In the last issue of Coverage Opinions I discussed the Louisiana Supreme Court’s recent decision in Kelly v. State Farm Fire & Casualty Co., No. 2014-CQ-1921 (May 5, 2015), [subscribers can access an enhanced version of this opinion: lexis.com | Lexis Advance].
In general, the Louisiana high court held in Kelly that an insurer can be found liable for bad-faith failure-to-settle – even if the insurer never received a firm settlement offer. Insurers generally take comfort in having no risk of exposure for an excess verdict if a demand to settle within the insured’s limit of liability was never made. By taking this significant requirement away, did the Louisiana Supreme Court hand a playbook to policyholders and courts to change the bad faith landscape? While Kelly v. State Farm is a Louisiana decision, I opined that it had the potential for implications farther and wider than the Pelican State. First, the decision was tied to Louisiana’s version of the National Association of Insurance Commissioner’s Unfair Claims Settlement Practices Act. And just about every state in the country has adopted some version of the NAIC’s Act. Second, it doesn’t seem a stretch that the Kelly court’s reasoning could be persuasive on other courts.A coverage decision that changes a core principle of bad faith law, and with the potential for national implications, gets my vote as the most significant of the first half of 2015. And I suspect the entire year. Such an important decision deserves further discussion. And there can be no one better way to accomplish that than to turn to a lawyer who is an expert in Louisiana coverage law and a member of a Mardi Gras krewe. To see what an experienced Louisiana coverage lawyer, who’s fought some alligators in his career, has to say about Kelly v. State Farm, check out this comprehensive analysis by Jeff Waltz, of The Waltz Law Group in New Orleans. http://www.waltzlawgroup.com/wp-content/uploads/2015/05/Kelly-v-State-Farm-Memo-to-Insurers.pdf
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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