A Bad Faith Gamble – Insurance Company’s Risky Failure to Pay $25,000 Demand Results in Exposure to Payment of $5 Million Verdict

Published May 20, 2018 by Bruce Millar
A Bad Faith Gamble – Insurance Company’s Risky Failure to Pay $25,000 Demand Results in Exposure to Payment of $5 Million Verdict

If a trial court judge grants a motion for summary judgment, it essentially serves to dismiss the case in question. The legal world sees it as a sweeping action and should only take place when all of the questions of law within the case have been answered and there is nothing left for the jury to decide.

The law generally understands the limitations of us human beings as individuals – including judges – and will often defer to the wisdom of what practitioners call “the enlightened jury” who has heard the facts and the testimony.

In This Case: Followed by the case number.

Here is a summary of the case that demanded the help of a jury; Hughes v. First Acceptance Ins. Co. of Ga., Inc., 343 Ga. App. 693 (2017). In 2008 a five-vehicle collision resulted in not only the death of the person who caused the accident, but also injuries to others. One of the victims sued on behalf of herself and her minor child who sustained traumatic brain injury as a result of the accident.

Nearly a year later, the victim’s attorneys sent two letters via fax to the insurance company’s attorney stating that they wanted to get their case settled within 30 days. When the insurance company did not respond to the plaintiff’s request to settle, the injured parties filed suit. Eventually, the victimized family was awarded $5 million dollars for their loss.

In Georgia, the law allows victims to collect the entire verdict if an insurer is found to be guilty of bargaining in bad faith. Ultimately, the Georgia Court of Appeals was called upon to referee this battle between rightful claimants and a high-powered insurance company.

The victims then sued the insurance company to collect the $5 million verdict. The initial result of this second lawsuit was that the trial court granted the insurance company’s motion for summary judgment, holding that there was no evidence that the insurer knew or could have reasonably known that there was a 30-day deadline to settle the claim or that they could have settled the matter within the limits of the policy.

The victims appealed, and the Georgia Court of Appeals sent the case back to the Trial Court, ruling that a Jury should determine whether the insurance company acted in bad faith in not settling the claim or if the victim’s letters through their attorneys actually constituted a demand for settlement. In the end, the Insurance Company stood exposed to possibly paying the entire $5 million verdict, instead of the mere $25,000 it could have paid had it not stubbornly dragged out the claim.

Subtitle: Ask the experts.

Before you make a demand or settle any serious injury or wrongful death claim with an insurance company, be sure that you have the advice of an attorney who is looking out for your best interest. The larger your loss, the more important it is that you have an advocate experienced in dealing with adversarial insurance companies.