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In Alabama, Bad Faith Claim Defeated As A Matter Of Law Though Basis For Coverage Denial Was Debatable

A policyholder’s tort claim for the bad faith refusal to pay a claim was dismissed as a matter of law where a legitimate dispute existed as to coverage liability at the time of the coverage decision by the U.S. District Court for the Northern District of Alabama, Southern Division.  See Alabama Gas Corporation v. Travelers Casualty and Surety Company, et al., Case No. 2:10-CV-01840-IPJ, Document No. 214, June 25, 2013.  Although forty-four (44) states previously decided that a Potentially Responsible Party Notice from the EPA constitutes a “suit” that triggers an insurer’s obligations under a liability policy, the insurer here denied the claim contesting that a PRP notice was not a “suit.”   At the time of the denial, Alabama courts

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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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