Jury awards $1.76M in bad faith case.

Byline: Bill Cresenzo

A Guilford County jury has awarded $1.76 million to an insurance company which alleged that another insurer bungled a personal injury lawsuit in South Carolina federal court, leading to a $3.76 million mid-trial settlement.

The case began with an October 2014 wreck in Marlboro County, South Carolina, in which a 61-year-old man and his wife were injured when a tractor-trailer driver rear-ended his vehicle while the driver of the tractor-trailer was talking on his cell phone. The couple filed lawsuits against the driver and his employer, Unifi Manufacturing. The husband's lawsuit was later removed to federal court in South Carolina, while his wife's remained under the state's jurisdiction.

Unifi had a $2 million primary liability insurance policy with The Hartford and an umbrella insurance policy, which provides excess liability insurance, with Travelers. A representative of Travelers "implored" The Hartford to settle the claims within the policy limits, the company says, because of a "laundry" list of aggravating factors, including admissions that the driver of the tractor-trailer was on his cell phone in violation of company policy and was speeding.

Nevertheless, after nearly six months of mediation, The Hartford offered only $450,000 to settle the cases, against the plaintiffs' demand of $3.5 million. Travelers sent another letter to The Hartford, demanding that it settle. About two weeks before trial, the plaintiffs offered to settle their cases for the policy limits of $2 million. The Hartford refused, and the case went to trial in November 2016.

It proved to be a costly decision. After two days of trial, the defendants agreed to settle the case. Travelers alleged that The Hartford tendered its remaining policy limits without negotiating any reduction in the couple's demand or giving Travelers any advance notice, and that as a result it was forced to agree to a settlement that left it on the hook for $1.76 million in excess of the policy limits.

The company then sued The Hartford in North Carolina, where Unifi is headquartered, alleging a bad faith failure to...