INSURANCE BAD FAITH I CIVIL LITIGATION I FRAUD LITIGATION – $2 Million Dollar Umbrella Policy Concealed in an Uninsured Motorist Claim – Insurer’s Failure to Disclose equates to Bad Faith and Insurance Fraud - A CASE STUDY July 03, 2020 A fraud victim filed a complaint for Fraud Litigation against State Farm Mutual Automobile Insurance Company, after State Farm failed to disclose an umbrella policy that afforded the victim additional $2 million dollars in coverage. During litigation the fraud victim propounded discovery on State Farm Insurance, requesting the Insurance carrier to “[d]escribe any policy or policies of liability insurance”. In responding to discovery State Farm only disclosed information regarding a $250,000 UM automobile policy and concealed the existence of a $2,000,000 umbrella policy. Only after litigation was complete and the fraud victim was awarded a verdict on the mistaken belief that only $250,000 in coverage existed, State Farm Mutual Automobile Insurance Company disclosed that there was an applicable umbrella policy which provided for $2 million dollars in coverage. Relevant excerpts of the case are as follows: “… September 3, 2008, Jerry Earl ("Jerry") sustained injuries in a motorcycle crash involving a hit-and-run semi driver. At the time, Kimberly and Jerry Earl ("the Earls") had an Uninsured Motorist ("UM") policy with available coverage of $250,000 with State Farm Mutual and a Personal Liability Umbrella Policy ("PLUP") … On January 19, 2011, the Earls served their interrogatories upon State Farm Mutual, with a question stating: Describe any policy or policies of liability insurance … State Farm Mutual, answered the interrogatories ‘[and]’ included information about only the $250,000 UM policy with State Farm Mutual. On November 27, 2012, the jury returned a verdict of $175,000 for the Estate of Jerry Earl and $75,000 for Kimberly individually. On November 28, State Farm Mutual directed its counsel to divulge information regarding the PLUP policy with UM coverage to Earl's counsel. On December 3, 2012, State Farm Mutual's counsel provided Earl's counsel a copy of the PLUP policy, which provided for an additional $2,000,000 in UM coverage. … Unbeknownst to the Earls until after the jury trial, they were also covered by a separate [PLUP] that carried an endorsement for uninsured motorist coverage with a limit of $2 million. On November 26, 2014, Earl filed a complaint against Defendants alleging fraud, constructive fraud, bad faith, and breach of contract ("Fraud Litigation"). Earl requested damages for Kimberly S. Earl's emotional distress, attorney fees, and for punitive damages against State Farm Mutual Automobile Insurance Company, State Farm Fire & Casualty Company and ‘State Farm’s Representative” to punish and make example of their conduct, for the costs of suit incurred herein … .” Earl v. State Farm Mut. Auto. Ins. Co., 91 N.E.3d 1066, (Ind. Ct. App. 2018) In response to this situation the fraud victim initiated a fraud litigation claim against State Farm Mutual, State Farm Fire and the State Farm Representative. The “fraud litigation” complaint, included three causes of action: Fraud, Constructive Fraud and Insurance Bad Faith. In the bad-faith portion of the fraud action the court reiterated a holding from a 1993 case which held, “… Insurers are obligated to exercise good faith in determining the payment of an insured's claim. … The obligation of good faith and fair dealing with respect to the discharge of the insurer's contractual obligation includes the obligation to refrain from (1) making an unfounded refusal to pay policy proceeds; (2) causing an unfounded delay in making payment; (3) deceiving the insured; and (4) exercising any unfair advantage to pressure an insured into