Blog Archives

Webinar: Review of Significant Bad Faith Cases in 2016 (3/23/2017 at 11:30a – 12:30p ET)

Julia Molander and Jennifer Kennedy-Coggins of the Global Insurance Department present this one-hour Cozen O’Connor webinar which will provide a review of some of the most significant insurance coverage bad faith cases decided across the United States in 2016. The speakers will examine key decisions, provide a discussion of the bad faith trends, and discuss the practical tips that can be gleaned from the courts’ 2016 decisions. The goal of this presentation is to take away practical tips on how insurers can avoid bad faith and how to address and handle claims through discovery and trial. In this webinar, the speakers will discuss: The latest trends in punitive damage awards Discovery of “institutional” bad faith Bad faith standards, from strict liability to heinous misconduct

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Are Attorneys’ Bills Privileged Once Litigation Ends – California Supreme Court Says No in ACLU Litigation?

The California Supreme Court recently held, in Los Angeles Board of Supervisors v. Superior Court (2016) that attorneys’ invoices may not be protected by the attorney-client privilege after litigation ends. The issue arose out of a lawsuit brought by the ACLU to obtain billing records by law firms representing the City of Los Angeles to defend litigation brought by jail inmates. The ACLU’s position was that these law firms engaged in “scorched earth” tactics. The Court affirmed some limitations on production of these bills. The Court conceded that information could be protected if it tells the client “of the nature or amount of work occurring in connection with a pending legal event” or even an uptick in amounts spent “could

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Nickerson Redux: Five Lessons On Punitive Damages For Bad Faith Attorneys

This past June the California Supreme Court issued its decision in Nickerson v. Stonebridge Life Insurance Company, 63 Cal.4th 363 (2016), holding that post-trial Brandt fees could be included in the damage calculus for purposes of evaluating the ratio of punitive damages to compensatory damages. We wrote about this decision in an earlier blog. The Supreme Court remanded the $19 million punitive verdict to the Court of Appeals to amend the judgment to correct the maximum allowable amount of punitive damages of 10:1, or $475,000. In doing so, the Court of Appeals reissued its original decision. This decision has a number of issues that may guide insurance counsel in handling bad faith cases with a punitive exposure. The policy involved

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California Supreme Court Invites Suits against Defendants Doing Any Business in California

In a hotly contested 4-3 decision, the California Supreme Court in Bristol-Myers Squibb Company v. The Superior Court of San Francisco County, 2016 WL 4506107 greatly expanded the concept of specific jurisdiction to allow a non-resident plaintiff to file suit in California courts against any defendant who conducts or transacts any business in California, even though the plaintiff purchased that defendant’s product in another state.   The Court broadened the scope of specific jurisdiction to overcome the requirements of International Shoe Co. v. Washington, 326 U.S. 310 (1945), finding that a tangential use of the forum constitutes a “substantial” connection between plaintiff’s claim and the defendant’s forum activities. The product in question was Plavix, developed and manufactured by Bristol-Myers Squibb outside

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When a Policy Limits Offer is Not Enough: A Cautionary Tale of a Failure to Settle Case

In a recent unpublished decision, the California Court of Appeals upheld a $3 million judgment against an auto liability insurer that rejected proposed language in a settlement agreement, notwithstanding the insurer’s policy limits offer. Barickman v. Mercury Opinion, 2016 WL 3975279 (Cal. Ct. App. 2016) (unpublished). Although unpublished and not binding precedent, Barickman raises several claim handling issues which may be useful for carriers to consider. Barickman arises from a personal injury claim in which the insured, Timory McDaniel struck two pedestrians while driving under the influence. McDaniel fled the scene but was later apprehended. She reported the claim the following day to her insurer Mercury Casualty Company as an accident without further detail. Within eight weeks of receiving notice

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Genuine Dispute Defeats Both Bad Faith and Elder Abuse

The Paslays sued State Farm for failing to pay a portion of the damage caused to their Pacific Palisades house by a heavy rainstorm and for forcing them to move back into the house while it was still under construction. The complaint asserted claims for breach of insurance contract, bad faith, punitive damages and financial elder abuse under California’s Welfare and Institutions Code. State Farm brought a motion for summary judgment, arguing that it paid all of the benefits due under the policy, and even if it did not, there was a genuine dispute regarding the benefits owed, and therefore State Farm’s conduct was reasonable. The trial court agreed and granted summary judgment, dismissing the case. On appeal, the court

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The Advantages of Removal: Twombly and Iqbal Applied to Bad Faith Claims

This month, the Eastern District of Pennsylvania issued an opinion that reminds insurance carriers and their counsel that it is often beneficial to remove certain cases to federal court. While federal court offers many advantages in insurance litigation, the recent opinion in Camp v. N.J. Mfrs. Ins. Co., No. 16-1087, 2016 U.S. Dist. LEXIS 74496 (E.D. Pa. June 8, 2016) highlights one important benefit: the federal court’s role in protecting carriers from frivolous and groundless claims at an early point in the litigation. In Camp, the court considered whether to grant the insurer’s motion to dismiss when it was faced with a complaint alleging bad faith for denying the insured’s underinsured motorist (“UIM”) claim. The insurer had denied the claim

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Avoiding Insurance Bad Faith
Cozen O’Connor represents insurance clients in jurisdictions throughout the U.S. against statutory and common law first- and third-party extracontractual claims for actual and consequential damages, penalties, punitive and exemplary damages, attorneys’ fees and costs, and coverage payments. Whether bad faith claims are addenda to a broader coverage matter or are central to the complaint, Cozen O’Connor attorneys know how to efficiently respond to extracontractual causes of action. More
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