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Posted in: Dunnion in the news

Major Auto Insurer Pays Six-Figure Award In Bad Faith Case

Jan 7, 2019

Monterey, CA – In a rare legal occurrence, Dunnion Law, a Monterey-based personal injury firm, successfully recovered a confidential, six-figure award for bad faith against a major insurance company.

The court ruling serves as acknowledgement that the major insurer acted in bad faith in its response and dealings with its client’s original auto accident claim. Unfortunately, many policy holders are unaware that California law requires insurance carriers to treat their clients with good faith and fair dealing. Instead of seeking legal counsel from a bad faith attorney, many policy holders continue trying to work and get results with their insurance carrier.

During the original accident case, the insurance carrier paid nearly $700,000 for its policy holder’s injuries and damages – albeit, after nearly seven years of the client actively pursuing his claim. The nearly $700,000 settlement, which was significantly delayed by the insurer’s bad faith tactics, is separate from the additional six-figure award recently paid by the insurer as part of the confidential settlement agreement.

Under California law, “bad faith” is typically defined as an insurance carrier’s breach of good faith and fair dealing with its clients. Bad Faith may be found if the client can demonstrate that benefits due under the policy were withheld, and that the reason for withholding benefits was unreasonable or without proper cause. Because bad faith actions can often be subjective and difficult to demonstrate, they are not often filed, and infrequently won.

However, in this case, Dunnion Law successfully demonstrated the nature of the insurer’s bad faith actions to the court. During the original auto accident case, the insurance carrier failed to follow California code 2695.5(e)(3) mandating its investigation and evaluation of the claim within 15 days of the original demand. Dunnion Law sent the demand in April 2014 on behalf of its client.

More than 16 months later in August 2015, the insurance carrier still had not yet started its evaluation, and entered into mediation, only initiating its investigation at the mediation itself. Further, they proposed a $12,000 figure at the mediation without benefit of an evaluation of the client’s injuries and damages, as is appropriate and usual.

Nearly nine months after the mediation, the insurer increased its offer to $120,000, which was less than 20% of the amount of the client’s damages and loss. In addition, the carrier stated they needed a qualified vocational counselor to perform an evaluation of the case, but then never hired one. This act essentially breaches California code Section 2695.7(d) that stipulates the insurer “shall not persist in seeking information not reasonably required for or material to the resolution of a claim dispute.”

Not only did these tactics contribute to years of delay, it forced the client to litigate the case to arbitration. As a result of the arbitration that was handled by Dunnion Law, the client received nearly $700,000 for his injuries and damages - more than 58 times the insurer’s initial offer, and the “bad faith” suit was filed shortly thereafter. The recent ruling on the subsequent ‘bad faith’ case provided the client with an additional six-figure award from the confidential settlement agreement.

 “Consumers should have confidence that the insurance carrier they’ve paid to cover them will act in good faith, and deal with them fairly,” said Connell Dunnion, Esq., Owner and CEO of Dunnion Law. “When that doesn’t happen, Dunnion Law has the legal experience to help protect the consumers’ interests, and hold the insurance carrier accountable.”

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