In jurisdictions that impose on an insurer a common-law duty of good faith and fair dealing and a statutory duty not to act vexatiously or unreasonably, an insurer may be found to have violated one duty even if it did not violate the other. The Eighth Circuit recently handed down a ruling serving as an example of this principle. In Tripp v. Western National Mutual Insurance Co., the Court of Appeals affirmed post-judgment relief based on South Dakota’s statutory prohibition against unreasonable or vexatious behavior by an insurer.
Extra-Contractual Liability
Florida Appellate Court Substitutes Opinion Concerning Premature Bad Faith Claims
In State Farm Florida Insurance Co. v. Seville Place Condominium Association, 2011 Fla. App. Lexis 11314 (Fla. 3d DCA July 20, 2011) Florida’s Third District Court of Appeal granted motions for rehearing and rehearing en banc and withdrew its prior October 14, 2009 opinion in the same case. …
New Jersey High Court: Insureds Entitled to Jury Trial on Bad-Faith Claims
n a case of first impression, New Jersey’s highest court has determined that policyholders’ bad-faith claims against their insurance company for failure to settle within policy limits are traditional contract claims that give insureds the right to a trial by jury. …
Insurer Falls Short in Bad Faith Summary Judgment Bid Before the Massachusetts Supreme Judicial Court
The Supreme Judicial Court recently rejected a direct summary judgment appeal from AIG Domestic Claims, Inc. (“AIG”) concerning AIG’s handling of a workers’ compensation claim. The plaintiff alleged, inter alia, that AIG acted outside the claims-handling process by improperly pursuing criminal insurance fraud charges against him. …
New York Appellate Court Reverses Judgment of Insurance Bad Faith and Remands for Additional Fact-finding
The New York Appellate Division for the First Department recently reversed a decision of a lower court that had granted summary judgment to the plaintiff, an excess insurer, on a count of insurance bad faith against a primary insurer. Federal Ins. Co. v. North Amer. Spec. Ins. Co. et al., Docket No. 603926/05 (N.Y.A.D., 1st Dep’t, April 5, 2011). …
Florida Supreme Court Rules that Attorney Client Privileged Documents Not Discoverable in First Party Bad Faith Action
The Florida Supreme Court recently held that the attorney-client privilege applies to an insurer’s written communications and that the insured cannot discover such privileged documents in a first party bad faith action. …
Florida Developments – Significant Bad Faith Reforms Proposed in Florida
Earlier this month, Florida State Senator John Thrasher (R-Jacksonville) filed Senate Bill 1592 containing proposed reforms to Florida insurer bad faith law. …
Insurance & Reinsurance Review – March 2011
Edwards Angell Palmer & Dodge’s Insurance and Reinsurance Department recently published its latest Newsletter, Insurance & Reinsurance Review – March 2011, which contains nine articles about various topics in the insurance and reinsurance industry. …
Massachusetts Appeals Court Finds Insurer In Bad Faith In Fee Dispute
The Massachusetts Appeals Court recently held that an insurer’s refusal to pay any fees incurred by independent counsel hired by the insured was in bad faith, but also held that the insurer was only liable for reasonable fees that the insured actually paid, not counsel’s full rate. …
Connecticut District Court Grants Summary Judgment to Insurer on Bad Faith Claim
The United States District Court for the District of Connecticut recently granted a property insurer’s motion for summary judgment on a claim that the insurer acted in bad faith when it denied coverage to its insured for damage to the basement walls in the insured’s home. …