After an accident it is usually very important
(from the point of view of making a claim) to take a number
of steps immediately in order to preserve evidence and document your claims.
To examine these issues more closely, please visit the following page:
Inital Steps in Making Your Claim
If you wish to examine the
minimum insurance coverages required under
Hawaii state law for most motor vehicles
and for motorcycles then you can do
so at the following two links:
Auto Accidents and Motor Vehicle Insurance for Car Accidents
Motorcycle Accidents and Insurance on Motorcycles
These coverages
generally should be available to help to compensate
a person for loss as the result of negligent operation
of the vehicle. (Optional additional coverages may also be available.)
Insurance
Company Bad Faith in Hawaii
Sometimes when dealing with an insurance company, a claimant
is treated so badly that the wrongful conduct gives rise to
an independent cause of action for insurance company bad faith.
Insurance
policies are generally purchased by policy holders to bring
peace of mind and security. They are supposed to provide
"good neighbors" and "good hands" in
time of need. Increasingly, however, insurance companies
take the approach that they are profit machines for their
stockholders and insiders. Claims adjusters are taught to
be difficult to reach, uncooperative when finally tracked
down and evasive in their responses.
Claim payment is often avoided on the thinnest of excuses-
with an eye toward forcing a financially weakened claimant
into a position of economic desperation and obtaining a settlement
which favors the insurance company. Such tactics are
very common- but in an appropriate case they may give
rise to an independent cause of action for bad faith.
In a bad faith action- a claimant has the benefit of being able to
identify for the jury the insurance company that is mistreating its policy-holder
or beneficiary. As a general rule- claimants are precluded by the Hawaii rules of evidence
from discussing insurance companies in any way during the trial of a liability insurance
claim. This unfortunate situation allows liability insurers to conduct
outrageous character assasination against opposing
litigants while having their profit motive for such bald-faced
smear campaigns obscured from the inquiring minds of jurors. In order to change this
unjust situation, prompt legislative or judicial reversal
of this unfair situation is required. Such deliberate and
unethical conduct by insurance companies should not continue under
a cloak of darkness granted because insurance companies are
rich and politically powerful. However, in a bad faith action-
as opposed to most liability claims- the claimant is able to
identify and expose the wrongdoing of the insurance company.
The
decision of the Hawaii Supreme Court in The Best
Place, Inc. v. Penn America Insurance Co. (Hi Sup Ct No.
16065, June 5, 1996) upheld claims for bad faith conduct
against insurance companies under Hawaii law. When an insurer
wrongfully denies benefits, the insurer may held liable
for consequential damages, emotional distress damages, punative
damages, attorneys fees and more. Although this decision
found only that the insurer is liable for bad faith conduct
toward a person who paid it for insurance coverage, the
reasoning followed by the court indicates that the Hawaii
courts may also recognize insurer responsibility for bad
faith conduct in other situations in the future. The court
referred to an implied covenant of "good faith and
fair dealing".
When addressing the issue of bad faith on the part of an insurance company
one Oregon case was rather specific about the requirements placed on an
insurance company. In the case of Radcliffe v. Franklin National Insurance Company
of New York, 298 P.2d 1002 (Or.1956) at 1020, that court stated:
"it can not be said to be bad faith to deny a claim when there is
substantial evidence to support the denial. ...the minimum requirement is
that the insurer must exercise good faith in disposing of settlement
matters. We do not believe that an insurer displays good faith unless it
gives consideration to the interests of the insured. Good faith may
frequently he determined by ascertaining whose interest was deemed
paramount, the insured’s or the insurer’s, when the insurance company
rejected an offer of settlement; in other words, whose interest was
sacrificed at that time. We have taken note of the fact that a conflict of
interests between the insured and the insurer presents itself when damages
are sought in excess of the policy limits and an offer of settlement which
approximates the policy limit is received. It is essential to know whose
interest must be safeguarded when action is taken upon the offer."