a settlement of his claim.” See Erie Ins. Co. v. Hickman by Smith, 622 N.E.2d 515, 519 (Ind. 1993). For additional articles discussing, insurance fraud and insurance bad-faith claims, please see links below: • CALIFORNIA INSURANCE BAD FAITH I FRAUD I CIVIL LITIGATION – When Does Insurance Fraud And Insurance Bad-Faith Overlap?: http://dianalegal.com/california-insurance-bad-faith-i-fraud-i-civil-litigation-when-does-insurance-fraud-and-insurance-bad-faith-overlap/ • CALIFORNIA INSURANCE BAD FAITH I CIVIL LITIGATION – Do I Have A Bad Faith Insurance Claim? http://dianalegal.com/california-insurance-bad-faith-i-civil-litigation-do-i-have-a-bad-faith-insurance-claim/ • CALIFORNIA INSURANCE BAD FAITH I PERSONAL INJURY I CIVIL LITIGATION – INSURANCE BAD FAITH http://dianalegal.com/CALIFORNIA-INSURANCE-BAD-FAITH-I-PERSONAL-INJURY-I-CIVIL-LITIGATION-INSURANCE-BAD-FAITH/ • “What is Insurance Bad Faith”, “What is a Bad Faith Insurance Claim”, “Common Conduct that Gives Rise to an Insurance Bad Faith Claim” and “What Damages are available in Insurance Bad Faith claims” are linked herein: CALIFORNIA INSURANCE BAD FAITH I PERSONAL INJURY I CIVIL LITIGATION – What Is A Bad Faith Insurance Claim? http://dianalegal.com/california-insurance-bad-faith-i-personal-injury-i-civil-litigation-what-is-a-bad-faith-insurance-claim/ • CALIFORNIA INSURANCE BAD FAITH I PERSONAL INJURY I VERDICT & SETTLEMENTS – $2,006,000 Insurance Bad Faith: Unreasonable Failure to Disclose Policy Limits, Failure to Make Prompt & Fair Settlement: http://dianalegal.com/california-insurance-bad-faith-i-personal-injury-i-verdict-settlements-2006000-insurance-bad-faith-unreasonable-failure-to-disclose-policy-limits-failure-to-make-prompt-fair-settlem/ To better understand what types of Damages are recoverable in a bad-faith action or Insurance fraud case, see the links below: • What are Compensatory Damages? http://dianalegal.com/personal-injury-personal-injury-damages-compensatory-damages/ • Compensatory Damages in a Personal Injury Action: http://dianalegal.com/personal-injury-damages-compensatory-damages-for-personal-injuries/ • What Are Punitive Damages? http://dianalegal.com/fraud-i-damages-i-civil-litigation-what-are-punitive-damages/ • A discussion on the differences between punitive damages and compensatory damages: http://dianalegal.com/fraud-i-damages-i-civil-litigation-punitive-damages-vs-compensatory-damages/ Articles discuss Fiduciary Duties, to better explain what is a fiduciary-like relationship, please see the listed below: • FRAUD I BREACH OF FIDUCIARY DUTY – What Fiduciary Duties Are Owed? A Fiduciary Owes The Duty Of Undivided Loyalty. What Happens If A Fiduciary Breaches Their Duty Of Undivided Loyalty? http://dianalegal.com/fraud-i-breach-of-fiduciary-duty-what-fiduciary-duties-are-owed-a-fiduciary-owes-the-duty-of-undivided-loyalty-what-happens-if-a-fiduciary-breaches-their-duty-of-undivided-loyalty/ • FRAUD I BREACH OF FIDUCIARY DUTY – What Fiduciary Duties Are Owed? A Fiduciary Owes The Duty To Use Reasonable Care. What Happens If A Fiduciary Breaches Their Duty To Use Reasonable Care? http://dianalegal.com/fraud-i-breach-of-fiduciary-duty-what-fiduciary-duties-are-owed-a-fiduciary-owes-the-duty-to-use-reasonable-care-what-happens-if-a-fiduciary-breaches-their-duty-to-use-reasonable-care/ • FRAUD I BREACH OF FIDUCIARY DUTY – What Is A Fiduciary Duty? What Does A Breach Of Fiduciary Duty Mean? What Is A Fiduciary? http://dianalegal.com/fraud-i-breach-of-fiduciary-duty-what-is-a-fiduciary-duty-what-does-a-breach-of-fiduciary-duty-mean-what-is-a-fiduciary/ Our other articles discussing Fraud in California and causes of action for Fraud in general are included below: • FRAUD – What Constitutes Fraud In California? What Does A Cause Of Action For