Articles Posted in Insurance Company Bad Faith

A popular idiomatic phrase goes something like, “Don’t make a federal case out it!” Generally, “making a federal case” out of something means that it has been built up or exaggerated beyond what is reasonable, but, like most common phrases, there is a nugget of truth behind the words.

For instance, a lawsuit arising from a South Carolina truck accident will tend to be more expensive, more time consuming, and more difficult than a similar action filed in state court. For this reason, it is not unusual for a defendant to “remove” a state case to federal court if the federal court has concurrent jurisdiction. Under certain circumstances, the plaintiff may ask the federal court to remand the case to state court.

As one might expect, all of these legal shenanigans can add months, or even years, to the time it takes the plaintiff to recover fair compensation for personal injuries or a loved one’s wrongful death caused by the negligence of the defendant(s).

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While most people understand that they “need insurance” for certain situations, such as car accident, a house fire, or a slip and fall accident on their premises, few individuals or business owners truly understand all of the different types of insurance that are available, how they differ from one another, and what the best choice may be for a particular situation.

Accordingly, it is not unusual for those who are not insurance professionals themselves to rely heavily on their insurance agent to provide appropriate coverage. When the agent does not provide reliable advice, a South Carolina negligence lawsuit may be possible against the agent or the agency that employed him or her.

Facts of the Case

In a recent (unreported) case from the South Carolina Court of Appeals, the plaintiff was a woman who purchased a policy of commercial automobile insurance for her daycare business in April 2010. After a parent drove a car through the wall of the plaintiff’s business, causing personal injuries to the plaintiff, the plaintiff sought coverage for her injuries. According to the plaintiff, she thought that she had purchased coverage “for every person who went in and out of the building, including herself.” The defendants, the insurance agent and agency from whom the plaintiff purchased her policy, denied her claim.

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Those who have been hurt by someone else’s negligent or reckless conduct should receive fair compensation for their medical expenses, lost wages, and pain and suffering. Unfortunately, not every South Carolina personal injury lawsuit arising from an act of negligence goes smoothly.

Not only is liability often denied (many defendants try to put the blame on the injured person or a third party), but insurance coverage issues can also crop up, making it harder to collect a settlement or judgment even when liability can be proven. In such situations, a bad faith claim against the insurance company is a possibility.

Facts of the Case

In a recent (unreported) appellate court case arising from the Circuit Court of Greenville County, South Carolina, the plaintiff was a limited liability company that operated a saloon. After one of its patrons filed suit against it claiming that she was injured by an unknown person playing a boxing arcade game inside the saloon, the plaintiff sought coverage from the defendant insurance company, from which the plaintiff had purchased a comprehensive general liability insurance policy. (According to the saloon patron, her injuries occurred when she was inadvertently struck and knocked unconscious by an unknown person playing the arcade came.)

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When a loved one’s death is caused by another’s negligence or wrongful death, a South Carolina wrongful death lawsuit is a possibility for those left behind.

Unfortunately, proving a wrongful death claim against the defendant may be only a part of the process of the decedent’s family receiving fair monetary compensation.

In some cases, obtaining a payout from the defendant’s insurance company may be as problematic as obtaining the verdict or judgment against the defendant.

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In a typical South Carolina car accident lawsuit, it is the injured driver or passenger who files suit. However, this is not always the case. Sometimes, an insurance company files what is called a “declaratory judgment action” in order to seek the court’s guidance as to the applicability and/or extent of coverage of a particular claim or set of claims. Such was the situation in a recent appellate case involving a fatal crash that allegedly followed a police chase in Anderson County, South Carolina.

Facts of the Case

In a case filed in the Anderson County Circuit Court and considered by the South Carolina Court of Appeals, the plaintiff was an automobile accident liability insurance company that sought declaratory relief following a fatal, one-vehicle accident that occurred in 2008. According to the plaintiff, its insured and two other individuals were riding as passengers in the vehicle at the time of the crash; one of the passengers was killed, and the insured and the other passenger were catastrophically injured. The driver, who was apparently not a party to the civil lawsuit filed by the plaintiff insurance company against the defendant insured and passengers, was the defendant in a separate criminal case in which he pled guilty to reckless homicide (a felony offense in South Carolina).

