FEDERAL COURT AWARDS $400,000.00 TO PLAINTIFF EXCESS CARRIER IN FLORIDA.
Westchester Fire Insurance Company and Mid-Continent Casualty Company insured the same policyholder, Continental Manufacturing. Continental purchased a primary liability policy from Mid-Continent and an umbrella liability policy from Westchester.
After a judgment was entered upon a verdict against Continental in excess of Mid-Continent's primary policy limits, Westchester sued Mid-Continent for alleged bad faith, alleging both common law and statutory claims.
After a bench trial, the Court entered judgment for the Defendant Mid-Continent as to its conduct before the underlying trial. Mid-Continent's pretrial settlement conduct in the underlying case was not bad faith, the Court found based on the evidence presented in the bad faith bench trial.
However, Mid-Continent's conduct after the underlying trial was a different story, said the Court, which found that Plaintiff Westchester proved by a preponderance of the evidence that Mid-Continent acted in bad faith after the underlying verdict against their common insured, by not telling Westchester that there was a settlement demand after the verdict. Both the underlying verdict and the post-verdict settlement demand were above the primary carrier's policy limits and within the umbrella liability carrier's limits.
The defense counsel in the underlying case, who was retained by Mid-Continent to defend Continental, informed Mid-Continent by EMail that he had received a post-verdict settlement demand. Although the defense attorney had "cc'd" Westchester "on previous reports regarding the underlying action," the defense counsel did not include Westchester on this EMail to Mid-Continent. Mid-Continent's claims adjuster testified in the bench trial on bad faith that she "inadvertently" did not include Westchester in her EMail back to defense counsel. She could not notify Westchester by hitting "Reply to All" on his EMail since Westchester was not on the original EMail of course, and she did not affirmatively forward it or independently write to or telephone Westchester, in other words. See Westchester Fire Ins. Co. v. Mid-Continent Cas. Co., 2013 WL 3189053 *4 (S.D. Fla. June 21, 2013).
Finding bad faith on the part of the primary liability carrier after the underlying trial, the Federal Court entered judgment in favor of the plaintiff umbrella carrier in the amount of $390,173.00. Westchester Fire Ins. Co. v. Mid-Continent Cas. Co., 2013 WL 3189053 *1 (S.D. Fla. June 21, 2013).
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