Avoiding Charges of Bad Faith – 4
As a result of a serious injury more valuable than available coverage a plaintiff’s lawyer made a policy limits demand on the responsible party’s insurer with a short time limit to accept or reject. The insurer accepted the offer plus reasonable attorneys fees approximately two weeks after the deadline expired. The plaintiff did not accept the payment, entered into a stipulated judgment with the responsible party in exchange for a covenant not to execute and then sued the insurer. After a six-day trial the jury found the actions of the insurer reasonable and the Ninth Circuit refused to allow the claim for bad faith or to require the insurer to pay the stipulated amount.
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