Category: Bad Faith and Extra-Contractual Liability

Mitchell v. Fortis Ins. Co.

(Supreme Court of South Carolina, September 14, 2009)

Policyholder brought causes of action for breach of contract and bad faith rescission against his insurance company, and sought actual and punitive damages as a result of the company’s termination of his health care insurance from original issuance on the grounds of a purported material misrepresentation due to a subsequent positive HIV test and mis-dated referral note.  The jury awarded the policyholder $36,000 in actual damages on the breach of …

Robert Resources, LLC. v. United Fire and Casualty Company (Fifth Circuit, August 11, 2009)

The action originates from several property damage claims arising from Hurricane Katrina in 2005.  The insured sued its insurer alleging that the insurer acted in bad faith by refusing to make any payments under its policy due to the insurer's own financial situation.  Due to this financial pressure, the insured alleges that the insurer intentionally characterized the damage arose from flooding issues which was not covered under the policy.  After a jury trial, …

 Chernish v. Massachusetts Mutual Life Insurance Company, (Case No: 5:08 CV 0957)

In 1987 Plaintiff Anne Chernish obtained a disability income insurance policy from defendant Massachusetts Mutual Life Insurance Company. In and around 1988, plaintiff allegedly became ill and filed a claim for benefits under the policy.

For reasons beyond the Court’s knowledge at the time of the decision, benefit payments were apparently stopped in 2001 and 2004. Despite plaintiff’s renewed request for benefits, the insurer did not disclaim coverage and had not …

Harden and Chambers v. State Farm Mutual Automobile Ins. Co.

(United States Court of Appeals, Eleventh Circuit, July 22, 2009)

Policyholders appealed from the dismissal of their class action breach of contract suit against insurer and for certification of a question of law to the Georgia Supreme Court to determine whether Georgia law prohibits the insurer from asserting set-offs in the payment of uninsured motorist personal injury claims.  Specifically, the policyholders argued that their failure to meet the condition precedent imposed by Ga. …

Gaffney v. State Farm Fire and Casualty Co.,

E.D. of LA (July 2, 2009)

The policyholder filed a claim against their insurer asserting that the insurer did not adequately adjust their claim after their home was damaged by Hurricane Katrina and sued the insurer for damages and bad-faith penalties.  The policyholders then instituted another action on behalf of their children, asserting they are additional insureds and are entitled to bad-faith penalties for the insurer’s mishandling of the parents’ claim. 

The District …

The issues involved in most bad-faith cases tend to be fairly complex.  This is not completely surprising in a circumstance where there must be a strong disagreement between the two sides as to some insurance issue before there will be any action.  Apart from potential concerns that a jury may weigh expert opinions too heavily, there is little denying that expert testimony may serve the cause of both sides to a bad-faith action.  This article examines the challenges experts face in bad faith lawsuits. 

For a …

Cargill Inc. v. Ace Am. Ins.  

(Court of Appeals of Minnesota, May 26, 2009)    

The state of Oklahoma sued Cargill for losses arising out of Cargill’s waste disposal practices. Cargill sought defense and indemnity from 50 insurers covering the time frame the disposal occurred. An insurer providing the defense sought a neutral loan receipt agreement with the policyholder. The policyholder refused. The court held that if an insured in bad faith refuses to enter into a neutral loan receipt agreement, a …

ACCC Ins. Co. v. Tammy Renee Carter et al,

(United States District Court, Northern District of Georgia, May 26, 2009)

This action involved a unique question under Georgia law regarding an alleged bad faith refusal to pay claim and whether an insurer acts in bad faith in paying the policy limits of its insured’s policy without conditioning payment on the release of its insured where claimants’ counsel demanded payment of the face amount of its insured’s policy, but expressly refused to release the insured in …

There is a decision out of the Eastern District of Kentucky which deals with the qualifications of an expert in a bad faith case. In applying Daubert and its progeny, the court excluded the testimony of a former judge that had been offered as an expert on bad faith issues. See Sullivan v. AIG, 2008 U.S. Dist. LEXIS 56446. Contrast this case with holding of the a case out of the Western District of Wisconsin where the court allowed the testimony of an attorney on …