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Georgia Supreme Court Clarifies Pre-Suit Offer Requirements

On March 6, 2017, the Georgia Supreme Court answered certified questions regarding the application of Georgia’s Pre-Suit Offer statute concluding that O.C.G.A. § 9-11-67.1, the statute dealing with the formation of settlement agreements pursuant to pre-suit offers to settle tort claims arising from the use of a motor vehicle, does not prohibit a claimant from conditioning acceptance of a pre-suit offer upon the performance of an act, such as timely or prompt payment. Grange Mutual Casualty Co. v. Woodard, 797 S.E.2d 814 (2017). In doing so, the Court clarified that the statute sets forth the minimum requirements for pre-suit offers. Beyond those required terms, the Court explained, parties are free to add additional terms. This includes presenting a pre-suit offer

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Posted in Bad Faith, Uncategorized

Virginia Holds Determination Whether Insurer Acted In Bad Faith Must Be Made By The Judge And Not The Jury

This country’s courts are split on whether the decision to award attorney’s fees in bad faith litigation should be made by the judge or the jury.  Earlier this fall, Virginia aligned itself firmly with the former in Revi, LLC v. Chicago Title Ins. Co., 776 S.E.2d 808 (Va., Sep. 17, 2015), holding 6-1 that the word “court” in the statute allowing an attorney’s fee award in such cases meant that the determination was one left to the trial judge. The insured purchased a five-acre parcel along the Potomac, intending to develop the property, only to discover that it was subject to National Park Service restrictions.  The policyholder’s title insurer then negotiated an agreement with the park service which removed most

Posted in Uncategorized

Texas Court: No Prejudice Required to Deny for Late Reporting Under a Claims-Made Policy

This summer in Nicholas Petroleum, Inc. v. Mid-Continent Cas. Co., 2015 WL 4456185, 2015  Tex. App. LEXIS 7489 (Tex.App., Jul. 21, 2015), a Dallas panel of Texas’ intermediate level appellate court rejected policyholder arguments that the insurer was  required to show prejudice before denying coverage under a claims-made policy based on the insured’s untimely reporting of the claim. Nicholas Petroleum owned and operated a gas station in Dallas, Texas.  Mid-Continent had issued Nicholas a Pollution Liability and Environmental Damage Policy that contained a condition precedent to coverage stating:  “In the event of a Claim under Coverage A, the Insured shall give us written notice as soon as possible but in any event no later than thirty (30) days after receipt

Posted in Uncategorized

Texas Supreme Court Declines Opportunity to Review Appellate Decision Clarifying Insurer’s Settlement Obligations In Multi-Plaintiff/Multi-Insured Context

Last year in Patterson, et al. v. Home State County Mut. Ins. Co., 2014 Tex. App. LEXIS 4460, 2014 WL 1676931 (Tex.App., Apr. 24, 2014), the Texas First Court of Appeals (Houston) held that an insurer was not obligated to accept a settlement demand unless that offer encompassed all claimants and released all insureds from liability.  On September 11th, the state’s highest court surprised many by denying the policyholders’ Petition for Writ of Error, and it thereby left the appellate panel’s ruling in place. The Underlying Case Diane Patterson died in a trucking accident when a truck driven by Charles Hitchens (Driver) rear-ended her car while stopped.  Allegedly, Driver tested positive for cocaine metabolites.  Patterson’s family, including her estate, husband,

Posted in Uncategorized

Eleventh Circuit Finds No Bad Faith in Multiple-Claimant Claims-Handing Situation

In a new decision, Mesa v. Clarendon National Ins. Co., 2015 WL 5059496, 2015 U.S. App. LEXIS 15203 (11th Cir., Aug. 28, 2015), the Court of Appeals found that the insurer’s claims-handling of multiple claimants did not rise to the level of bad faith under Florida law.   The decision affirmed the district court’s ruling granting summary judgment in favor of the carrier, and it provides valuable lessons to insurers handling sometimes difficult multiple-claimant scenarios. Mesa was one of four parties injured in an April 3, 2006 automobile accident caused by Cesar A. Vega Zelaya.  The bodily injury liability limits under the policy were $10,000 per person and $20,000 per accident.  The carrier received notice of the accident on April 24th

