BAD FAITH IN INSURANCE COVERAGE DISPUTES AND THE PUBLIC NATURE OF INSURANCE -- UNDERSTANDING THE RECOVERY TOOLS AVAILABLE TO POLICYHOLDERS

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BAD FAITH IN INSURANCE COVERAGE DISPUTES AND THE PUBLIC NATURE OF INSURANCE -- UNDERSTANDING THE RECOVERY TOOLS AVAILABLE TO POLICYHOLDERS

By Jordan S. Stanzler.

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TABLE OF CONTENTS

I. Insurance is Different

A. Insurance Companies Are Fiduciaries

B. The Public Service Nature Of Insurance

II. Insurance Industry Motivations -- Knowing What Makes The Industry Tick and What Makes Judges Tick Is Essential

A. Code of Conduct

B. Insurance is A Defective Product

C. The Code of Silence: The Attorney-Client Privilege and the Crime Fraud Exception

D. Money

E. Politically Correct Judges

F. Judges Need Insurance

III. The Information Imbalance

A. The Information Imbalance

B. Contributors to the Information Imbalance

1. The Public Relations Campaign
2. Buying And Lying
3. Arbitration

IV. The Duty Of Good Faith And Fair Dealing

A. The Nature Of The Duty Of Good Faith And Fair Dealing

B. The Failure to Practice What Is Preached: Common Insurance Industry Techniques Used To Pervert The Duty Of Good Faith and Fair Dealing

C. Judicial and Statutory Recognition Of The Duty Of Good Faith

1. Judicial Recognition
2. Statutory Recognition
3. Pennsylvania
4. Ohio
5 West Virginia

V. The Duty of Good Faith Continues Through Insurance Coverage Litigation

VI. The Duty To Disclose Insurance Coverage

A. Insurance Companies Have A Duty To Disclose Insurance Coverage To Their Policyholders

B. The Reasonable Expectations Doctrine

C. Fraudulent Misrepresentation

D. Insurance Company Defenses to Claims Alleging Breach of the Duty to Disclose

E. The Insurance Company Must Disclose Insurance Coverage Even When The Policyholder Believes There is None

F. Insurance Companies Have An Affirmative Duty To Come Forward And Disclose Insurance Coverage

VII. BMW of North America v. Gore: Preserving Punitive Damages To Deter and Punish Reprehensible Bad Faith Conduct

A. The Three Guideposts of BMW

B. Post BMW Decisions

VIII. The Realities of Insurance Coverage Litigation

A. The Imbalance in Bargaining Power Between The Insurance Company And The Policyholder

B. Claims Handling

C. Insurance Companies Profit From Litigation

D. Death or Disability of a Policyholder

IX. Compensatory Damages, Bad Faith or Both -- The Brass Ring and Meat and Potatoes

A. Compensatory Damages - What They Are?

B. Compensatory Damages --What the Cases Say

X. Litigation Tips And Techniques

A. Pre-litigation 'Musts'

1. Locate All Insurance Policies
2. Give Notice To the Insurance Company
3. Contending With The Reservation of Rights Letter
4. Keep In Contact With The Insurance Company
5. Complain To The State Insurance Commissioner

B. 'Must Have' Documents

C. 'Must Have' Depositions

D. 'Must Ask' Deposition Questions

E. Where Not To Look For Coverage

F. Jury Charges -- Do Not Reinvent Wheels

G. Trial Evidence -- Bulldogs or Pussycats?

H. Avoiding Bifurcation

I. Consider Malicious Defense

XI. Conclusion

APPENDIX: Definitions of good faith from legal treatises, dictionaries, legal pleadings and reference texts.

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last modified Dec 02, 2005 / 01:12 AM, GMT