The Supreme Judicial Court of Massachusetts recently heard an appeal regarding a particularly obstinate insured, ruling that recognition of a consent-to-settle provision does not in and of itself violate an insurer’s duties under Massachusetts’ claim settlement practices statute. Specifically, in Rawan v. Continental Casualty Co., the court held that Continental was not in violation of Massachusetts General Laws chapter 176D, section 3(9)(f), which mandates that an ... Keep Reading »
Bad Faith
South Carolina Supreme Court’s Quiet Erosion of Insurers’ Attorney-Client Privilege Rights
One decision that flew under the radar in 2019 continues the recent trend of courts to dispense, under among other things the previously discussed “at-issue” waiver doctrine, with insurers’ fundamental rights to confidentiality with respect to legal advice. In the June 2019 decision In re Mt. Hawley Insurance Co., No. 2018-001170 (S.C. June 12, 2019), South Carolina directed, in response to a certified question from the Fourth Circuit Court of Appeals, the circumstances ... Keep Reading »
Eleventh Circuit Rejects Insurer-Defended Policyholder’s Bid to Expand Florida’s Bad Faith “Excess Judgment Rule” to Include Collusive Settlements Concocted Without Insurer’s Consent
In Cawthorn v. Auto-Owners Insurance Co., No. 18-12067 (11th Cir. Oct. 25, 2019), the Eleventh Circuit affirmed the U.S. District Court for the Middle District of Florida’s grant of summary judgment in favor of Auto-Owners Insurance Co., ruling that a consent judgment does not constitute an excess verdict, which is an essential element of a Florida bad faith claim. This appeal arose from an April 2014 underlying automobile accident in which David Cawthorn and Bradley ... Keep Reading »
Back to Basics: The Georgia Court of Appeals Distinguishes Acceptance From Counteroffer
The Georgia Court of Appeals recently reiterated the fundamentals of contract law within the context of insurance settlement negotiations in Yim v. Carr. In this case, the plaintiff offered to settle within policy limits and to release liability against specific persons or entities. The defendant's insurer agreed to the settlement in principle, but sought clarification about who would be included in the release. Ultimately, the court held that this did not constitute ... Keep Reading »
Break Out Your Crystal Ball: New York’s First Department Relies on Policy’s Mitigation Provision as Support for Allegation That Consequential Damages Were Foreseeable
An insured sought coverage under its commercial property insurance policy for property damage incurred after construction work was performed in an adjoining building. Contending the insurer’s “investigatory process has taken so long and become so attenuated that the structural damage to the building has worsened,” the insured brought suit for breach of contract for failure to pay a covered loss under its insurance policy and breach of the implied covenant of good faith ... Keep Reading »
No Offer, No Rejection, No Bad Faith: Georgia Supreme Court Limits Liability for an Insurer’s Bad Faith Refusal to Settle
On March 11, 2019, the Georgia Supreme Court handed down an important decision in First Acceptance Insurance Company of Georgia, Inc. v. Hughes, which further clarifies the circumstances under Georgia law for when an insurer may be liable for bad faith in refusing to settle a claim within policy limits. In Hughes, the insured caused a multi-vehicle accident and resulting injury to five individuals. An attorney who represented two of those individuals – Julie An and ... Keep Reading »
Nevada Supreme Court Holds That Insurer’s Liability for Breach of the Duty to Defend is Not Capped at Policy Limits
In Century Surety Company v. Dana Andrew (Dec. 13, 2018), the Nevada Supreme Court issued an opinion regarding whether, under Nevada law, the liability of an insurer that has breached its duty to defend, but not acted in bad faith, is capped at the policy limit plus any costs incurred by the insured in mounting a defense, or whether the insurer is liable for all losses consequential to the insurer's breach. Ryan Pretner ("Pretner") and Pretner's guardian (Respondents) ... Keep Reading »
When Evidentiary Error Matters: Eleventh Circuit Affirms Decision to Grant Retrial
The U.S. Court of Appeals for the Eleventh Circuit recently closed the book on litigation in which GEICO had been involved since 2010, holding that the granting of a retrial—which resulted in a GEICO victory after an initial verdict of more than $5 million had been rendered against the insurer—was warranted and appropriate. See Joshua Moore v. GEICO General Ins. Co., No. 17-13655 (11th Cir. Dec. 14, 2018). The story began with a rejected GEICO settlement offer following ... Keep Reading »
Dot the I’s and Cross the T’s: the Importance of Clarity in Claim Communications and the Availability of Punitive Damages for an Insurer’s Bad Faith Failure to Settle
The Georgia Court of Appeals recently made waves in Hughes v. First Acceptance Insurance Company of Georgia, Inc., 343 Ga. App. 693 (2017). First, it aggrandized the role of a jury in determining the existence of an offer to settle a claim where the text of purported offer letters was not in dispute. Second, it subtly reminded litigants that punitive damages are available in a bad faith failure-to-settle claim where the claim sounded in tort and had not been ... Keep Reading »
Pennsylvania Supreme Court Clarifies Showing Required for Bad Faith Insurance Claims
The Pennsylvania Supreme Court has, for the first time in the 37-year history of Pennsylvania’s bad faith insurance statute, 42 Pa.C.S. § 8371, considered the necessary elements of such a claim, and it has determined that proof of an insurer’s motive of self-interest or ill will are not required. See Rancosky v. Washington Nat'l Ins. Co., 28 WAP 2016 (Pa. Sept. 28, 2017). The case arose from a supplemental cancer insurance policy that plaintiff LeAnn Rancosky ... Keep Reading »