The nation’s premier blog focused exclusively on claims of bad faith and extra contractual damages, the Bad Faith Blog discusses current issues and highlights best practices in an increasingly complex area of law.
Pennsylvania Requires Clear and Convincing Evidence of Bad Faith
Summary: State Farm provided automobile insurance to Barry and Kimberly Shaffer which provided medical payments and UIM coverage. Barry was involved in a head-on collision which resulted in multiple serious injuries to his neck, back, eyes, and knees. At that time, Barry was on Social Security and military disability for several physical ailments. Shaffer underwent…
Prejudicially Delayed Loss Reporting Barred All Claims, Contract and Extra-Contractual
Summary: Hamilton Properties owned the Dallas Plaza Hotel, which was insured by American Insurance Company (“AIC”) when a hail storm struck Dallas in July 2009. Hail damage was covered by the policy, but losses were to be reported promptly. The District Court found that the hail loss first reported at least 19 months after the…
As Luck Would Have It: Evidence Insured Would Reject a Settlement Offer Excused Insurer from Notifying Insured of Such Offer
Summary: If a tree falls in the woods, and no one is around to hear it, does it still make a sound? If a claimant offers a settlement, and the insured would have rejected it had she known of the offer, is it bad faith? The Ninth Circuit said no. Rejecting a settlement without contacting…
Sandberg Phoenix attending CLM Annual Conference in Nashville
Summary: I look forward to attending, for the sixth year in a row, the Claims & Litigation Management Alliance (CLM) Annual Conference at the Gaylord Opryland Resort in Nashville, Tennessee on March 29 through March 31. This year Sandberg Phoenix will also be represented by fellow partners Steve Murphy, Tim Niedbalski, Sara Obermark, Tim O’Leary,…
Insurer Must Know When It Owes (or Say Why It Shouldn’t)
Summary: 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…
Insured Ordered to Pay Attorney’s Fees to Insurer for Prosecuting Frivolous Appeal
Summary: Homeowners David and Kristina Parks, brought an action against Safeco Insurance Company alleging breach of contract and bad faith in handling the claim after a wildfire destroyed their house. Safeco then hired an appraiser to determine the actual cash value (“ACV”) of the destroyed house who determined the ACV to be $169,000. Safeco paid…
Insurer Barred from Deposing Aggressive Claimant’s Attorney
Summary: Stefanie Hardacre struck and injured motorcyclist Grand Nelson. A third vehicle was also involved, but that driver’s insurer paid Nelson the policy limits of $100,000. Hardacre’s insurer, Progressive, determined that Hardacre was not at fault. Progressive denied Nelson’s claim; it had closed its investigation file three days after acknowledging receipt. Nelson v. Hardacre Nelson…
No Bad Faith If Insurer Refuses To Allow Excess Judgment To Be Entered Against Its Insured
Franklin Kropilak was badly injured when Collins made a left hand turn in front of his motorcycle. The insured was cited by a police officer just after the accident. 21st Century had the police report within in one week and within in two weeks knew that the hospital lien was $33,888. The policy for Collins…
Eighth Circuit: Fact Issues Require Reversal of Summary Judgment In Iowa Crop Insurance Hail Loss
Summary: Bruhn Farms Joint Venture (“Bruhn”) suffered significant hail damage to crops. Bruhn notified the insurer of the hail damage. After a month of no action, Bruhn requested and received approval to harvest the crops. By the time insurer sent adjusters to the farm, additional inclement weather had occurred. The adjusters, after spending minimal amount…
Tri-Partite Relationship Did Not Result in Bad Faith Exposure
Summary: The insureds sued their homeowners’ insurer and the defense attorneys hired by the insurer alleging bad faith in handling their claim, legal malpractice, and breach of fiduciary duty. The insurer resolved the bad faith claim by funding a settlement of the underlying third party claim. The Court of Appeals affirmed judgment entered in favor…