APRIL 2012 BAD FAITH CASES: COURT STRIKES INSURED’S BAD FAITH LIABILITY EXPERT REPORT AS UNTIMELY, BUT DENIES SUMMARY JUDGMENT ON BAD FAITH WHERE MATERIAL ISSUE ON WHETHER CLAIMS UNDERVALUED (Western District)
In Craker v. State Farm Mutual Auto Insurance Company, the court heard the carrier’s motion for summary judgment on the insureds’ bad faith claims. The original suit arose from a 2007 car accident in which the insureds were injured. After the carrier refused to pay an additional $200,000 in underinsured motorist coverage (“UIM”), offering at most $113,700.00, the insureds filed suit alleging breach of contract and bad faith.
The carrier argued that the insureds’ bad faith claims were meritless because the dispute merely arose over difference of opinion on the value of the claim. However, the court disagreed, finding that one of the insured parties was fired from his position as a laborer because of the injuries he sustained, preventing him from earning a similar salary elsewhere without a college degree.
Yet, the carrier valued the insured’s lost wages as a total lack of employment for two years, followed by a return to the same type of employment he had before the accident. The court ruled that there was no reasonable basis for this evaluation indicating a decision that may amount to bad faith to a reasonable jury. The court also ruled that the other insured party injured in the accident was unreasonably denied benefits because the carrier refused to adjust the award after she received hip surgery. As such, the court denied the carrier’s motion for summary judgment.
However, the court did grant the carrier’s motion to strike the report and testimony of the insureds’ bad faith expert. At a Post-Discovery Status Conference, the insureds did not indicate that they needed any further experts to move forward with this case. However, they claim that they did not realize the need for such an expert until after the carrier filed for summary judgment. The court disagreed and refused to permit the expert testimony.