Category archive: Bad Faith

Under Florida Law Court Agrees the Insured and the Insured’s Attorney’s Conduct Are Relevant to Bad Faith

Summary: An insured motorist who sustained injuries in a motor vehicle accident brought a first party bad faith action alleging the automobile insurer acted in bad faith in attempting to settle the claim for underinsured motorist (UIM) benefits. The district court granted summary judgment for the insurer; however, the Eleventh Circuit held that although actions…

New Missouri Interpleader Law Caps Insurer Exposure for Multiple Claims

On June 1, 2018, legislation affording new protections to insurers when interpleading policy limits was enacted.  The legislation, known as HB 1531, amends R.S.Mo. § 507.060, which governs the joinder of parties in an interpleader action. Specifically, the amendment modifies existing language with insurance-specific terminology and adds five additional subsections with definitions, procedural mechanisms for…

Claim Professionals Beware: Adjusters Can Be Held Liable In Their Individual Capacity For Bad Faith In Washington State

Summary: Insured motorist who was injured in an accident with an at-fault motorcyclist brought action against the automobile insurer’s adjuster who handled the claim for bad faith and violation of the Consumer Protection Act. After the trial court dismissed the action and certified it for appellate review, the Court of Appeals held the duty of…

Kentucky Federal Court Bifurcates Coverage Claims from Claims of Bad Faith

Summary: Dippin’ Dots wanted coverage for spoliation of its ice cream that resulted from a power outage. Travelers denied coverage and Dippin’ Dots sued Travelers for both the $750,000 value of the spoiled ice cream and for bad faith based on Travelers’ handling of this property damage claim. Dippin’ Dots, LLC v. Travelers Property Casualty…

Illinois Appellate Court Strikes Down “Bad-Faith” Pattern Instructions

Summary: A 6 person jury returned a verdict against the Illinois State Medical Inter-Insurance Exchange Mutual Insurance Company (“ISMIE”) for bad-faith failure to settle. ISMIE argued on appeal that, among other things, trial of the bad faith claim to a six-person jury was unconstitutional. The 1st District Court of Appeals agreed and gave retroactive effect…

10th Circuit Affirmed Summary Judgment For Insurer On Bad Faith Claims After Finding Legitimate Dispute Of Coverage And No Evidence Of An Inadequate Investigation

Summary: The 10th Circuit affirmed summary judgment in favor of State Farm on the insureds’ count for bad faith relating to a property damage claim. The Court found State Farm relied upon a legitimate dispute of the scope of coverage in initially denying and delaying agreement to an appraisal. The Court further found the insureds…

Montana Supreme Court Extends Insurance Exception and Allows Attorney’s Fees to UIM Claimant

Summary: Montana recognizes several equitable exceptions to the American Rule regarding attorney fees in the area of insurance. The Montana Supreme Court has previously recognized a first-party insured can recover attorney’s fees based on the insurer’s breach of the duty to defend. This limited exception was then expanded to include cases where the insurer disputed…

Kentucky High Court Upholds Bad Faith Determination Despite Reservation of Rights Defense and Filing Declaratory Judgment

Summary: James Demetre carried liability insurance on his vacant lot, which was previously a gas station.  Demetre was notified that a family occupying a nearby residence was bringing environmental claims against him stemming from the alleged migration of petroleum from his property. Indiana Insurance Company provided a defense under a reservation of rights, sought declaratory…

Insurer’s Conduct Created Issues of Fact as to Non-Party’s Right to Bring Bad Faith Claim

Summary: The Oklahoma Supreme Court held that whether a property owner under a contract for deed is owed a duty of good faith and fair dealing by an insurer of previous owner’s insurance policy is a question of fact. Hensley v. State Farm Fire and Casualty Company, 398 P.3d 11 (Ok. 2017) State Farm Fire…

Insurer’s Conduct in Investigating and Settling Claim against Insured Did Not Constitute Bad Faith

Summary: The West Virginia Supreme Court of Appeals found an insurer, who defended and settled claims brought by downhill homeowners against its insured, a residential construction company, was not liable for first party common law bad faith or statutory bad faith as a matter of law. State ex rel. State Auto Property Insurance Companies v….

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