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Seatback Failures
Front occupant seatbacks play a vital safety role in rear-end crashes, similar to the purpose of airbags and seatbelts in frontal impacts. In a rear impact, a front seat should be designed to absorb energy and contain the occupant in the front seating space. Weak, defective front seats can fail, collapse and cause front occupants […]
Nationwide Fighting $18 Million Judgment in Bad Faith Case
Nationwide Mutual Insurance Co. was recently found guilty of insurance bad faith practices and ordered to pay $18 million in punitive damages.
The lawsuit, which took place over several years, involved a couple who was given an improperly-repaired Jeep Cherokee, which later on proved defective, causing an accident. There were no serious injuries or fatalities, but not only was the couple put into direct danger by the insurance company’s actions, but they Nationwide took extensive and repeated steps to hide evidence and facts.
Nationwide is appealing the decision, but in the initial ruling, the judge agreed with the plaintiffs that the insurance company’s actions were reprehensible and illegal by almost every definition.
Part of the reason that the judge awarded $18 million in damages is because of the excessive distance Nationwide went in order to fight the claim. The cost to replace the Jeep in the first place would have been just $25,000, but Nationwide pushed for the improperly-performed repairs, and then spent over $3 million delaying it in court. There were dozens of points along the road where Nationwide could have owned up and settled, but because they fought so aggressively, the judge took no pity on them.
According to the judge, Jeffrey K. Sprecher, “fortunately, no one was killed or injured; but Nationwide knew there could be a subsequent accident when it permitted the vehicle to be returned with hidden structural repair failures. This, by definition, is a reckless indifference to its insured. Nationwide was willing to risk the Bergs’ lives to save itself money on a collision claim.”
The entire point of insurance policies is to protect common citizens from expensive one-time accidents, and they serve a valid function, but when an insurance company specifically puts your family into harm’s way in order to save a small amount of money, is there any stone you wouldn’t turn to obtain justice?
Luckily, you always have legal recourse. With an experienced attorney on your side, you can make sure that every step is taken to protect the ones you love.
Source: http://www.insurancejournal.com/news/east/2014/07/14/334530.htm
How to Appeal Insurance Cases
When the vast majority of people hear the term “insurance policy,” they groan internally. Whether this is due to insurance policy prices, the fact that they are often required, or how difficult it can be to deal with insurance companies when you need to make a claim, the fact is that insurance is rarely fun.
Further compounding the issue, insurance companies will often engage in bad faith practices, which are when they will knowingly try to get out of paying a valid claim using unethical and illegal means.
Thankfully, when this happens, you do have legal recourse to seek damages. It can be tricky, but there is always a way to continue the fight.
If the insurance you were filing a claim against was provided to you by work, it’s likely that your claim is covered under the ERISA (Employee Retirement Income Security Act), which means that all appeals through your work must be completed before any lawsuit can be filed. Under most other types of insurances, however, you can file a lawsuit right away.
Dealing with insurance companies is never easy, especially once they are backed into a corner, but if you have a talented and experienced insurance bad faith attorney on your side, you might be surprised just how many legal rights you have.
How to Deal With Insurance Adjustors
Although bad faith lawsuits are extremley complex, the concept of insurance bad faith is a simple one: When you sign up for an insurance policy, there is a reasonable expectation that your insurance company will conduct itself with “good faith and fair dealing.” In Arizona, your insurance company is bound to refrain from any action which would impair the benefits to which its insured had a right to expect from the insurance policy.
One thing to keep in mind is that Arizona does not recognize true “third party” bad faith so you only have these protections against your own insurance company’s unfair claims handling.
While it is not unusual for individuals to disagree with adjustors about how much their claim is worth, bad faith only really comes into play when you notice that an adjustor is dodging any questions or concerns about why a claim is worth what they say, or if they are unexpectedly denying your claims without any reasonable basis. If your adjuster is ignoring evidence that should have been included in the proper, fair evaluation of the claim, this could be bad faith claims handling practicies.
When this happens, it is never a good idea to mention the term “bad faith” in conversation with the insurance agent or adjustor or to threaten bad faith. If you do so, the insurance company will argue that you “set it up” for bad faith even if that is absolutely false. Instead, you should simply make sure that you document and confirm every conversation in writing. Do not give the insurance company any excuses for its unfair claims handling and promptly respond to all reasonable requests from your insurance company.
If the unfair claims handling continues, you should immediately seek legal counsel. Your attorney will be able to go over all your legal options with you, as well as spur the insurance companies to action in most cases.
AIG to Pay Over $7 Million in Bad Faith Case
These days, everyone is familiar with insurance companies trying to do whatever they can, legally or illegally, in order to avoid or reduce benefit payouts.