At page 1024 of its opinion that court went on to say:
"The mere rejection of a settlement offer does not suffice to save the
insurer harmless, nor is it sufficient to show that the insurer, in
rejecting a settlement offer, had no evil purposes. Negative elements do
not meet the demands of good faith. A decision by one who is ignorant of
the controlling facts is worthless. Only a decision made by one who
exercised due diligence in apprising himself of the material facts is
entitled to respect as made in good faith."
Deadlines for Bad Faith claims against insurers in Hawaii
Claims for insurer bad faith arise both in contract and
in tort (personal injury). As a result the deadlines for
filing insurance bad faith claims depend upon whether only
contract claims are submitted (such as a request for payment
of the policy benefits or a refund of premiums) or whether
the more encompassing personal injury claims are also sought
(such as emotional distress damages, certain types of consequential
damages or punative damages). For contract claims the applicable
statute of limitations is usually more than years from the breach
of contract. For personal injury claims generally a 2 year
deadline applies from the date of the wrongful conduct until
the claims must be filed in court.
You must file your claims in
court prior to the expiration of such deadlines, or your
claims may be lost—regardless of their merit.
To be wise it is recommended that you immediately contact an attorney
after an accident giving rise to injuries occurs- please do not
hesitate to :
Contact
Accident Lawyer Hawaii now for a free evaluation of your case.
What is insurer bad faith?
The Hawaii Supreme Court has found that there is a legal
duty implied in every insurance contract that the insurer
will act in good faith in dealing with its insured. A breach
of that duty of good faith gives rise to a tort (personal
injury) cause of action against the insurer which is independent
of the original insurance contract claims.
It
is not necessary that the insured show a conscious awareness
of wrongdoing on the part of the insurance company or unjustifiable
conduct on its part in order to assert a claim of bad faith.
It is sufficient to show unfair dealing, such as an unreasonable
delay in the payment of benefits, in order to recover damages
suffered as a result of the insurer's conduct.
An insurer may be held liable for the improper conduct of the
defense of its insured. This is true- even though it is
ultimately determined that the insurer had no duty to defend
or indemnify under the terms of its policy. Delmonte v.
State Farm, Hawaii Supreme Court No. 21351 (February 3,
1999).
Punative damages. In order to recover punative damages- which are
damages intended to punish the wrongdoer over and above
the actual losses suffered by the victim- it is probable
that conduct must be demonstrated which is more that just
unfair dealing. To recover these damages, the insured probably
must prove wanton, oppressive or malicious conduct on the
part of the insurer and/or a conscious indifference to the
consequences. This also may have to be proved by clear and
convincing evidence- not just by a preponderance of the
evidence* which is the usual
standard of proof for personal injury claims.
*To "prove by a preponderance of the evidence" means
to prove that something is more likely so than not so. It
means to prove that something is more probably true than
not true.
No Bad Faith Claims against self-insurers
In the case of Simmons v. Puu 105 Haw 112, 94 P3d 667 (2004) the Hawaii Supreme Court held that that there is no common law tort claim of bad faith settlement practices available to third-party claimants against self-insurers.
Abuse of Process and Bad Faith Claims
(with Thanks to John C. McLaren)
This section discusses
3 recent mainland abuse of process cases where insurance carriers
have used the expenses and delay of litigation to drive plaintiffs/claimants
into the ground. This is a tactic of deterrence which is commonly used by insurers
in order to escape or substantially reduce their claims payouts. It constitutes
a type of conduct which may give rise to claims for insurance company bad faith.
The elements of the tort of abuse of process in Hawaii are stated in Wong v.
Panis, 7 Haw.App. 414, 420-421, 772 P.2d 695, 699-700 (1989). These are “(1) an
ulterior purpose and (2) a willful act in the use of process which is not
proper in the regular conduct of the proceeding.” The ICA held that “[f]or
abuse of process to occur there must be use of the process for an immediate
purpose other than that for which it was designed and intended.”Id.
(It should be noted that the six year limitation period in HRS § 657-1(4) and Hawaii’s
equitable discovery rule may apply to the commencement of an action for
abuse of process - so this type of action may be available long after the
offending conduct.)
