The Bad Faith Sentinel - April 2012


In This Issue:

- Case of First Impression: In Florida, The Law of The Place of Contracting Governs First-Party Bad Faith Claims pages 1 - 2

- Pennsylvania Superior Court Reaffirms Holding that Violations of Statutes Related to Insurance Practices May Be Evidence of Bad Faith pages 2 - 3

- Insurer That Did Not Issue Policy or Collect Premiums, But Oversaw Defense of Lawsuit, Was Not Liable Under Bad Faith Statute pages 3 - 5

- In The Ninth Circuit, A Failure to Produce Support for Damages Claim Did Not Justify Dismissal Sanctions pages 5 - 6

Excerpt from "In The Ninth Circuit..."

R & R Sails, Inc. v. Insurance Co. of the State of Pennsylvania, Nos. 10-55155, 10-55888, 2012 WL 933830 (9th Cir. Mar. 21, 2012).

The Court of Appeals for the Ninth Circuit held that an insured’s failure to produce proof of damages in connection with its bad faith claim did not necessitate a Rule 37(c) sanction of dismissal.

R & R Sails, Inc. (“R & R”), the owner of Hobie Cat Australasia Pty. Ltd. (“Hobie Cat”), an Australian corporation in the watercraft manufacturing and distribution business, submitted a claim to its insurer, American International Group, Inc. (“AIG”), after a December 2011 wildfire damaged Hobie Cat’s manufacturing and sales facility in Woolamia, Australia. AIG paid portions of the claim, but declined to pay others. R & R sued AIG for breach of contract, unfair competition and tortious bad faith. On its bad faith claim, R & R sought punitive damages, attorney’s fees, and costs incurred to obtain its policy benefits, pursuant to Brandt v. Superior Court, 693 P.2d 796 (Cal. 1985) (“Brandt fees”).

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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