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.

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Alaska Insurers Face Potential New Claims Handling Tort

Summary: A driver lost control of his truck and crashed into a cabin causing property damage, including a heating fuel spill, and personal injuries to the cabin’s owner. The cabin’s owner brought suit against the driver and his insurer alleging in part that the insurer took charge of and negligently handled the fuel spill cleanup….

Texas Law Firm’s Coverage and EC Awards Properly Reduced from $33M to $28M

Summary: OneBeacon Insurance Company (OneBeacon) provided professional liability insurance to T. Wade Welch & Associates (Welch Firm) and firm attorneys, including Ross Wooten (Wooten). After a legal malpractice award against the Welch Firm which OneBeacon refused to settle, the Welch Firm filed common law and statutory bad faith claims against OneBeacon on which it prevailed….

Wisconsin Insurer’s Thorough, Adequate, and Timely Investigation and Proper Settlement Negotiation Tactics Bar Bad Faith and Statutory Pre-Judgment Interest Claims

Summary: Elizabeth Baires was in a car accident with an underinsured driver while insured by State Farm. After State Farm consented to settling with the underinsured motorist for its $100,000 limits, plaintiff and her husband demanded that State Farm settle her claims for the $200,000 UIM stacked limits. State Farm refused her demand, leading to…

Florida Consent Judgment Was Negotiated in Bad Faith

Summary: The Eleventh Circuit considered whether the insurer was bound by a settlement agreement between a homeowner’s association insured and a homeowner, settling the homeowner’s claim for attorneys’ fees by stipulating the homeowner would not enforce the resulting consent judgment against the homeowner’s association. The Eleventh Circuit found these Florida Coblentz Agreements unenforceable against insurers…

Eleventh Circuit Sorts Out “Mess” Involving Consent To Settle and Florida Sovereign Immunity Statute

Summary: The insured, a county in Florida, and personal representative of deceased accident victim’s estate brought a declaratory judgment action against the County’s excess insurer seeking a declaration the County was allowed to settle the personal representative’s underlying wrongful death claim without the excess insurer’s consent and without the Florida legislature passing a special claims…

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…


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