Insurance Adjuster Goes Wild

I take my work seriously. And so do you. But sometimes people can just go over the top in attempting to accomplish something on the job. Such was allegedly the case in Robinson v. Affirmative Insurance Holdings, Inc., No. 12-2159 (N.D. Ala. Mar. 27, 2014), [enhanced version available to lexis.com subscribers].

On January 27, 2010, Pearlie Robinson went to bed with her 2008 Kia Spectra parked outside of her home. The following morning there was no longer a 2008 Kia Spectra outside her home. Robinson reported the incident to law enforcement authorities as a “theft.” They eventually recovered the Kia but it had sustained damage that had not existed prior to being stolen. Robinson was insured under a policy issued by Affirmative Insurance Company that provided for “full coverage” for loss and damage resulting from “theft, fire, larceny, malicious mischief and/or vandalism.”

Robinson notified AIC and USAgencies Management Services of the damage and submitted a claim. During the course of AIC and USAgencies’s investigation into the claim they suggested that the evidence they had obtained demonstrated that Robinson had been involved in the damage to the vehicle. They advised her that, unless she dropped her claim, they would turn their investigation results over to law enforcement, who would charge her with arson and/or insurance fraud. Robinson’s claim was denied on the basis that the damage to her vehicle did not fall within the policy’s definition of “loss.”

The opinion does not address what “evidence” had allegedly been uncovered to suggest that Robinson had played a part in the damage to the vehicle. But Robinson obviously did not believe it to be the case as she filed suit against various parties, asserting several causes of action, including intentional infliction of emotional distress. The court dismissed Robinson’s count for intentional infliction of emotional distress, but granted her leave to amend the complaint to plead more serious factual allegations.

But here’s the best part of the case. The defendants argued that the conduct alleged by plaintiff did not rise to the level of outrage as recognized in Alabama case law. Why not? Well, because what happened to Ms. Robinson wasn’t “as bad” as what happened in Nat’l Sec. Fire & Casualty Co. v. Bowen, 447 So. 2d 133 (Ala.1983), [enhanced version available to lexis.com subscribers], where the court affirmed a verdict for the plaintiff for outrageous conduct. In Bowen, the insurance investigators: “(1) took the plaintiff out into the woods, held a gun to his head, and threatened to kill him, (2) told the plaintiff he would look good next to his dead brother, (3) threatened to kill the plaintiff's two small sons, (4) bribed witnesses, and (5) obtained an indictment against the plaintiff for arson and false pretenses based upon false evidence.”

I took a look at Bowen and here is what the court concluded about the emotional distress claim: “After a thorough review of the evidence, we opine that the conduct of National Security’s agents was so horrible, so atrocious, so barbaric, that the jury could find as a matter of fact that Bowen suffered severe emotional distress; that no civilized person could be expected to endure the acts committed without suffering mental distress.”

Obviously these are very aberrational cases. Note to coverage counsel – your client just doesn’t have a good case when your defense is that the insurer’s conduct didn’t meet the “so barbaric” standard.

Coverage Opinions is a bi-weekly (or more frequently) electronic newsletter reporting or providing commentary on just-issued decisions from courts nationally addressing insurance coverage disputes. Coverage Opinions focuses on decisions that concern numerous issues under commercial general liability and professional liability insurance policies. For more information visit www.coverageopinions.info.

The views expressed herein are solely those of the author and not necessarily those of his firm or its clients. The information contained herein shall not be considered legal advice. You are advised to consult with an attorney concerning how any of the issues addressed herein may apply to your own situation. Coverage Opinions is gluten free but may contain peanut products.

    Randy Maniloff is Counsel at White and Williams, LLP in Philadelphia. He previously served as a firm Partner for seven years and transitioned to a Counsel position to pursue certain writing projects including Coverage Opinions . Nonetheless he still maintains a full-time practice at the firm. Randy concentrates his practice in the representation of insurers in coverage disputes over primary and excess obligations under a host of policies, including commercial general liability and various professional liability policies, such as public official’s, law enforcement, educator’s, media, computer technology, architects and engineers, lawyers, real estate agents, community associations, environmental contractors, Indian tribes and several others. Randy has significant experience in coverage for environmental damage and toxic torts, liquor liability and construction defect, including additional insured and contractual indemnity issues. Randy is co-author of “General Liability Insurance Coverage - Key Issues In Every State” (Oxford University Press, 2nd Edition, 2012). For the past twelve years Randy has published a year-end article that addresses the ten most significant insurance coverage decisions of the year completed.

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