Court rejects insurer's appeal in bad-faith denial case.
Byline: Barbara L. Jones
An insurance investigation of an automobile collision claim was unreasonable under Minn. Stat. 604.18 where it did not consider the plaintiff's evidence or the opinions of her expert witnesses, a divided Court of Appeals ruled last week.
The Court of Appeals upheld the verdict of a Hennepin County District Court judge, who awarded the plaintiff $100,000 in damages plus $97,949.50 in attorney fees for her bad-faith claim against her insurer, which had denied her claim for underinsured motorist benefits.
The opinion was written by Judge Randall Slieter, who was joined by Judge Renee Worke. Judge Heidi Schellhas dissented. The case is Peterson v. Western National Mutual Insurance Co.
Katherine Barrett Wiik, one of the attorneys for the plaintiff, said in an email to Minnesota Lawyer, "This is a significant legal development because previously, there was little appellate authority interpreting Minn. Stat. 604.18,which protects policyholders from bad-faith denials of their first-party insurance claims. The decision honors the Legislature's intent to deter insurers from making low-ball offers rather than appropriately evaluating a policyholder's actual damages under the policy that they purchased."
$1.4 million bad faith verdict
Alison Peterson began to experience severe daily headaches after an automobile accident on Oct. 21, 2009. In December 2012, she started receiving Botox injections to alleviate her pain. Two neurologists told her that her injuries were permanent and she would likely need to keep getting Botox, possibly for the rest of her life.
The driver had liability limits of $50,000 and Peterson settled for $45,000. She then sent Western a settlement demand for payment of the $250,000 UIM limits.
Thirteen months later, when the company had not responded except to ask for medical documentation, Peterson sued. Western had an independent medical evaluation and the doctor said she had only minor soft tissue injuries and found no causal connection between the accident and the headaches. At a mediation, Western made a nuisance-value offer of $2,000 and did not accept Peterson's offer of $200,000.
In May 2016, Western's attorney tried another Botox-treatment headache case in Hennepin County. That jury awarded its plaintiff $1.1 million.
Western raised its offer to $50,000 but Peterson rejected it. The jury awarded her more than $1.4 million. Western paid its limits and the judge granted leave for Peterson to amend her...
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