MAY 2015 BAD FAITH CASES: CONTRACTUAL AND STATUTORY BAD FAITH MAY BE SUPPORTED BY EVIDENCE THAT AN INSURER MADE A MISREPRESENTATION OR FAILED TO COMMUNICATE WITH INSURED DURING A MEDIATION, IF THAT ACTION OR INACTION CAUSED THE INSURED TO MAKE A PERSONAL CONTRIBUTION TO A SETTLEMENT WITHIN POLICY LIMITS; THOUGH THE INVITATION TO CONTRIBUTE ITSELF WAS NOT ACTIONABLE IN THIS CASE (Western District)

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This is a reposting link for our Saturday May 9, 2015 post.

Chief Judge Conti of the Western District provided a detailed analysis of potential bad faith issues that might arise during settlement negotiations/mediation of a third party claim, where the insured (represented by personal counsel at the mediation) is involved in potentially or actually contributing personal funds toward a settlement, and negotiating with the underlying plaintiff and the insurer to reach a settlement figure.  The court also provided a detailed analysis of contractual (Cowden) bad faith claims where there is no actual excess verdict.

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