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Lauzon v. State Farm Mutual Auto Insurance Co.12/5/1995
ENTRY ORDER
NOVEMBER TERM, 1995
In the above-entitled cause, the Clerk will enter:
Plaintiff Phillip Lauzon appeals the grant of summary judgment in favor of defendant State Farm Insurance Company. We affirm.
Plaintiff's suit arose out of a collision with an uninsured motorist on U.S. Route 7 in South Burlington on February 25, 1987. At the time of the accident, plaintiff was insured by defendant for injury and damages caused by an uninsured motorist. The parties settled plaintiff's claim for property damages resulting from the accident, but were unable to reach agreement on personal injury damages.
In January 1990, plaintiff filed a claim against defendant under the uninsured motorist provision of his insurance policy, seeking compensation for personal injuries. Defendant filed a subrogation suit in plaintiff's name against the uninsured motorist on February 20, 1990. Because of uncertainties surrounding the nature and extent of plaintiff's injuries, defendant moved to compel arbitration of plaintiff's uninsured motorist claim. Plaintiff then amended his complaint, alleging additional claims of bad faith, violation of the Vermont Insurance Trade Practices Act, and breach of fiduciary duty. Relying on a provision in plaintiff's insurance policy allowing either party to request arbitration, the superior court granted defendant's motion to compel arbitration. In March 1992, a panel of three arbitrators found in favor of plaintiff, awarding him $17,500, which defendant paid in full.
On January 4, 1993, the superior court granted a default judgment in favor of defendant in its subrogation action against the uninsured motorist. On January 27, 1993, plaintiff initiated the present action against defendant, alleging (1) tortious bad faith, (2) breach of the duty of good faith and fair dealing, (3) breach of fiduciary duty, and (4) violation of 8 V.S.A. ยง 4724. Defendant moved for summary judgment, and the superior court granted the motion.
Plaintiff appeals the grant of summary judgment only on the issues of tortious bad faith, breach of the duty of good faith and fair dealing, and breach of fiduciary duty. We review a motion for summary judgment using the same standard applied by the trial court: summary judgment is appropriate only when the materials before the court clearly show that there is no genuine issue of material fact. Morrisville Lumber Co. v. Okcuoglu, 148 Vt. 180, 182-83, 531 A.2d 887, 888-89 (1987). The burden of proof rests on the moving party, and the opposing party must be given the benefit of all reasonable doubts and inferences in determining whether a genuine issue of material fact exists. Price v. Leland, 149 Vt. 518, 521, 546 A.2d 793, 796 (1988).
Plaintiff alleges that defendant acted in bad faith in the handling of his insurance claim. We recently held that an action for bad faith failure of an insurer to pay a claim filed by its insured exists in Vermont. Bushey v. Allstate Ins. Co., No. 95-069, slip op. at 3 (Vt. Oct. 27, 1995). To establish a claim for bad faith, a plaintiff has the burden to show that (1) the insurance company had no reasonable basis to deny benefits of the policy, and (2) the company knew or recklessly disregarded the fact that no reasonable basis existed for denying the claim. Id. Plaintiff failed to meet this burden. Defendant presented facts that show reasonable bases for its actions, and plaintiff did not dispute these facts or rebut them with admissible evidence. Under the terms of the contract between plaintiff and defendant, the question of liability and the extent of that liability must either be agreed upon by the parties or go to arbitration. Defendant refused
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