Represent Client in First Party Bad Faith Claim from Auto Accident Involving Mine Worker

The firm represented a national insurance company in a first party bad faith claim by its insured. The case arose from a car accident. A mine employee, who left work, allegedly fell asleep and collided with another vehicle. The occupants of the second vehicle claimed significant injuries. These accident victims filed suit and subsequently added the mine that employed the tortfeasor as a defendant. They claimed their injuries arose from the mine’s negligent supervision of the tortfeasor. The insurer for the mine initially defended the claim but later denied the claim and withdrew a defense, relying upon a total auto exclusion in their CGL policy. After the defense was withdrawn, the mining company failed to assume their own defense and, after failing to answer requests for admission, a judgment totaling $40 million was ultimately entered against it. The insured sued the insurer, claiming there was coverage under the policy, and/or that it waived its right to deny coverage by initially defending without a written reservation of rights. It also claimed the denial was in bad faith. The state trial court ultimately ruled there was coverage under the policy, and thus the insurer was responsible to pay the $40 million judgment entered against the insured. The trial of the bad faith claim was scheduled for a later date. The court’s coverage decision was appealed, and during the appeal a global settlement was reached on all claims.