Bad Faith

Richardson Law Group represents some of the nation’s largest insurance companies in bad faith disputes such as breach of contract, breach of fiduciary duty, institutional bad faith, violations of the Unfair Claims Settlement Practices Act, and declaratory judgment actions in Kentucky’s state and federal courts.  Our attorneys work with adjustors and in house counsel to protect the interests of the insurance carriers.

Representative Matters:

January 2019, Kentucky Court of AppealsAlexander 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.

6th Cir. Ky. 2008 Scottsdale Ins. Co. v. Flowers. Richardson Law Group represented an insurance carrier in the successful appeal of a District Court Declaratory Judgment Action on procedural and substantive grounds. The claimant in the underlying action had sought coverage under a treatment center's liability coverage for an allegedly inappropriate sexual relationship with a therapist. On appeal, the claimant challenged the District Court's decision to exercise the jurisdiction over this appeal which granted it under the federal Declaratory Judgment Act. She further contended that the District Court erred in concluding that the sexual affair with her therapist was outside the therapist's scope of employment as a matter of Kentucky law. The Appellate Court held that the District Court did not abuse its discretion in exercising jurisdiction over the insurer's declaratory judgment action. The Court also agreed with the District Court's conclusion that engaging in sexual activities with a patient was not within the scope of employment of a therapist and thus were not covered under the insurance policy.  

2013 U.S. Dist. LEXIS 4760 (E.D. Ky. Jan. 11, 2013)Hardy Oil Co. v. Nationwide Agribusiness Ins. Co.  Richardson Law Group attorneys represented an insurance carrier in the successful enforcement of a coverage denial based on a pollution exclusion in a petroleum distributor's insurance policy. The court held: "Hardy Oil's claim involves a classic environmental catastrophe that led to a government-ordered cleanup. As Kentucky courts have recognized, these are exactly the type of situations that the pollution exclusion historically sought to exclude from coverage. Therefore, the pollution exclusion is not ambiguous as applied to the factual circumstances of this case, and Hardy Oil cannot claim coverage under the Liability Policy." An associated extra-contractual claim was successfully resolved as a result.