Bad Faith

Defending direct attacks on our clients.

Overview
An increasing number of policyholders are quick to advance claims for breach of the covenant of good faith and fair dealing and statutory “bad faith”, to leverage their theories of liability against insurers.


These claims emanate from a variety of circumstances, including:

  • Claims handling
  • Coverage denials
  • Responding to settlement demands


Whether based on contract, tort, statutory or common law theories, these contentious extra-contractual claims – and the lopsided remedies they offer – all require an aggressive defense. Our attorneys ensure that the courts know there are two sides to the story.

We draw upon our experience, creativity, and diligence to ensure our clients' side of the story is heard. By providing our clients with both a strong offense and tight defense, we aim to bring “bad faith” claims to early resolution, and if necessary, aggressively litigate them to conclusion. 

Our attorneys are proactive so that our clients are not reactive.  By providing clients in-house seminars on claims handling, and by keeping abreast of the latest developments in “bad faith” law and practice, we work with our clients to develop guidelines to ensure a prompt and proper response to the claims they face.

EXPERIENCE

    Case Study

  • Coverage Denial Upheld Under Bill of Lading Exclusion

    Nicolaides secured a summary judgment victory for a national insurer in a high-stakes coverage and bad faith dispute arising from a trucking accident and the interpretation of a transportation broker liability policy. The decision is believed to be the first in the United States to interpret a bill of lading exclusion in this type of policy.

  • Defended insurers in state court coverage action concerning $50 million dispute over defense and indemnity under CGL policies, which included claims of bad faith.
  • Defended insurers in state court coverage action concerning $60 million dispute over CGL coverage for environmental mass tort claims, which included claims of bad faith.
  • Litigated and successfully resolved complicated Missouri garnishment action for alleged insurer bad faith with respect to insured's execution of covenant-not-to-execute judgment for claimant after insured admitted liability and stipulated to reasonableness of damages award.
  • Obtained summary judgment for insurer in declaratory judgment action, seeking estoppel and bad faith findings, arising out of insurer's refusal to defend premises liability claims under insured employer's workers' compensation/employer's liability policy.
  • Obtained dismissal of claims against insurer for alleged breach of the duty to settle; convinced court that, under Illinois law, insurer could not be liable for an excess judgment where the underlying claimant made no settlement demand within policy limits and could not establish a substantial probability of damages in excess of limits.
  • Won jury verdict for excess insurers, finding they acted in good faith when they rejected claimant's unreasonable settlement demands in the underlying personal injury lawsuit, even though the claims resulted in a $30 million judgment, which exceeded clients' limits.
  • Defended insurers in state court CGL coverage and bad faith action concerning $20 million coverage dispute involving mass-tort claims policies.
  • Successfully resolved California coverage litigation involving nuanced issues of the right to independent counsel, client's alleged bad faith, and equitable contribution between insurers providing CGL and E&O coverage through favorable settlement.
  • Obtained dismissal of fraud claims brought under Michigan law against insurer over alleged misrepresention to claimant that insurer would not contribute to the settlement of the underlying claims.
  • Resolved claim alleging insurer's failure to settle and raising priority-of-coverage and allocation issues following multimillion-dollar "run-away" verdict.
  • In a case of first impression, secured summary judgment for client over bad-faith claims involving alleged failure to settle underlying railroad-crossing accident case, in which client only offered the insured's $5 million retention, followed by a $54 million verdict.
  • Obtained partial summary judgment in Illinois federal court for liability insurer on policyholder's statutory bad-faith claims (Illinois Insurance Code Section 155) by establishing a bona fide coverage dispute precluding finding that insurer's actions were vexatious or unreasonable.
  • Successfully resolved coverage, allocation and bad faith allegations for insurer client at mediation.
  • Defended insurers in state court in a multimillion-dollar coverage dispute concerning CGL policy where there are claims of bad faith and allegations that the insurers owe a duty to defend and indemnify. Obtained favorable settlement.
  • Obtained favorable court rulings and, ultimately, settlement in defending insurer in $20 million coverage dispute in state court arising out of alleged Ponzi scheme and employee dishonesty, including bad faith claims.
  • Won jury verdict on insurer's cross-claim against insured in bad faith litigation, that insured fraudulently pursued fire loss and obtained criminal restitution award.
  • Obtained affirmance of summary judgment finding insured breached policy terms and insurer's claim handling did not constitute bad faith.
  • Obtained dismissal with prejudice for insurer in federal court action involving a multimillion-dollar fidelity claim, including bad faith allegations, arising from employee dishonesty at non-profit organization.
  • Represented insurer in million-dollar bad-faith coverage litigation involving claims that insured protective clothing manufacturer misrepresented facts in its application.
  • Successfully litigated matter related to the failure of an independent physicians' association and lawsuit presenting a $10 million E&O and D&O claim on behalf of syndicate of London market insurers, and settled dispute for a fraction of the exposure.
  • Obtained favorable settlement after strategically litigating certain aspects of coverage action involving alleged claim-handling errors and legal malpractice on behalf of a syndicate of international and domestic insurers faced with $100 million in bad-faith exposure.
  • Convinced jury that insurer did not act vexatiously in denying coverage for the underlying lawsuits over the insured internet provider's alleged wrongful utilization of customers' private information.
  • Assisted in obtaining favorable settlement for insurer in bad-faith litigation over underlying civil RICO settlement of $19 million.
  • Secured summary judgment over claimant's $7 million consent judgment on the basis that it was executed without the insurers' consent, breaching policy conditions, resulting in dismissal of $70 million bad-faith and punitive-damages claim; affirmed by the Eleventh Circuit.
  • Successfully prosecuted excess insurer client's bad-faith claim against primary carrier for failure to settle and obtained mid-seven-figure settlement for client.
  • Secured summary judgment on basis that client did not violate eight different provisions of Kentucky's Fair Claim Handling Act, including a failure to settle and misrepresentation of policy terms; affirmed by Kentucky Appellate Court.
  • Resolved breach-of-contract and bad-faith claims against insurer who allegedly owed a duty to defend and indemnify an additional insured in connection with underlying lawsuit over catastrophic mountain-bike accident.
  • Advised client as to coverage for fatal accident involving insured's grain storage system in Mexico.
NEWS & INSIGHTS