Archives: Bad Faith

The discoverability of insurance company claims files

I once had a coverage case that involved a claim for environmental contamination at a chicken farm. (Yes. A chicken farm. In New Jersey.) When we were able to pry the claim file loose in discovery, we noticed that the carrier had spent a grand total of $24 to investigate the complex pollution claim, which … Continue Reading

Can an insurance company be liable for bad faith in settling a liability suit?

By Gene Killian on November 27, 2017 Posted in Bad Faith, Bodily injury, Negotiation, Settlement

I like to think I’m pretty fair and impartial in these blog posts. I said that to a friend of mine in the defense bar who apparently reads my ramblings, though, and she laughed at me. I suppose I have a classic case of confirmation bias, where I think that insurance companies often forget what … Continue Reading

Demands for insurance policy limits in a serious liability case

By Gene Killian on May 11, 2017 Posted in Bad Faith, Bodily injury, Excess or umbrella coverage, Settlement

Earlier this month, I was asked by Elizabeth Lorell, an excellent defense lawyer, to speak at a CLE conference sponsored by her law firm. (You can read Elizabeth’s bio here.) The audience consisted of other defense lawyers, and insurance company claims representatives. In other words, I was basically a snake at a mongoose convention. The … Continue Reading

Direct Actions against Insurance Companies

By Gene Killian on September 11, 2015 Posted in Attorneys' fees, Bad Faith, Construction defects, Contract construction, Emerging Trends, Environmental coverage

Labor Day has just passed as I write this, and this summer (that went by too quickly) was a busy one for the New Jersey appellate courts, insurance-wise. The New Jersey Supremes, for example, dealt with a question often posed by our clients in construction defect cases: Namely, can a claimant proceed directly against a … Continue Reading

“Ordinance or Law” Coverage for Costs of Repair

By Gene Killian on February 23, 2015 Posted in Bad Faith, Business Interruption, Construction defects, Contract construction, Property insurance, Valuation, Violation of law

I was saddened to learn that Judge Ruggero Aldisert, formerly of the Third Circuit, recently passed away. I never had the privilege of appearing before Judge Aldisert, and I never met the man, but I feel indebted to him for writing two excellent books that were published through NITA: “Logic for Lawyers” and “Winning on … Continue Reading

Superstorm Sandy and Bad Faith Claims Handling

By Gene Killian on January 9, 2015 Posted in Bad Faith, Claims Investigation, Flood insurance

Representing people who have lost homes and businesses following Sandy has been gut-wrenching. And, I have to say, many of the carriers haven’t made it any easier. I could catalog some of the problems we’ve seen, but that would make this a very long post. Instead, I’d like to focus on one aspect: The use … Continue Reading

Additional Insured Coverage and the Employer’s Liability Exclusion

By Gene Killian on March 3, 2014 Posted in Additional Insured, Bad Faith, Bodily injury, Contract construction, Named Insured, Property insurance

My late Uncle Carmen was an accountant who worked for the IRS. One tax season, I was grousing about how complicated the 1040 form could be. Uncle Carmen didn’t suffer fools gladly, and, with the veins bulging from his neck, insisted that NOTHING ON EARTH COULD BE SIMPLER. My response was to engage in a … Continue Reading

Sandy and the New Jersey Department of Banking and Insurance

By Gene Killian on November 21, 2013 Posted in Bad Faith, Flood insurance, Property insurance, Settlement

As the weeks following Sandy have stretched into months, and the months are beginning to stretch into years, businesses and homeowners with unresolved claims have been asking me whether it’s worthwhile to complain about their carrier to the New Jersey Department of Banking and Insurance (“DOBI”). Truth be told, it’s a complete waste of time. … Continue Reading

Toughening New Jersey’s bad faith law

By Gene Killian on January 28, 2013 Posted in Attorneys' fees, Bad Faith, Emerging Trends

If an insurance company wrongfully denies a third-party liability claim, then, under the New Jersey Court Rules (R. 4:42-9(a)(6), to be exact), if the policyholder has to sue to enforce coverage for the claim, the policyholder is entitled to recover its attorneys’ fees. Due to a weird quirk in the Court Rules, however, a policyholder … Continue Reading

Bad Faith and the Duty to Defend

By Gene Killian on October 15, 2012 Posted in Bad Faith, Duty to defend, Professional Liability

I’m reading a wonderful book right now called “Young Men and Fire,” by Norman Maclean. The book is about a horrific forest fire that took place in Montana in 1949. Amazing how small sparks can result in a conflagration beyond all belief. Those of us involved in the litigation game are familiar with that problem. … Continue Reading

Bad Faith Insurance Claims Handling

By Gene Killian on July 27, 2012 Posted in Bad Faith, Claims Investigation, Evidence, Property insurance

