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... Held: Actionable Bad Faith Under Kansas Law.
In a recent decision of major proportions, the Tenth Circuit Court of Appeals held that under Kansas Law, a Liability Insurance Company's demonstrated failure to adopt a system or procedure to handle time-limited settlement demands constituted negligence under the record circumstances of that case. Specifically, the Insurance Company's failure to accept a pretrial settlement demand was occasioned by its negligent lack of procedures to handle time-limited demands, and was the proximate cause of suit being filed against its insured, the Federal Appellate Court held. Download Roberts v. Printup (10th Cir. Case No. 08-3189, Opinion Filed February 17, 2010), attached Official Slipsheet Opinion at 17 ("Shelter's negligence was the cause of Printup's exposure to the excess judgment because it necessitated Ms. Roberts' filing of the lawsuit against Printup to protect herself against the running of the statute of limitations."). [Italics added.]
The Appellate Court in that case thus reversed and remanded with instructions to enter judgment against the Insurance Company on a claim of Bad Faith. Download Roberts v. Printup (10th Cir. Case No. 08-3189, Opinion Filed February 17, 2010), attached Official Slipsheet Opinion at 12-13, 17.
In a holding that applied a standard of liability for Breach of Good Faith and Fair Dealing that potentially resonates far beyond the borders of Kansas, the Tenth Circuit further wrote: "Shelter did not give Mr. Printup's interest the same consideration as its own or it would have set up an appropriate system to handle time-sensitive settlement offers." Download Roberts v. Printup (10th Cir. Case No. 08-3189, Opinion Filed February 17, 2010), at 13.
Statutory liability for allegedly failing to adopt and implement reasonable standards for the prompt investigation of claims arising under Insurance policies, is addressed in Dennis J. Wall, "Litigation and Prevention of Insurer Bad Faith" § 3:25 (Third-Party Claims) and § 9:14 (First-Party Claims) (Second Edition McGraw-Hill; 2009 Supplement West Publishing Company).
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