Oftentimes, though, when the actual details of how insurance companies attempt to avoid paying are presented to a jury, they react with horror.
In one recent bad faith insurance lawsuit, which involves a disability claim that has been ongoing since 1998, an insurance consumer was awarded with more than $7 million (plus attorney fees and court costs) after receiving an initial $3.1 million disability verdict back in 2003.
The case in question involved an attorney who was hit by a bus back in 1998, and his multi-year battle with AIG, who not only lied and claimed that he was drunk and leaped out into traffic, but also coached the bus driver in how he should change his story about what really happened.
The disabled party ended up receiving a verdict of $3.1 million in benefits for his disability claim as a result of the lawsuit, which the jury reduced to $2.2 million for comparative fault because they agreed with AIG’s false version of events. However, the reduction was not enough for AIG, so it ended up appealing the case. AIG’s appeal successfully delayed the case for years. However, in 2008, the appeals court upheld the full $3.1 million verdict.
At that point, the insurance consumer filed a bad faith lawsuit against AIG for its underhanded tactics.
During the bad faith lawsuit, the judge found that AIG not only fabricated a completely false (but more believable) version of the accident, but also suppressed evidence that would have worked against them. In addition, AIG staged a mock deposition for the bus driver, training him in how he should respond with his modified testimony. “This is an egregious case,” the judge wrote. “The unfair claims settlement practices that AIGCS and AIGTS committed in their dealings with the Andersons were not mere oversights. They were deliberate or callously indifferent acts designed to conceal the truth, improperly skew the legal system and deprive the Andersons of fair compensation for their injuries for almost a decade.”
As a result of AIG’s underhanded attempt to avoid paying a legitimate disability claim, AIG ended up paying out well over 3 times what the initial disability benefits should have been.
ING U.S. Settles Dispute with Regulators
In a move to reform business practices in the life insurance industry, another major life insurance company has agreed to settle with insurance regulators in several states.
ING U.S. has agreed to settle the dispute and has been ordered to pay $10.7 million, an amount that does not include any penalties, fees or fines.
Insurance regulators have alleged that ING used the Social Security Administration’s data base of deceased people known as the “death master file”, to stop making annuity payments to dead customers, but then failed to search for beneficiaries of life insurance policyholders who had died.
A multi-state task force was created earlier this year by the National Association of Insurance Commissioners to examine practices by the forty largest life insurers in the United States. According to the Florida Office of Insurance Regulation, these forty insurers represent 92 percent of the life insurance market.
Michael Consedine, Pennsylvania Insurance Commissioner, said, “Like the companies before them, our investigation showed that ING was not using available information to identify policyholders who have died, in order to pay their beneficiaries.” Consedine also commended ING for cooperating with regulators and for their willingness to correct its practices and “fulfill its promises to its policy holders.”
The lead states in the investigation were Florida, California, North Dakota, New Hampshire and Pennsylvania. Currently agreements with seven life insurance companies have resulted in claim settlements that total more than $173 million paid to beneficiaries and more than $800 million given to states to assist regulators with the task of locating beneficiaries.
“ING,” according to spokesman Joseph Loparco,” in reaching this agreement, expressly denied any wrongdoing or violation of law.” ING will from this time forward use the “death master file” to identify and pay death claims on a uniform and timely basis.
Role of Bad Faith Insurance Lawsuits in Improving Insurer Policies
When an insurance company unfairly refuses to pay an insurance policyholder for a legitimate insurance claim, the insurance policyholder can sue the insurer for damages that can potentially amount to much more than insurance benefits owed under the policy. Victims of insurance bad faith may be entitled to recover consequential damages, emotional damages, attorneys’ fees and, in some circumstances, punitive damages or other special damages. See Filasky v. Preferred Risk Nut. Ins. Co, 152 Ariz. 591 (1987); Rawlings v. Apodaca, 151 Ariz. 149, (1986); and A.R.S. § 12-341.01.
Some may see the extent of recoverable damages as a windfall for policyholders, but these damages actually play an important role in compensating victims of insurance bad faith and preventing insurers from cheating policyholders with legitimate insurance claims.
Allowing victims of bad faith lawsuits to collect damages above the amount of the benefits allowed pursuant to the insurance policy reflects the special nature of insurance contracts. Insurance agreements are not simple business contracts for the purchase of a mundane service. Insurance contracts are supposed to provide insurance consumers with peace of mind from losing their property due to accidental catastrophe; making them personal agreements.
Given the special relationship insurance companies have with insurance consumers, insurers also owe special duties to their insurance customers. An insurance company owes a duty of equal consideration, fairness, and honesty to the insurance policyholder.