In Givens v. Mullikin Ex. Rel. McElwaney, 75 S.W.3d 383, 402 (2002)
the Tennessee Supreme Court held that “abuse of process in the civil
discovery context may lie when (1) the party who employs the process of a
court specifically and primarily intends to increase the burden and expense
of litigation to the other side; and (2) the use of that process not
otherwise be said for the ‘legitimate or reasonably justifiable purposes
advancing [the party’s] interests in the ongoing litigation.”
In Crackel v. Allstate Ins. Co., 92 P.3d 882, 888 (Ariz.App.Div. 2
2004), the Arizona Court of Appeals held that “a litigant may commit abuse
of process while merely defending an underlying action.” The Court said the
plaintiffs “maintain that Allstate used the prospect of sustained and
expensive litigation as a ‘club’ in an attempt to coerce them, and other
similarly situated claimants, to surrender [their] causes of action. We
have little trouble concluding that such a use of court processes would be
improper.” 92 P.3d at 890 (bracketed material added for clarification). The
Court held that “[i]n assessing whether a reasonable jury could determine
that Allstate’s allegedly improper corporate goals constituted a primary
motivation for the use of court proceedings in this case, the trial court
was also entitled to consider evidence of Allstate’s conduct in the
underlying litigation” 92 P.3d at 891. The Court relied on a prior ruling
Nienstedt v. Wetzel, 651 P.2d 876, 882 (Ariz.App.Div.1 1982) which held that
“liability for abuse of process [can be] imposed where the ulterior or
collateral purpose involved has been to expose the injured party to
excessive attorney’s fees and legal expenses.” (bracketed material added for
clarification). The Court held that the trial court properly denied
Allstate’s motion for judgment as a matter of law on the plaintiffs’ abuse
of process claim because they had “raised a question of fact whether
Allstate had abused a specific court process in a fashion not consistent
with reasonably justifiable litigation goals.” 92 P.3d at 894. The Court
upheld the jury’s verdict against Allstate on this claim. 92 P.3d at 885
(Note: The Crackel case involved Allstate's Minor Soft Tissue
Injury (MIST) computer program which is used to "de"-value cases.)
In General Refractories v. Fireman’s Fund Ins., 337 F.3d 297,
308-309 (3rd Cir. 2003) the Third Circuit Court of Appeals cited to Givens
and Nienstedt and reversed the district court’s refusal to allow General
Refractories to amend their complaint to state an abuse of process cause of
action for Fireman’s Fund’s use of the discovery and litigation process as a
tactic for “harassment, draining resources, delaying payment to GRC under
the insurance policy, delaying litigation, and avoiding payment under the
insurance policy.” The Court said the “test courts should use in deciding
what circumstances amount to an abuse of process” is “whether there has been
a ‘perversion’ of the process, or, whether a legal process has been used ‘as
a tactical weapon to coerce a desired result that is not the legitimate
object of the process.’” 337 F.3d at 307.
The rationale and rulings in Givens, Crackel, Nienstedt, and General
Refractories are entirely consistent with the Hawaii Supreme Court’s
rationale and rulings (eg. Kawamata Farms and Matsuura) and would likely be
adopted by the Court.
Links on Bad Faith Claims
(with More thanks to John C. McLaren)
Butler Pappas on Bad Faith http://www.butlerpappas.com/ publications/badfaith.htm
Civility in Depositions
- Hardball Strikes Out http://www.butlerpappas.com/ publications/civility.htm
www.badfaithinsurance.org
Driving
the Stake into the Comparative Bad Faith Defense and Reverse Bad Faith
Claims. Driving the Stake- Comparative Bad Faith.pdf
The
Current State of Comparative Bad Faith http://www.butlerpappas.com/ publications/0304bf.htm
1999-2005 by
Insurance Claims - Accident Lawyer Hawaii.
All rights reserved. Its contents are the property of
William H. Lawson- 
