Wiley Rein LLP


Insurance | DEFENDING BAD FAITH AND EXTRA-CONTRACTUAL CLAIMS

Wiley Rein LLP has substantial experience representing insurers in cases where the policyholder or claimant is seeking extra-contractual damages by attacking the insurer’s good faith conduct.  A bad faith claim against a carrier can arise in many different contexts, from an add-on claim in an insured’s suit seeking coverage, to an attempt by the claimant and the insured to “set up” the carrier for an excess judgment.  Regardless of the circumstances in which the bad faith claims first arise, Wiley Rein has a strong motions, trial, and appellate practice capable of representing the insurer effectively through each phase of litigation.

Wiley Rein attorneys have successfully defended insurers against bad faith claims, including by obtaining favorable rulings for the insurer at the summary judgment stage.  In other cases, Wiley Rein has negotiated a settlement of bad faith claims on terms that were favorable to the carrier.  Below are some recent examples of Wiley Rein’s experience in defending insurers against bad faith allegations:

  • Acts as national extra-contractual counsel for one carrier, advising on extra-contractual claims generally, and acting as lead counsel on more substantial or complex claims. 
  • Retained six weeks before trial to act as lead trial counsel in a commercial general liability (CGL) coverage and related bad faith case in California with an underlying default judgment of more than $50 million in favor of a claimant who had suffered catastrophic injuries in a workplace accident.  The case was resolved by a confidential settlement on the night before trial was set to commence.
  • Retained in 2011 to act as lead defense counsel for an insurer in a pending case in Kentucky state court in which the insured asserted bad faith claims arising out of a $42 million default judgment, where the insured’s CGL policy had a $1 million limit.  The insured, which was represented by a nationally recognized West Coast policyholder bad faith firm and a prominent Kentucky trial lawyer, sought bad faith damages as a multiple of the $42 million judgment.  The case was resolved by a confidential settlement.
  • Retained in 2011, following four years of litigation, to act as lead counsel for a primary insurer in a bad faith failure to settle case brought by, among others, an excess insurer seeking to recover its $10 million payment toward a judgment against the insured.  The litigation was resolved by confidential settlement four months later, on eve of trial.
  • Retained in 2009 and 2010 to act as lead counsel for an insurer in two unrelated bodily injury actions pending in Florida state court in which the claimants sought bad faith damages because the insurer assertedly failed promptly to initiate settlement negotiations. In this case, the insured’s liability purportedly was clear and the claimants’ damages, which were permanent and catastrophic, far exceeded the limits of liability of the applicable CGL umbrella policy.  Both cases were resolved by confidential settlements.
  • Professional Asset Strategies v. Continental Cas. Co., 447 F. App’x 97 (11th Cir. 2011) and No. 2:09-cv-1238-AKK, 2010 WL 4284991 (N.D. Ala. Aug. 27, 2010):  obtained summary judgment in favor of the insurer, dismissing breach of contract and bad faith claims, and an affirmance by the U.S. Court of Appeals for the Eleventh Circuit.
  • Simpson & Creasy, P.C. v. Continental Cas. Co., No. 11–11421, 2011 WL 4810010 (11th Cir. Oct. 12, 2011) and 770 F. Supp. 2d 1351 (S.D. Ga. 2011): obtained summary judgment in favor of an insurer, dismissing the insured’s declaratory judgment and bad faith claims, and an affirmance by the U.S. Court of Appeals for the Eleventh Circuit.
  • Bruce Boys v. Continental Cas. Co., 808 F. Supp. 2d 410 (D. Conn. 2011): obtained summary judgment in favor of the insurer, and defeated bad faith claim asserted by insured's judgment creditor.
  • Brian J. McKeen, et al. v. Continental Cas. Co., No. 2:10-cv-10624, 2011 WL 3839803 (E.D. Mich. Aug. 30, 2011): obtained summary judgment defeating insured's bad faith claim on grounds that insured had failed to state a claim for bad faith because (a) the policyholder alleged no duty separate and distinct from the policy that the insurer had allegedly breached and (b) on grounds that the policyholder was not entitled to statutory penalty interest for failure to timely pay the claim because coverage was reasonably in dispute.
  • St. Paul Fire & Marine Ins. Co. v. Onvia, Inc., 196 P.3d 664 (Wash. 2008): represented insurance trade associations as amicus curiae in a landmark decision where the Washington Supreme Court unanimously held that an insured is not entitled to a presumption of harm or coverage by estoppel and instead must prove actual harm and will recover only amounts actually caused by bad faith and general tort damages, although the insured may assert a cause of action for bad faith claims handling even absent a breach of the duty to defend.
  • U.S. Specialty Ins. Co. v. Bridge Capital Corp., et al., 482 F. Supp. 2d 1164 (C.D. Cal. 2007): obtained summary judgment in favor of our client that two employment practice liability policies were void ab initio based on the putative insureds’ misrepresentations in application and denying putative insureds’ cross-motion for summary judgment on their claims for bad faith, breach of contract, and tortious interference with contract.

Contact Us

Richard A. Simpson
202.719.7314 | rsimpson@wileyrein.com




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