Additionally, if insurance policyholders were only allowed to recover the amount rightfully owed to them, insurance companies would have little incentive to pay out legitimate claims. Many insurance companies would intentionally delay or low ball claims because at worst, the insurance company would need to pay the insurance benefits that it should have paid in the first place. These insurers would be more inclined to withhold payment of claims and make the insurance policyholder sue them to recover the insurance benefits owed under the insurance policy.
All these reasons highlight that a bad faith insurance lawsuit and damages help the insured recover what they are rightfully entitled to and also acts as a deterrent to bad faith acts by insurance companies.
Arizona Court of Appeals Gives Guidance on Negligent Misrepresentation and Insurance Consumer Fraud
In the case of Larkey v. Health Net Life Insur. Co., (June 2012) the insured, Alan Larkey, had a policy with Blue Cross Blue Shield for personal health insurance. However, Larkey decided that he wanted to switch providers to get a lower deductible without compromising his coverage. Larkey had a family member research health insurance policies; and an insurance agent (“Eddy”) from Health Net told the family member that a Health Net policy would be “just as good” as the Blue Cross Blue Shield policy Larkey owned. Upon hearing this Larkey contracted with Health Net, although he did not receive a copy of the insurance policy at the time of the transaction.
Over 8 years after switching insurers Larkey developed Hepatitis C and needed to undergo liver transplant surgery. However, Larkey was denied pre-certification because his policy specifically excluded this procedure, although his former coverage would have covered it. Larkey then filed a lawsuit alleging negligent misrepresentation and other claims including violation of Arizona’s Consumer Fraud Act against the insurance agent and insurer. The defendants alleged that the statement that their policy was “just as good” as the Blue Cross policy was vague and could not specifically mean that it was the same coverage under both policies. However, the Arizona Court of Appeals ruled that the statement was enough to give an average consumer the expectation that the policy was the same.
The court also went to lengths to explain that the mere fact that a consumer can reveal whether a statement is true or false based on their own investigation is not enough to limit their right to sue a company for misrepresentation and consumer fraud. The term “deceptive” as used in Arizona’s Consumer Fraud Act has been “interpreted to include representations that have a tendency and capacity to convey misleading impressions to consumers even though the interpretation that would not be misleading also are possible.” “The meaning and impression are to be taken from all that is reasonably implied, not just from what is said . . . and in evaluating the representations, the test is whether the least sophisticated reader would be misled.”
The court went on to explain that a claim for negligent misrepresentation may be based on false information given in the form of an opinion. Restatement (Second) of Torts § 552 cmt. b. (“The rule stated in this Section applies not only to information given as to the existence of facts but also to an opinion given upon facts equally well known to both the supplier and the recipient.”). The court held that “under such circumstances, including the fact Eddy was a licensed agent with expertise in recommending health coverage policies, Larkey was entitled to rely on Eddy’s representation the Policy was “just as good as” his Blue Cross policy without conducting his own investigation.” “In the absence of circumstances putting a reasonable person on inquiry, a person is justified in relying on a misrepresentation of a material fact without making further inquiry.” St. Joseph’s Hosp. & Med. Ctr. v. Reserve Life Ins. Co.
This case is helpful for consumers because it shows that insurance agents, who hold themselves out as someone with superior knowledge in the realm of insurance, can be held accountable for failing to investigate and evaluate insurance policies properly. And, insurance companies cannot hide behind vague assurances of coverage then later claim that the language was not certain enough to mislead a consumer. Although keep in mind that insurers are allowed a certain amount of “puffery” so statements like low insurance rates and broad coverage are probably not enough to warrant coverage for specific issues.
Federal Court Says Bad Faith Insurance Denial Can be Brought Against Insurance Adjuster
A recent federal district court case tackled the issue of whether an Arizona insurance adjuster may be personally sued for bad faith insurance claim denial.
The case started on March 4, 2011 when Frank Gambrell collided with another vehicle on an Arizona freeway. Gambrell sustained serious injuries in the accident; his medical expenses totaled more than $87,000 and he lost more than $6,000 in wages from not being able to work. Gambrell filed a claim under multiple insurers, all of which accepted his claim except for his own personal auto insurer, IDS Property Casualty Insurance Co. After requesting reconsideration and being denied twice, Gambrell brought a lawsuit alleging bad faith denial of insurance coverage and breach of contract. Gambrell sued both IDS and the claims adjuster assigned to the case, Stacey Harrish. The defendants moved to dismiss the portion of the lawsuit against Harrish because it argued that the insurance adjuster could not be sued for a breach of the covenant of good faith and fair dealing.
