Author archive: badfaithblog

To Repair or Not Repair – That Is the Question

SUMMARY: California appeals court finds insurer breached its duty of good faith and fair dealing when it pursued a subrogation action against a tortfeasor to recover the cost of repairs after the insured had not authorized repairs or pursuit of the subrogation action. Hibbs v. Allstate Insurance Company. 2011 WL 1485623 (Cal.App. 2 Dist.)) The…

Aggressive Discovery Tactics Support Fraud Claim Against Property Insurer

Summary:  Insured owners of a shopping mall brought a fraud claim against CGL Insurer after the insurer denied coverage and filed a declaratory judgment suit in which they aggressively went after the insured. General Ins. Co. of America v. Clark Mall Corp.,738 Fed. Supp.2d 864 (N.D. IL 2010) General Ins. Co. of America (“GICA”) filed…

Fire Insurer’s Full and Fair Investigation Defeats First Party Bad Faith Claim

Morse v. State Farm Fire & Cas. Co., 733 F.Supp.2d 1065 (S.D. Iowa 2010) The fire department concluded that the fire’s cause was electrical.  State Farm’s fire investigator, backed up by an engineer and a forensic lab, concluded that the fire was intentionally set.  Before a jury ruled who was right, the Iowa federal judge…

Court Takes Insurer’s Side When Coverage Defense is Bona Fide

West Bend Mut. Ins. v. Norton, 940 N.E.2d 1176 (Ill. App. 3 Dist. 2010) An Illinois Appellate Court recently upheld summary judgment in favor of an insurer on the insured’s vexatious refusal to settle claim.  The insured driver, Wanda Norton, was involved in a vehicle collision with Karyn Patterson.  Norton was insured by West Bend…

Bad Faith is Almost Always a Question of Fact

Summary: It is a question of fact as to whether an insurer who has a duty to investigate is guilty of bad faith when it asks insured to tell it if facts change such that it is exposed. Columbia Casualty v. Gordon Trucking, Inc. Gordon Trucking operated a vehicle that was involved in a serious…

Close Counts for Something: Federal District Court in Florida Finds Carrier Did Not Act in Bad Faith in Attempting to Settle Lawsuit Against Its Insured

Summary:  Carrier’s diligent attempts to settle after it received a time sensitive policy limit demand demonstrated that it was not acting in bad faith.  Plaintiff’s counsel  refused to discuss the settlement contained in an overly technical and conditional demand letter while the carrier promptly acted (but failed) to achieve a settlement protecting its insured and…

Is Good Faith Only A Phone Call Away?: The Seventh Circuit Discusses an Insurer’s Duty to the Insured When There Is a “Non-Trivial” Probability of an Excess Judgment

Summary: The Seventh Circuit held an insurer, who controlled the defense of a lawsuit, had a duty of good faith to notify its insured of the “non-trivial probability” of a judgment in excess of the policy limit. R.G. Wegman Construction v Admiral Insurance Imagine this scenario.  During his deposition plaintiff testifies extensively regarding a back…

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