Much of my work as a Missouri auto accident attorney focuses on insurance coverage — whether insurers should pay claims of their insureds. This is more complex than it might sound, because insurance companies make the most money when the minimize what they pay on claims. And of course, they write their policies to minimize their payments, at least within the confines of the law — but state law allows injured drivers to fight back. That was what happened in Tripp v. Western National Mutual Insurance, an auto accident insurance case decided by the Eighth U.S. Circuit Court of Appeals. Driver Cindy Tripp and her husband, Lyle Tripp, sued Western for bad faith and breach of contract when it refused to provide the full amount of their underinsured motorist coverage. They lost on the bad faith claim but won both the money and attorney fees, and the Eighth Circuit upheld the attorney fee award.
Cindy Tripp and her daughter were going shopping when their car was rear-ended by Jeffrey Christiansen, hard enough to deploy Christiansen’s airbag. Tripp suffered $3,000 in property damage and recurring pain and sleeplessness that have affected her daily life and her work. After the crash, Western offered Tripp only the $5,000 limit of her medical-pay insurance; she settled with Christiansen’s insurance company for an additional $87,000, then made a claim on her own underinsured motorist insurance for $150,000, the limit she could legally obtain. Despite estimating the case’s worth at $120,000 to $150,000, Western offered Tripp $10,000. Instead of taking the offer, she sued for breach of contract and bad faith. The jury found for Tripp on breach of contract and awarded her $150,000, but did not find bad faith. The trial court awarded Tripp attorney fees under a South Dakota state law allowing such an award when an insurer’s refusal to pay is “vexatious or without reasonable cause.”
Western appealed the attorney fee award to the Eighth Circuit, arguing that the trial court was wrong on both the facts and the law to award the attorney fees because Western had won on the bad faith count. The Eighth disagreed. The South Dakota Supreme Court has consistently found no connection between insurance bad faith, a tort, and the statutory right to attorney fees when conduct was “vexatious or without reasonable cause.” When a jury finds in favor of an insured on bad faith, the court noted, South Dakota caselaw requires a separate analysis of whether the refusal to pay was vexatious. Thus, the Eighth expressly ruled that attorney fees for refusal to pay that is “vexatious or without reasonable cause” can stand even when bad faith is not found, and requires a separate analysis. It also rejected Western’s argument that the facts don’t support the “vexatious” finding in its case, noting that Western itself valued the claim at $10,000 to $140,000 more than its original offer to Tripp, and never investigated the loss independently. Thus, it upheld the district court.
As a southern Illinois motor vehicle accident lawyer, I applaud the ruling in this case. Judging by this opinion, neither the statute itself nor the caselaw in South Dakota supports Western’s position, making it odd that Western chose to fight the issue into the Eighth Circuit. While insurance companies may have all kinds of reasons to appeal their cases, this kind of protracted litigation can be hard on injured plaintiffs who are obligated to defend themselves and their judgments on appeal. An individual like Cindy Tripp is unlikely to have the financial resources to match Western’s, which means she may have been further strained financially by the case, after already suffering the economic losses of her injury. As a St. Louis car accident attorney, it’s my job to level the playing field whenever possible in the face of this gross power imbalance.
If you or someone you love was involved n a serous car accident through no fault of your own, you may have an injury case. To tell us about it and learn more about your rights, call Carey, Danis & Lowe today at 1-877-678-3400 or send us a message online.
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