Judge John W. Sedwick of the U.S. District Court for the District of Arizona ruled that Arizona law does not clearly allow or prevent an insured from bringing a claim for bad faith denial of insurance coverage. The judge noted that bad faith denial claims are based on the terms of an insurance contract to which only the insurer and insured are parties. However, the court noted that the Arizona Court of Appeals has held that the insurer and agent (the claims adjuster) are “engaged in a joint venture” which binds the adjuster to the same duties owed by the insurer. This case is helpful for policyholders because it potentially allows insureds to avoid diversity jurisdiction if the insurance claim adjuster is a citizen of Arizona and thus eliminates insurance carriers’ ability to remove bad faith lawsuits to the federal court system.
The case is IDS Property Casualty Insurance Co. v. Gambrell, Docket Number 2:12-cv-01227 .
Ninth Circuit Allows Securities Claim in Insurance Bad Faith Lawsuit
Earlier this year the Ninth Circuit held that the Securities Litigation Uniform Standards Act of 1998 (SLUSA) does not preclude state class actions alleging breach of contract and insurance bad faith . Freeman Investments, LP v. Pacific Life Insurance Co., No. 09-55513, 2013 WL 11884 (9th Cir. Jan 2, 2013).
In Freeman the Plaintiffs purchased variable universal life insurance policies from Pacific Life Insurance. The policies allowed the policy holders to share in gains as well as losses from the insurer’s investment of the premiums generated from the policies. However, Plaintiffs argued that Pacific Life levied excessive charges in the administration of the insurance policies which decreased the amount available for investment.
The lawsuit was filed as a class action on behalf of the life insurance policy holders. The original complaint alleged violation of SLUSA, and various state law claims including breach of contract, breach of duty of good faith and fair dealing, and unfair competition. Plaintiffs argued that Pacific life deviated from industry standards in calculating the cost of insurance. They claimed that Pacific Life debited an amount in “excess of true mortality of charges.”
Because SLUSA precludes state law class actions that allege misrepresentations or fraudulent ommissions in connection with the purchase or sale of covered securities, Pacific Life filed a motion to dismiss and argued that a SLUSA precluded all the other claims.
SLUSA is part of the series of reforms which Congress first passed in 1995 as the Private Securities Litigation Reform Act (PSLRA) that imposed procedural hurdles and heightened pleading requirements on federal securities class actions. Plaintiffs were still allowed to file state law class actions. In 1998 (SLUSA), Congress persisted in its attempt to limit 7th Amendment rights with respect to securities litigation and barred state class actions in connection with the purchase or sale of covered securities. SLUSA failed to address and protect genuinely defrauded investors, and arguably compounded the 2008 financial collapse of America.
The district court granted Pacific Life’s motion, but only after twice giving the plaintiffs leave to amend to remove all references to systematic concealment and deceitful conduct. On review the Ninth Circuit agreed that the state law claim for unfair competition was precluded by SLUSA because it was dependent on allegations of misrepresentations and omissions in connection with the sale of the life insurance policies. However, the court ruled that the claims for breach of contract and violation of good faith and fair dealing involved issues relating to insurance industry accepted standards, did not rest on misrepresentation or fraudulent omission, and were not preempted by SLUSA. The 9th Circuit reversed the district court’s dismissal of the contract claims provided that the plaintiffs amended their complaint to remove any reference to deliberate concealment or fraudulent omission.
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The Arizona personal injury, accident, and insurance bad faith dispute lawyers at the Law Offices of Shane L. Harward PLC represent insurance, personal injury and accident victims throughout the state of Arizona (AZ) including, but not limited to, Phoenix, Scottsdale, Mesa, Tempe, Chandler, Glendale, Gilbert, Sun West, Sun City, Tucson, Flagstaff, Kingman, Bullhead City, Yuma, Lake Havasu, Fountain Hills, Anthem, Ahwatukee, Carefree, Cave Creek, Gold Canyon, Bisbee, Sierra Vista, Cochise, Paradise Valley, East Valley, Maricopa, Pima, Pinal, Gila, White Mountain, Heber, Payson, Prescott, Forest Lakes, Apache Junction, Avondale, Queen Creek, Benson, Black Canyon City, New River, Buckeye, Casa Grande, Coolidge, Cottonwood, Douglas, Florence, Gila Bend, Goodyear, Greer, Glendale, Lakeside, Guadalupe, Holbrook, Huachuca City, Oro Valley, Overgaard, Avra Valley, Parker, Peoria, Pinetop, Pine, Prescott Valley, Quartzite, Strawberry, Safford, Show Low, Sun City West, Sun Lakes, Superior, Surprise, Snowflake, Tombstone, Wickenburg, Winslow, Wilcox, Williams, Young, Youngtown, and surrounding areas.