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The Connecticut Appellate Court reversed a decision to dismiss bad-faith claims against Government Employees Insurance Co. (GEICO) for allegedly purposefully delaying the plaintiff's attempts to collect a payout for an underinsured motorist.
The plaintiff's counsel hopes the ruling is a road map for bringing successful challenges against insurers.
"At a certain point, you've got to go all the way, or [the insurance companies] are never going to learn," said attorney Kevin Ferry, who brought the suit in Connecticut on behalf of client Saadia Bouazza. "I actually feel it's my obligation to expose these types of claims to raise the boats for everyone else out there."
Alleged 'systemic abuse'
Bouazza sought UIM benefits after another driver allegedly caused a car accident. Bouazza settled with that driver for the full policy limit, but Bouazza's insurance policy provided UIM benefits.
The day before jury selection, Bouazza requested to amend the complaint to add a second count of bad faith. The court decided to bifurcate, splitting the trial into two parts, and allowed Bouazza to amend the complaint afterward.
The jury awarded Bouazza $2,262,000, which was reduced to $79,000 to reflect the UIM policy terms and Connecticut General Statutes §39a-336(b).
Thereafter, the trial court agreed with the defendant's motion to dismiss Bouazza's bad-faith claims because the allegations concerned GEICO's actions during settlement negotiations, and concluded that GEICO's conduct was protected by the litigation privilege.
However, the Appellate Court concluded that some of the allegations that GEICO failed to promptly and properly evaluate Bouazza's claim for UIM benefits did not occur during the judicial proceeding and are not protected by the litigation privilege.
Bouazza claimed GEICO's actions were a "systemic abuse of the plaintiff's claim, forcing her into the judicial system and all the way through an arduous trial."
Defense
Counsel for Geico, Karen L. Dowd and Michael A. Lanza of McElroy, Deutsch, Mulvaney & Carpenter; and Joseph M. Busher Jr. of Jackson O'Keefe, did not respond to a request for comment.
But GEICO argued that Bouazza's allegations reflected disagreements during the litigation over the negotiation of the settlement and fair value.
It further claimed that the litigation privilege extended over all the discussions regarding the Bouazza's insurance claims.
'We're not a settlement firm'
Ferry of Ferry Law, counsel for the plaintiff, claimed he hopes the Appellate Court's decision starts a trend of challenges to insurance companies to force businesses, such as GEICO, to treat their customers with "decency, respect, compassion and actually follow the contract."
"The key is that the bar in Connecticut needs to know how to carefully and properly plead bad-faith claims," Ferry said. "A lawsuit is all about providing the right keys to unlock certain doors. It's a magic language … and if you use the right language, if you stay away from things that could be considered conduct during litigation, you'll be able to find your path that survives."
Ferry added that it's crucial to find the right client who is willing to stick out the years of litigation.
"One of the things that we do before we accept the case is … we tell them that we're not a settlement firm," Ferry said. "We're here to litigate. If I could try every one of my cases, I would. Obviously, there are times when settlement is the right thing to do, but we tell them up front what is expected, and that goes a long way."
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