Here’s a question that perhaps should be posed to a magician: How can an insurance company turn an $85,000 claim (on a policy with a $100,750 applicable limit) into an $850,000 bad faith verdict? If you’re Merrimack Mutual, apparently it’s quite easy. I wrote about this case some time ago when the jury verdict first … Continue Reading

Bad Faith and Settlement Negotiations

By Gene Killian on June 25, 2012 Posted in Bad Faith, Claims Investigation, Negotiation, Settlement

Here’s an interesting question recently confronted by the Ninth Circuit: Is it bad faith for an insurance company to refuse to initiate settlement discussions in a third-party context when liability has become reasonably clear? The carrier (Deerbrook, an Allstate company) took the position that bad faith could not exist unless the carrier failed to respond … Continue Reading

Insurance Bad Faith

By Gene Killian on January 31, 2012 Posted in Bad Faith

In ethics or metaphysics, the “law of unintended consequences” states that, for any willed action, there are consequences that occur which are not intended. The concept has long existed, but was named and popularized in the 20th century by American sociologist Robert K. Merton. Merton would have been fascinated by laws that were intended to … Continue Reading

Developments in insurance bad faith law

By Gene Killian on September 22, 2011 Posted in Bad Faith, Emerging Trends

Awhile back on this blog, we were discussing developments in insurance bad faith law, and I hypothesized that Courts were generally more apt to find bad faith in cases involving a carrier’s delay of benefits, rather than outright denial. But what if the outright denial contains a bald-faced lie, or a deliberate omission? In that … Continue Reading

More on the ERISA “arbitrary and capricious” standard

By Gene Killian on August 3, 2011 Posted in Bad Faith, Claims Investigation, ERISA

To many policyholders, ERISA is a government program that simply backfired (sort of like Prohibition). That’s because ERISA considers an insurance company to be a “fiduciary.” Back in 1974, when ERISA was passed by Congress, the lawmakers figured that since the insurance company is a “fiduciary,” it must have the best interests of the injured … Continue Reading

Bad faith law in New Jersey

By Gene Killian on June 6, 2011 Posted in Bad Faith

Got into a discussion recently with some of my policyholder counsel friends. They were lamenting the death of bad faith law in New Jersey. When a carrier unreasonably denies or delays paying a claim, the key case is supposed to be Pickett v. Lloyd’s, 131 N.J. 457 (1993), which was written by the late Justice … Continue Reading

The duty of good faith and fair dealing in litigation

By Gene Killian on May 9, 2011 Posted in Bad Faith

Really good stuff over at Chip Merlin’s blog about what happens when insurance companies and trial lawyers mislead courts.… Continue Reading

The duty of good faith and fair dealing

By Gene Killian on May 3, 2011 Posted in Bad Faith

I’m just back from Orlando where I had the opportunity to speak at an ABA conference on business interruption insurance. During the talk, I referred to a case I often cite, Rawlings v. Apodaca, 151 Ariz. 149, 726 P.2d 565, 1986 Ariz. LEXIS 253 (1986). For me, the key quote from the case is: “In delineating … Continue Reading

More on Business Interruption Insurance

By Gene Killian on April 12, 2011 Posted in Bad Faith, Business Interruption

In the last post, we took a look at the Dictiomatic case, in which the policyholder took a beating for overreaching on a business interruption claim. Turnabout being fair play, let’s now have a look at a recent case in which the insurance company got thumped in the business interruption arena. The case is Amerigraphics … Continue Reading

The insurance company’s duty to negotiate in good faith

By Gene Killian on December 23, 2010 Posted in Bad Faith, Negotiation, Settlement

Needless to say, it can be very dangerous for insurance companies to “roll the dice.” Over at the Michigan Auto Lawyers Blog, Steve Gursten tells the story of an adjuster who showed up 40 minutes late for a mediation, and then wouldn’t go north of $1 million in a catastrophic truck accident case involving serious personal injury. The carrier … Continue Reading

The Unfair Claims Settlement Practices Act

By Gene Killian on October 12, 2010 Posted in Bad Faith

Right now, I’m preparing for a coverage trial involving aspects of both New Jersey and Massachusetts law. I was reviewing the Unfair Claims Settlement Practices Acts (“UCSPA”) adopted in both states, and I noticed the following. The New Jersey version of UCSPA prohibits certain bad behavior if committed “with such frequency as to indicate a general … Continue Reading

Bad faith law in New Jersey

By Gene Killian on September 1, 2010 Posted in Bad Faith

Recently, one of my friends in the insurance defense bar told me that he’d been given a very strict standing order by his insurance company client. In any case involving a potential conflict-of-laws situation, he was prohibited from EVER arguing for the application of New Jersey law. This attitude stems from cases like the New … Continue Reading