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Badillo v. Mid Century Insurance Co.6/21/2005
d faith to this jury.
Insurance companies, like other companies seeking to increase their market and customer base, have turned to mass marketing of liability insurance policies just as other companies market soap and cars. Through its advertising, the insurance company beckons the consumer to do business with it based upon slogans that suggest the liability insurance company will look after its customer's best interest. The insurance company promises the customer will be in good hands and treated with caring and neighborly concern. Soothing and comforting music plays in the background of these advertisements. Based on these advertisements, it is only reasonable for customers to rely on the insurance company to handle claims with care and concern for the customer's financial and legal interests.
These reassurances are part of the insurance contract requiring an insurance company to act in good faith and fair dealing toward its customers. See Wathor v. Mutual Assurance Adm'rs, Inc., 2004 OK 2, 5, 87 P.3d 559, 561. The insurance contract places more responsibility on the insurance company than just paying claims. Christian v. American Home Assurance Co., 1977 OK 141, 24, 577 P.2d 899, 904. Liability insurance coverage is more than just a performance or surety bond that will be paid if a claim is justified.
When a liability insurance policy is purchased, the customer is buying more than just the payment of a potential claim. The customer is buying coverage. The customer is buying comfort. The customer is buying peace of mind. The customer is buying the skill of the insurance company to negotiate and settle claims in his best legal and financial interest. The customer is buying the right to counsel and the best advice the insurance company has to offer.
The essence of the insurance company's contractual duty owed in this case is set out in the majority opinion at paragraph 26 which states:
In dealing with third parties, however, the insured's interests must be given faithful consideration and the insurer must treat a claim being made by a third party against its insured's liability policy "as if the insurer alone were liable for the entire amount" of the claim. . . .
(Citations omitted.)
If the insurance company in this case had acted with good faith and fair dealing, Mr. Badillo would have been called to consult with the professional claims staff about the request that he give a statement. He would have been encouraged to give such a statement. The statement may have been very helpful in settling this case. The statement would have been that Badillo was not drinking, was not on an employer-related errand, made $8.50 an hour, had few assets, had no other insurance, and was basically "judgment proof". At the very least, a strategy could have been developed attempting to protect Mr. Badillo rather than leave him hanging out for his financial life. The insurance company at least owed him this service.
This minimal effort by the insurance company would have been a basis for a successful defense against this bad faith claim and also would have potentially limited Badillo's liability to his policy limits. If the insurance company had handled this case with care and neighborly concern, the extent of its liability would have been the $10,000 policy limit.
There is a nationwide debate about "lawsuit abuse" and the proliferation of lawsuits. It will be a good day for all when the size and number of lawsuits go down. But as long as there are cases with evidence such as in this case, judges must submit these issues to a jury and let a jury decide. This lawsuit shows the role of the courts in carr
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