Tennessee Statutory "Bad Faith Refusal to Pay" Claims were recently asserted for alleged failures to settle underlying liability claims, under Section 56-7.105 (now entitled "Additional Liability Upon Insurers and Bonding Companies for Bad-Faith Failure to Pay Promptly"). (TO ACCESS THIS Michie LINK BEGIN WITH TITLE 56 "Insurance," GO TO CHAPTER 7 "Policies and Policyholders," THEN TO PART 1 "General Provisions," AND THEN TO THE STATUTORY SECTION). These Statutory Bad Faith Claims were effectively held barred in a recent Federal case because of an Exclusion of Insurance Coverage in the first place:
For the reasons set forth below, the Court concludes that Defendant's motion for summary judgment should be granted because the allegations and claims in the underlying action did not state claims covered under the Defendant's policy. The claims in the prior action were excluded under the failure to conform exclusion in the Defendant's policy.
Clarcor, Inc. v. Columbia Casualty Co., Download Clarcor, Inc. v. Columbia Casualty Co. (M.D. Tenn. Case No. 3.10.00336, Memorandum [Opinion] Filed December 16, 2010) PUBLIC ACCESS, also published as 2010 WL 5211607 *1 (M.D. Tenn. December 16, 2010).
In addition, the Online Pacer Docket of this Federal case reflects a growing trend in many cases in Courts across the nation, namely, a willingness to shield materials filed by the parties, from public view. This is a disturbing trend which is not limited to Bad Faith Cases nor to Federal Courts. It appears to be difficult to reconcile the routine course of regularly granted judicial seals of materials and information, with a democracy.
Additional features of the Clarcor case are posted on Insurance Bad Faith Law Blog.
Statutory Claims based on alleged Bad Faith Failure to Settle or Pay are analyzed in § 3:25 (Third-Party or Liability Insurance) and §§ 9:14 - 9:16, by Dennis J. Wall, "Litigation and Prevention of Insurer Bad Faith" (Shepard's/McGraw-Hill Second Edition; West Publishing Company 2010 Supplement). "'Bad Faith' Liability Without Coverage: Third Party" Claims are addressed in id., § 3:100, and "'Bad Faith' Liability Without Coverage: First Party" Claims are addressed in id., § 9:25.
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