In its decision in the case of Ass Kickin Ranch, LLC [I'm not making this up] v. North Star Mutual Insurance Co., 2012 WL 4960082 (S.D. October 17, 2012), the Supreme Court of South Dakota silently aligned South Dakota with all the many other jurisdictions in which the Courts have held that where there is no Insurance Coverage, there is no Insurance Bad Faith.
This was a First-Party Insurance case involving damage caused by a fire to two unassembled wind turbines. The Policyholder Ranch claimed Coverage from North Star Mutual "for [damage to] unscheduled farm personal property". North Star Mutual denied all Coverage because of "Coverage F, subparagraph 5(g), [under which] the policy excluded coverage for 'fences, windmills, windchargers, or their towers.'" Ass Kickin Ranch, LLC v. North Star Mutual Insurance Co., 2012 WL 4960082 *1, ¶¶ 1, 4 (S.D. October 17, 2012).
The Supreme Court of South Dakota applied what it said is the plain meaning of this Insurance Contract. In its view, the Ranch's unassembled wind turbines were clearly and plainly excluded "windmills" and "windchargers". The "plain and ordinary meaning of these words" included the "unassembled wind turbines" at issue, the Court held. Ass Kickin Ranch, LLC v. North Star Mutual Insurance Co., 2012 WL 4960082 *3, ¶ 13 (S.D. October 17, 2012).
The Supreme Court never addressed the Bad Faith claim directly, however. It expressly mentioned the Bad Faith claim only once, at the beginning of its opinion in this case and only to describe the procedural posture of the appeal. The Court simply stated at the outset that the Policyholder Ranch claimed that North Star breached the First-Party Insurance Contract, "and acted in bad faith in denying coverage". Ass Kickin Ranch, LLC v. North Star Mutual Insurance Co., 2012 WL 4960082 *1, ¶ 1 (S.D. October 17, 2012).
The Court never mentioned Bad Faith again. It did, however, affirm the Trial Court's grant of North Star's Motion for Summary Judgment. Ass Kickin Ranch, LLC v. North Star Mutual Insurance Co., 2012 WL 4960082 *6, ¶ 23 (S.D. October 17, 2012).
The actual holding on the Bad Faith claim in this case, to the effect that where there is no Insurance Coverage, there is no Bad Faith, is the majority view of Courts in United States jurisdictions whether in Third-Party or Liability Insurance cases, or in First-Party cases of just about any kind. See DENNIS J. WALL, "LITIGATION AND PREVENTION OF INSURER BAD FAITH" §§ 5:14, 5:24, 5:49 ("Coverage or Policy Defenses" to claims of third -party bad faith failure to settle, wrongful refusal to defend, and inadequacy of defense, respectively) & § 11:1 ("Coverage and policy defenses to insurance coverage" in first-party cases)(Third Edition, 2012 Supplement, West Publishing Co.).
Dennis Wall is a featured speaker at this year's National Forum on Bad Faith Litigation in Orlando, Florida on November 28 and 29, 2012. I am told that if you mention my name if you register to attend this Forum through October 31, 2012, you can receive a discount on registration. Mention my name as a speaker when registering by telephone to get the discount. The ACI contact information is on the American Conference Institute's website at www.americanconference.com/badfaith.
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Posted by: solicitor blanchardstown | November 08, 2012 at 06:22 AM