Sometimes it is easy to miss the federal court opinions that involve car crash cases because you just do not expect to see them there. Probably 1% of the car accident cases that we handle end up in federal court – although probably 20% of our truck accident cases get removed to federal court.
Anyway, you are paying me for a reason; I just found an interesting bad faith claim decided last week – Hughes v. Progressive – involving our friends at Progressive. It is a interesting case with a bad outcome that may very well show up on my students’ Insurance Law exam in December.
Plaintiff is broadsided by another car, driven by the defendant (insured by Progressive Insurance and later ends up being plaintiff’s use plaintiff). Plaintiff files suit against the defendant in state court in Baltimore City. Plaintiff also sues GEICO for uninsured – really underinsured – motorist coverage benefits. Defendant had a $100,000 per accident policy with Progressive which, sadly, is the Cadillac of Progressive’s policies.
Progressive does exactly what I always complain that Progressive does: they jerk you around, refusing to settle the case by offering its policy limits, and then finally tendering the limits after talking tough for a year. It must be in their adjuster’s manual.
Progressive sent out a pay-to-play letter (learn more here) to GEICO, who did not respond within 60 days after receipt of notice as required by Maryland insurance law (§ 19-511) if it wishes to retain its subrogation rights. But, somehow, GEICO later claimed it had responded by email. The Baltimore City trial court found that the email amounted to proper notice as a matter of law under §19-511.
Plaintiff went on to try the case and got a $725,000 verdict against GEICO and the defendant. GEICO had $500,000 in coverage. So, defendant owed the balance to the plaintiff. So plaintiff and defendant hug it out and join forces. Plaintiff, as defendant’s assignee or use plaintiff, filed a bad faith complaint against Progressive in Baltimore City Circuit Court. Specifically, plaintiff alleged that Progressive fought for the defendant in this case “with the vigor and energy of a 10th grader in study hall detention.” Continue reading