Alaska Employment Law

A 9th Circuit panel has reversed Judge Ralph Beistline’s resolution of a claim that a carrier failed to act in good faith to resolve an uninsured motorist claim.  Beistline sat in the Eastern District of California, and applied California state law.  The panel held: 

“An insurer denying or delaying the payment of policy benefits due to the existence of a genuine dispute with the insured … as to the amount of the insured’s coverage claim is not liable in bad faith.” . . . However, as the word “genuine” implies, the insurer’s position must be “maintained in good faith and on reasonable grounds.”  . . . An insurer is not entitled to summary judgment where a jury could reasonably conclude that the insurer acted unreasonably. . . . 

Taking the facts in the light most favorable to Hat, we cannot conclude, as a matter of law, that Depositor’s actions were reasonable throughout its review of Hat’s claim for policy benefits. To the contrary, it would be reasonable for a jury to find no genuine dispute as to the claim amount in the period of apparent inactivity between August 2003 and November 2004, during which Depositors possessed all of Hat’s medical records, . . . agreed that she had reached “maximum medical improvement” in June 2003, and agreed with Hat that this was a policy-limit case. Depositors’s failure to respond to several of Hat’s arbitration demands, its advice that she not retain an attorney, and its conduct of depositions also contribute to the totality of conduct that might reasonably be characterized as bad faith. . . . The mere fact of an ultimate settlement between the policy limit Hat initially demanded and amount of Depositors’s first offer does not suggest otherwise, given that parties settle for reasons that often have nothing to do with a claim’s actual value. . . . We thus reverse and remand for further proceedings on Hat’s bad faith and breach of contract claims.

Hat v. Depositors Ins. Co., 2009 WL 2353271 (9th Cir. July 30, 2009)(citations omitted)