Washington State Law of Bad Faith: A Primer.

   In the Federal Case of American Capital Homes, Inc. v. Greenwich Insurance Co., Download American Capital Homes, Inc. v. Greenwich Insurance Co. (W.D. Wash. Case No. C09.622, Order Filed August 30, 2010) PUBLIC ACCESS also published as 2010 WL 3430495 (W.D. Wash. August 30, 2010)(Westlaw subscription required to access Westlaw), the Court concisely summarized Washington State's Law of Bad Faith, as applied to Liability Insurance Companies in particular:

   An insurance company has a duty of good faith to all of its policyholders.  Smith v. Safeco Ins. Co., 78 P.3d 1274, 1277 (Wash. 2003).  Bad faith handling of an insurance claim is a tort and it is analyzed under general tort principles:  duty, breach of that duty, and damages proximately caused by any breach of duty.  Mut. of Enumclaw Ins. Co. v. Dan Paulson Constr. Co., 169 P.3d 1, 8 (Wash. 2007).  In order to establish bad faith, an insured is required to show the breach was unreasonable, frivolous, or unfounded.  Kirk v. Mt. Airy Insurance Company, 951 P.2d 1124, 1126 (Wash. 1998).  Harm is an essential element of an action for an insurance company's bad faith handling of a claim under a reservation of rights.  Safeco Ins. Co. v. Butler, 823 P.2d 499, 506 (Wash. 1992).  If the insured shows by a preponderance of the evidence the insurance company breached its duty of good faith, there is a presumption of harm.  Id.  The insurance company can rebut the presumption by showing by a preponderance of the evidence that its breach did not harm or prejudice the insured.  Id.  If the insured prevails on the bad faith claim, the insurance company is estopped from denying coverage.  Id.

American Capital Homes, Inc. v. Greenwich Insurance Co., 2010 WL 3430495 at *4.

Good Faith legal standards for handling Liability Insurance Claims are addressed in Section 3:1, Dennis J. Wall, "Litigation and Prevention of Insurer Bad Faith" (Shepard's/McGraw-Hill Second Edition; West Publishing Co. 2010 Supplement), and Burdens of Proof in Third-Party Bad Faith Cases are examined in §§ 3:90 - 3:91.  Good Faith legal standards for handling of First-Party Insurance Claims are addressed in id., §§ 9:3 - 9:8, and Burdens of Proof in First-Party Bad Faith Cases are the focus of id., §§ 9:18 - 9:19.

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Comments

[mary shockley]

I don't know if u can answer this or not.i had a business change my oil on my car and they fudged the job.i have been back and forth with their insurance company for 3 weeks.they said it was their insured's fault but now i just seem to be getting the run around,i have all the proof to take this to court and proof they did mess up.i don't have a car for work now,so what am i to do?

[Dennis Wall]

Answer to "what am I to do": Contact local legal representation. You do not say where you live. Here in the Central Florida area, a resource to search for legal represetation is provided by the Orange County (Florida) Bar Association if a person calls their program and asks, and states their question so that the service can match them up with the most likely legal area of representation, they will be given three names of lawyers who hold themselves out as practicing in that area, without recommending any one of them. Perhaps there is a similar service in your area. Best of Luck.
Dennis Wall