According to the plaintiff, the insurance policy in effect at the time of the accident had an exclusion for bodily injury caused by anyone who was operating the covered vehicle while committing a felony or fleeing from a law enforcement officer. The trial court found that the provisions at issue were unenforceable because (1) the insurance company had failed to inform the insured of the exclusions or otherwise place them conspicuously on the insurance policy; (2) the exclusions were ambiguous; and (3) the exclusions violated the state’s public policy of protecting innocent insureds,
namely the three passengers who were deemed not at fault in causing the collision.
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A successful legal claim following a serious personal injury or loved one’s wrongful death requires several steps. First and foremost in any South Carolina personal injury lawsuit, the party seeking to recover money damages for another’s failure to act in a reasonably prudent manner must be able to prove that the defendant breached a duty of care owned to the plaintiff, thereby proximately causing him or her legal damages.

While the plaintiff will not be able to recover money damages without proof of the elements of negligence, it is equally true that proof of negligence will not necessarily result in a successful judgment or settlement. One reason for this is that most defendants in negligence cases do not have the independent means to compensate the negligence victim or his or her family.

Rather, most individuals (and businesses and governmental entities, as well) rely heavily on liability insurance coverage to pay out any monies that are ultimately decided (or agreed) are due the accident victim. Without insurance coverage, fair compensation is unlikely, even in an obvious case of negligence.

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In many South Carolina car accident cases, there is only one real issue: the amount of damages to which the injured party is entitled to receive from the at-fault defendant’s motor vehicle liability insurer.

Sometimes, however, there are other issues, such as how the payment of benefits under other insurance policies – including workers’ compensation insurance, personal injury protection, etc. – factor into the equation. When such dispute cannot be settled among the parties, it is up to the courts to decide.

Facts of the Case

In a recent case, the plaintiff was a woman who was reportedly injured in a work-related motor vehicle accident. Her employer’s workers’ compensation insurance carrier paid some $40,000 in medical expenses related to the accident. After the defendant automobile accident insurance company refused to pay the plaintiff’s personal injury protection (PIP) limit of $5000, the plaintiff and her husband filed suit, asserting claims for breach of contract and bad faith refusal to pay insurance benefits.

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Sometimes, a personal injury or wrongful death case involves only two parties and one theory of liability. For example, when one motorist’s negligence harms another driver in a South Carolina car accident, the injured driver may only need to file a simple negligence claim against the careless motorist who caused the crash.

However, many cases are not so simple, and sorting out how who is liable and whose insurance company must pay for which damages can be a complex endeavor indeed. For example, what happens when a car accident injures someone who is on the job? Who is responsible for the injured person’s medical expenses – the workers’ compensation carrier or the injured person’s personal injury protection automobile accident insurer?

Facts of the Case

Several months ago, we told you about a federal court of appeals’ decision in a case in which a medical malpractice insurance company sought a declaratory judgment as to its responsibility to cover certain acts of malpractice after it was discovered that a fake nursing home “doctor” had illegally assumed the identity of a physician who was out of the country.

In that decision, the appellate court held that the principles of equity demanded that there be coverage for the innocent co-insureds under the medical malpractice policy that was in place during the impostor’s time at the nursing home.

Now, the United States District Court for the District of South Carolina, Columbia Division, has issued a new opinion in a related matter.

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The majority of personal injury cases, wrongful death actions, and bad faith insurance claims are litigated in state court. However, the federal courts have concurrent jurisdiction in such cases if there is diversity of citizenship between the parties and there is more than $75,000 is in controversy.

Litigation in either the state or the federal system can be protracted and complex. Typically, a suit begins with the plaintiff filing a complaint, and the defendant filing an answer (and sometimes a counter-complaint against the plaintiff or a third-party complaint against someone not yet involved in the case).

Once the pleadings are filed, the next phase of litigation is the discovery phase, during which the parties are given an opportunity to submit document requests, interrogatories, and requests to admit so that each side can learn as much as possible about the other’s case. This is both to help the parties prepare for trial and to encourage settlement, if at all possible.

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