Fraud By Intentional Misrepresentation In California Mean? http://dianalegal.com/fraud-what-constitutes-fraud-in-california-what-does-a-cause-of-action-for-fraud-by-intentional-misrepresentation-in-california-mean/ • FRAUD – WHAT CONSTITUTES FRAUD IN CALIFORNIA? WHAT DOES A CAUSE OF ACTION FOR FRAUD BY FALSE PROMISE IN CALIFORNIA MEAN?: http://dianalegal.com/FRAUD-WHAT-CONSTITUTES-FRAUD-IN-CALIFORNIA-WHAT-DOES-A-CAUSE-OF-ACTION-FOR-FRAUD-BY-FALSE-PROMISE-IN-CALIFORNIA-MEAN/ • FRAUD VIA FALSE PROMISE OR PROMISSORY FRAUD: http://dianalegal.com/fraud-legal-liability-for-fraud-civil-tort-for-fraud-via-false-promise-or-promissory-fraud/ • INTENTIONAL FRAUD AND DECEIT is embedded herein: http://dianalegal.com/fraud-legal-liability-for-fraud-civil-tort-for-intentional-fraud-and-deceit/ • CONVERSION OR BREACH OF FIDUCIARY DUTY http://dianalegal.com/fraud-legal-liability-for-fraud-civil-tort-for-conversion-or-breach-of-fiduciary-duty/ • FRAUDULENT CONCEALMENT OR CONCEALMENT FRAUD: http://dianalegal.com/fraud-legal-liability-for-fraud-civil-tort-for-fraudulent-concealment-or-concealment-fraud/ • FRAUD – What Constitutes Fraud In California? What Does A Cause Of Action For Fraud By Concealment In California Mean? http://dianalegal.com/fraud-what-constitutes-fraud-in-california-what-does-a-cause-of-action-for-fraud-by-concealment-in-california-mean/ • FRAUD – Legal Liability For Fraud – Civil Tort For Conversion Or Breach Of Fiduciary Duty: http://dianalegal.com/fraud-legal-liability-for-fraud-civil-tort-for-conversion-or-breach-of-fiduciary-duty/ • CONSTRUCTIVE FRAUD OR NEGLIGENT MISREPRESENTATION is embedded herein: http://dianalegal.com/fraud-legal-liability-for-fraud-civil-tort-for-constructive-fraud-or-negligent-misrepresentation/ If you are wondering about a potential bad-faith claim or have questions regarding an insurance fraud matter, we invite you to contact us today at 619-432-5145 for a free consultation with one of our experienced Insurance Fraud attorneys and California Insurance Bad Faith Lawyers. [contact-form-7 id="1201" title="Wrongful Termination"] Tags: Bad Faith Insurance Claim, Bad faith Insurance lawyer, Bad faith Insurance attorney, California Bad Faith Insurance Claim, California Bad faith Insurance lawyer, California Bad faith Insurance attorney, duty to defend, good faith and fair dealing, failure to defend; California Insurance Bad Faith; Insurance Bad Faith, implied covenant of good faith and fair dealing, Homeowners insurance, Homeowner coverage, Wrongful denial of homeowner insurance, Breach of Duty to Inform Insured of Rights, Bad-faith Claim, Insurance Fraud, California Fraud Attorney, San Diego Fraud Attorney, Fraud by making false representations, Intentional Failure to disclose, Contract induced by fraud, False representations in contracts, Fraudulent Inducement in Investments, Fraudulent tactics in Investment transactions, Fraudulent Agreements, misappropriation of funds, financial mismanagement, misappropriation of funds attorney, financial mismanagement attorney, San Diego Breach of Fiduciary Attorney, California Fiduciary Attorney, San Diego Fiduciary Attorney, California Fiduciary Lawyer, San Diego Fiduciary Lawyer, Breach of Fiduciary, WHAT IS FRAUD, Is Fraud Civil, What is Fraud Litigation, Fraud Litigation, A Civil Fraud Claim, Fraud Claim, Legal Liability for Fraud, constructive fraud, negligent misrepresentation, concealment fraud, fraudulently concealment, Intentional Fraud and Deceit, Promissory Fraud, False Promise, Conversion or breach of fiduciary, What Constitutes Fraud in California, What does a Cause of Action for Fraud by False Promise in California Mean, What is a Cause of Action for Fraud in California, Insurance Fraud Litigation, Fraud Litigation Complaint, Fraud Litigation

