Two Federal Court decisions highlight intricacies of Missouri Law. In one, an established line of Missouri case law was followed by the Eighth Circuit Court of Appeals in a First-Party Case, to the effect that there is no "vexatious refusal" to pay an Insurance Claim under Missouri Law if there is no Missouri Case on point. Macheca Transport Co. v. Philadelphia Indemnity Insurance Co., 2011 WL 3444553 *11 (8th Cir. Case No. 10-1482, Opinion Filed August 9, 2011)("When no Missouri case directly addresses a coverage issue, a litigiable issue exists." [emphasis added])(authorized password required to access Westlaw). This viewpoint appears to be at odds with the decisions in every other United States jurisdiction. See generally Dennis J. Wall, "Litigation and Prevention of Insurer Bad Faith" § 11:17, "Fairly or Reasonably Debatable Claims" (Third Edition 2011 West Publishing Co.).
In another case, Reserves were not set too high by a surety/indemnitor Insurance Company in the eyes of a Federal District Judge, and so the Insurance Company's setting of reserves in this case was not a good defense of "Bad Faith" under Missouri Law, in opposition to an equitable Claim in this case. The decision involved the Plaintiff Insurance Company's Motion for Partial Summary Judgment on its Claim, in Equity, for Specific Performance of collateral security clauses: Download Safeco Ins. Co. of Am.v. Lake Asphalt Paving & Constr., LLC (E.D. Mo. Case No. 4.10CV1160, Memorandum and Order Filed Aug. 5, 2011) PUBLIC ACCESS, also published as Safeco Insurance Company of America v. Lake Asphalt Paving & Construction, LLC, 2011 WL 3439129 *6 (E.D. Mo. August 5, 2011)(authorized password required to access Westlaw). Regarding the role of Reserves in Bond and other Insurance Bad Faith Cases, see generally Dennis J. Wall, supra, §§ 8:6 "Home Office Claims Files and Setting of Reserves" in Third-Party Cases including Discovery, and 12:16, "Discovery of Reserves on First-Party Claims".
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