JANUARY 2017 BAD FAITH CASES: UNSUCCESSFUL, BUT REASONABLE, LEGAL ARGUMENT CANNOT BE THE BASIS FOR A BAD FAITH CLAIM (Western District)
The insureds won a legal argument as to whether they were entitled to stacking. The insureds later argued that the court should find bad faith against the insurer, on the basis of the insureds’ legal argument prevailing on coverage.
The bad faith claim failed, however, because the carrier’s position was reasonable, even though unsuccessful. “The crux of the Parties’ disagreement - - whether the [vehicle] was added to the [insureds’] policy by endorsement or by the ‘newly acquired vehicle’ clause of the policy - -was resolved in the [the insureds’] favor by this Court, but the authority for both Parties’ positions was reasonably supported by the cases they respectively cited.” Summary judgment was granted to the insurer on the bad faith claim.
