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Subrogation recovery did not violate the made-whole-rule and was not in bad faith per Wisconsin Sup. Ct.

It is highly unusual to find an insurance bad faith case which stems from an insurance company’s subrogation recovery. On July 6th, Wisconsin’s highest court had such a case, reversing the appellate court and holding that Dairyland Insurance Company’s subrogation recovery did not support a breach of contract action and its conduct was not in bad faith. Dairyland paid its insured Dennis Dufour his uninsured bodily injury policy limit of $100,000 and $15,598 for 100% of his property loss after he was injured in a motorcycle accident caused by an insured of American Standard. Dairyland then pursued American Standard for subrogation in connection with its $15,598.86 property damage payment. As a result of the subrogation action, American Standard paid $100,000

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Posted in Bad Faith

Arizona Court of Appeals Finds No Implied Waiver of Insurer’s Attorney Client Privilege by Defending a Bad Faith Case Based on Subjective Good Faith Defense

  A recent Arizona Court of Appeals decision, Everest Indemnity Insurance Company v. the Hon. John Rea, Judge of Sup. Ct of State of Az., 2015 WL 195450, addresses the attorney-client privilege in a bad faith case.  Everest examines a highly fact sensitive and jurisdictionally specific issue of when an “implied waiver” of the attorney-client privilege occurs, even though the insurer has not asserted advice of counsel as a defense to a bad faith claim.  The Court held that as long as the insurer had not put the legal advice that it received at issue in the pending litigation, an insurer defending against a bad faith case based on its subjective good faith, did not waive the attorney client privilege. 

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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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