Alexander v. Trustgard. Melissa Richardson obtained summary judgment in Laurel Circuit Court for Trustgard Insurance Company in this third-party bad faith case. The Judgment of the Laurel Circuit Court was affirmed by the Kentucky Court of appeals. Plaintiff was allegedly injured in a motor vehicle accident with Trustgard’s insured. At the time of the accident, multiple records showed Plaintiff complained of left arm pain. Later, Plaintiff claimed right arm pain for which she underwent surgery. Trustgard, with the aid of Plaintiff’s attorneys, then sought Plaintiff’s pre-accident medical records to determine if the right arm complaints and treatment were related to the accident. There were multiple issues with obtaining those records and it took a while before they were received. Throughout the underlying case, Trustgard maintained that policy limits would likely be owed if the right arm was related to the accident. Once received, the pre-accident medical records showed that Plaintiff was complaining of right arm pain before the accident, one instance of which was only 17 days before the accident. Plaintiff’s third-party bad faith claims asserted that Trustgard had taken an improperly long time in denying Plaintiff’s claim and that it was a tactic designed to cause Plaintiff to accept too small an amount in settlement. The Circuit Court granted Trustgard’s Motion for Summary Judgment, finding against Plaintiff on all three elements required for third-party bad faith. The Court held: (1) Trustgard was reasonable in questioning the relatedness of the alleged right shoulder injury and, therefore, its liability to pay for that injury under the policy was not established; (2) Trustgard never denied Plaintiff’s claim, but instead delayed deciding on the claim until the relatedness of the right shoulder could be determined; and, (3) Plaintiff failed to show that Trustgard either knew there was no reasonable basis for denying the claim or acted with reckless disregard for whether a basis existed.
