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Williams v. State Farm Mutual Automobile Insurance Co.12/19/2003
This appeal presents the following question: Under what circumstances may a third party bring a claim of bad-faith failure to pay against an insurer of the party who injured the third party? Danny Williams appeals the Jefferson Circuit Court's summary judgment in favor of State Farm Mutual Automobile Insurance Company ("State Farm") with regard to Williams's bad-faith claims against State Farm. We affirm.
I. Material Facts
The material facts, viewed, as we must, in the light most favorable to Williams, are as follows.
On June 17, 2002, Danny Williams was involved in an automobile accident; Frank Shaw was driving the other vehicle involved in the accident. Shaw, who was killed in the accident, was insured by State Farm. While Williams suffered no personal injuries, his tractor-trailer was damaged.
State Farm opened a claim, and the matter was assigned to Derek Kidd, a State Farm claim representative, for handling. Kidd received a demand from Williams's insurance carrier, Western World Insurance Group, seeking reimbursement of $12,000 Western World had paid Williams on the claim relating to his damaged tractor-trailer, as well as reimbursement of Williams's $1,000 deductible. Attached to that demand was a copy of an appraiser's report obtained by Western World; the appraiser had inspected the tractor-trailer on June 24, 2002. The report contained three independent quotes valuing the tractor-trailer at $15,000, $13,000, and $13,000. The average of the three values was $13,667. The maximum payable under Williams's policy with Western World was $12,000, plus Williams's deductible, for a total of $13,000. Western World was entitled to the salvage. Therefore, if the tractor-trailer was declared a total loss and was not repaired, Williams would lose between $667 and $2,000, depending on which value figure was used.
The appraiser's report shows that the tractor-trailer was in "very good shape" before the accident. Therefore, Williams delayed accepting the tractor-trailer as a total loss while efforts were made to secure an axle that could be used to repair the tractor-trailer. No axle could be located, and Williams then accepted the evaluation of the tractor-trailer as a total loss. On August 5, 2002, State Farm reimbursed Western World the $12,000 it had paid to Williams. State Farm paid Williams directly $1,000, as reimbursement for his deductible.
On September 17, 2002, State Farm received a letter from Williams's attorney, who presented an "offer to settle the balance of Mr. Williams' claim against your insured." The settlement demand included $965 in towing fees plus $5,890 in lost profits, which Williams computed by taking his daily net profit and multiplying it by the 29 "working days" he claims he was without the tractor-trailer (June 18 to July 26).
On September 12, 2002, Kidd wrote Williams's attorney, stating that State Farm would agree to reimburse Williams for the towing charges, but claimed that Williams's demand for 29 days of lost profits was excessive. Specifically, Kidd noted that Williams's tractor-trailer was inspected on June 24 and determined to be a total loss. Kidd stated the claim should have been settled six days after the inspection and offered Williams 11 days of lost profits for a total of $3,420.78. Coupled with the towing charges, State Farm proposed to pay Williams $4,385.78, contingent upon Williams's execution of a full release in favor of Shaw's estate.
Williams's lawyer and Kidd continued to correspond. Williams's lawyer claimed that the delay in settling was caused by unsuccessful attempts to repair the tractor-trailer, and Kidd responded that any delay should not be attributed to
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