INSURANCE BAD FAITH I CIVIL LITIGATION I FRAUD LITIGATION – $2 Million Dollar Umbrella Policy Concealed – Insurer’s Failure to Disclose equates to Bad Faith and Insurance Fraud – A CASE STUDY

INSURANCE BAD FAITH I CIVIL LITIGATION I FRAUD LITIGATION – $2 Million Dollar Umbrella Policy Concealed – Insurer’s Failure to Disclose equates to Bad Faith and Insurance Fraud – A CASE STUDY

July 03, 2020

A fraud victim filed a complaint for Fraud Litigation against State Farm Mutual Automobile Insurance Company, after State Farm failed to disclose an umbrella policy that afforded the victim additional $2 million dollars in coverage.  During litigation the fraud victim propounded discovery on State Farm Insurance, requesting the Insurance carrier to “[d]escribe any policy or policies of liability insurance”.  In responding to discovery State Farm only disclosed information regarding a $250,000 UM automobile policy and concealed the existence of a $2,000,000 umbrella policy.  Only after litigation was complete and the fraud victim was awarded a verdict on the mistaken belief that only $250,000 in coverage existed, State Farm Mutual Automobile Insurance Company disclosed that there was an applicable umbrella policy which provided for $2 million dollars in coverage.

Relevant excerpts of the case are as follows: “… September 3, 2008, Jerry Earl (“Jerry”) sustained injuries in a motorcycle crash involving a hit-and-run semi driver. At the time, Kimberly and Jerry Earl (“the Earls”) had an Uninsured Motorist (“UM”) policy with available coverage of $250,000 with State Farm Mutual and a Personal Liability Umbrella Policy (“PLUP”) … On January 19, 2011, the Earls served their interrogatories upon State Farm Mutual, with a question stating: Describe any policy or policies of liability insurance … State Farm Mutual, answered the interrogatories ‘[and]’ included information about only the $250,000 UM policy with State Farm Mutual.

            On November 27, 2012, the jury returned a verdict of $175,000 for the Estate of Jerry Earl and $75,000 for Kimberly individually. On November 28, State Farm Mutual directed its counsel to divulge information regarding the PLUP policy with UM coverage to Earl’s counsel. On December 3, 2012, State Farm Mutual’s counsel provided Earl’s counsel a copy of the PLUP policy, which provided for an additional $2,000,000 in UM coverage.  … Unbeknownst to the Earls until after the jury trial, they were also covered by a separate [PLUP] that carried an endorsement for uninsured motorist coverage with a limit of   $2 million.

            On November 26, 2014, Earl filed a complaint against Defendants alleging fraud, constructive fraud, bad faith, and breach of contract (“Fraud Litigation”). Earl requested damages for Kimberly S. Earl’s emotional distress, attorney fees, and for punitive damages against State Farm Mutual Automobile Insurance Company,  State Farm Fire & Casualty Company and ‘State Farm’s Representative” to punish and make example of their conduct, for the costs of suit incurred herein … .” Earl v. State Farm Mut. Auto. Ins. Co., 91 N.E.3d 1066, (Ind. Ct. App. 2018)

In response to this situation the fraud victim initiated a fraud litigation claim against State Farm Mutual, State Farm Fire and the State Farm Representative.  The “fraud litigation” complaint, included three causes of action: Fraud, Constructive Fraud and Insurance Bad Faith.  In the bad-faith portion of the fraud action the court reiterated a holding from a 1993 case which held, “…  Insurers are obligated to exercise good faith in determining the payment of an insured’s claim. … The obligation of good faith and fair dealing with respect to the discharge of the insurer’s contractual obligation includes  the obligation to refrain from (1) making an unfounded refusal to pay policy proceeds; (2) causing an unfounded delay in making payment; (3) deceiving the insured; and (4) exercising any unfair advantage to pressure an insured into a settlement of his claim.” See Erie Ins. Co. v. Hickman by Smith, 622 N.E.2d 515, 519 (Ind. 1993).

For additional articles discussing, insurance fraud and insurance bad-faith claims, please see links below:

To better understand what types of Damages are recoverable in a bad-faith action or Insurance fraud case, see the links below:

Articles discuss Fiduciary Duties, to better explain what is a fiduciary-like relationship, please see the listed below: 

Our other articles discussing Fraud in California and causes of action for Fraud in general are included below:

If you are wondering about a potential bad-faith claim or have questions regarding an insurance fraud matter, we invite you to contact us today at 619-432-5145 for a free consultation with one of our experienced Insurance Fraud attorneys and California Insurance Bad Faith Lawyers.

 

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