duty of Good Faith Runs Only to Insureds in Maine–Not Adversaries

Summary:  The Maine Supreme Court in Linscott clarified to whom insurers owe duties. Because a plaintiff who brings suit against the insured is an adversary of the insurer defending the case, the insurer is entitled to use negotiating tactics commonly used by lawyers. Linscott v. State Farm Mutual Auto Insurance Company Plaintiff Mervin Linscott, a…

Third Party Bad Faith Claims Not Foreclosed in Utah by Paying an Excess Judgment

Summary:  Campbell caused a serious automobile accident and was found liable for a judgment in excess of his insurance policy’s limits. Despite the serious risk of an excessive judgment and multiple offers to settle within policy limits, State Farm, Campbell’s insurer, refused to settle the claim. Campbell filed suit against State Farm for bad faith…

Vermont Requires Utmost Good Faith to Fend Off a Bad Faith Claim

Summary:  Vermont’s bad faith failure to settle cause of action is governed by the Vermont Supreme Court’s 1938 ruling in Johnson v. Hardware Mut. Cas. Co. The decision established Vermont’s requirements for determining when an insurer acted in bad faith and was liable for failing to settle a dispute. W. O. Johnson had an automotive…

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