Posted in Uncategorized

Eastern District of Texas Rules that Insurer’s Delayed Acceptance of the Duty to Defend Constitutes a Breach of that Duty

In Yowell v. Seneca Specialty Ins. Co., 2015 WL 4575450, 2015 U.S. Dist. LEXIS 98719 (E.D.Tex., Jul. 28, 2015), the Eastern District of Texas ruled that an insurer’s unexplained, 140-day delay in agreeing to defend its insured constitutes a breach of the duty to defend.  As a consequence, the court ruled that the insurer had waived its right to control the defense, though it did not lose the right to contest the reasonableness and necessity of the attorney’s fees subject to reimbursement. Factual and Procedural Background Plaintiffs Barry and Rebecca Schneider (the “Schneiders”) filed a lawsuit against David Yowell and David Yowell Construction, LLC (collectively “Yowell”) asserting claims for breach of contract, fraud, and violation of the Texas Deceptive Trade

Posted in Uncategorized

Colorado Supreme Court: Indefinite, Future Assignment of Insurance Proceeds Unenforceable Against Insurer

It is not uncommon for injured persons to assign their rights to insurance proceeds to a third party, and the enforceability of those assignments has been the subject of frequent litigation around the country.   In the most recent development on this topic, Allstate Ins. Co. v. Medical Lien Mgmt., 2015 CO 32, 2015 WL 3378141, 2015 Colo. LEXIS 447 (Colo., May 26, 2015), the Colorado Supreme Court held that an injured person’s assignment to a medical lien company was not enforceable against the insurance company. In Allstate, an individual, Martinez, was injured in a car accident with Allstate’s insured.  Martinez entered into an agreement with Medical Lien Management (MLM) in which MLM agreed to pay for Martinez’s medical treatment in

Posted in Uncategorized

Alabama’s High Court: No Contract Means No Bad Faith

In many states, pleading and proving the existence of a valid contract is necessary for both a breach of contract cause of action and also for a viable bad faith claim, and the Alabama Supreme Court addressed exactly that issue last year in Alfa Life Ins. Corp. v. Kolza 159 So.3d 1240 (Ala., Aug. 22, 2014). The case involved a life insurance claim.  The plaintiff’s decedent had applied for a policy and filled out an application that misstated his driving record.  He then received a “Conditional Receipt” that afforded $100,000 in coverage while the application was pending.  He was subsequently given a medical examination that disclosed high cholesterol levels and a family history of heart disease.  He died in an

Posted in Uncategorized

Sixth Circuit Refuses to Create a Cause of Action for Reverse Bad Faith

In an opinion handed down last week, the Sixth Circuit Court of Appeals refused to adopt a new cause of action under Kentucky law for a reverse bad faith claim by an insurer against its insured where the Kentucky Supreme Court had not previously done so in State Auto Prop. & Cas. Ins. Co. v. Hargis, — F.3d –, 2015 WL 2081922, 2015 U.S. App. LEXIS 7475 (6th Cir., May 6, 2015).  The Sixth Circuit further refused to certify the question to the Kentucky Supreme Court for review.  Slip Op. at *4-5. At issue in this case was a fire loss sustained to the insured’s, Lori Hargis, residential home.  State Auto Property and Casualty Insurance Company (“Insurer”) insured the home. 

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Indiana Court Dismisses Bad Faith Allegations and Praises Insurer for Timely Claims-Handling

A recent federal District Court decision from Indiana, Autumn Glen Homeowners Ass’n. v. Travelers Ind. Co. of America, 2015 WL 1256391, 2015 U.S. Dist. LEXIS 33317 (S.D. Ind., Mar. 18, 2015) provides insight into both affirmative, good faith adjustment processes and appropriate challenges to a public adjuster’s report which the claimant used to attempt to create a question of fact regarding the insurer’s good faith claims handling.  The court granted summary judgment to the insurer on bad faith and breach of fiduciary duty issues while striking the public adjuster’s affidavit. The case continues only on the breach of contract issues. The underlying claim involves a common problem in adjusting a roof hail damage loss.  In this case the loss was

Posted in Uncategorized
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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