Crash Victims Lose Bad Faith Claim at Eleventh Circuit Court

According to an August 28, 2015, Law360 article, The Eleventh Circuit Court determined that Clarendon National Insurance Company did not act in bad faith when protecting two of its insureds from a $750,000 excess judgment arising from a car accident in 2006. The court found no evidence to suggest such a claim. Carlos Mesa filed claims against the owner, Jary A. Martinez, and driver of the vehicle, Cesar A. Vega Zalaya.

Mesa stated that Clarendon passed up an opportunity to settle with him as well as failed to advise him on ways to avoid an excess judgment. However, the court found that Clarendon National Insurance Company did act in good faith since the company identified the claimants and reached a settlement of $20,000 per accident policy limit soon after realizing that the $10,000 per person limit was not enough to cover the claimant’s damages.

The court sided with the insurance company and not Carlos Mesa, stating that Clarendon may have not been as proactive in advising its insureds of settlement opportunities but not to the level of bad faith.

“Clarendon’s duty of good faith requires that it investigate the facts and give fair consideration to the prospect of a settlement offer that is reasonable under the circumstances, which it did here”, the court said.

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