In Midtown Hotel Grp. LLC v. Selective Ins. Co. of Am., No. CV-22-01395-PHX-JAT, 2023 WL 8436560 (D. Ariz. Dec. 5, 2023), the District Court clarified the Arizona Supreme Court's Zilisch decision as follows:
However, despite the evidence introduced at trial of the institutional practices of the insurer in Zilisch [v. State Farm Auto. Ins. Co., 995 P.2d 276 (Ariz. 2000)], the underlying claim was that of bad faith for denial of plaintiff’s individual claim—the same as the present case. [Citation and parenthetical omitted.] The Arizona Supreme Court included the evidence that the insurer engaged in institutional practices of incentivizing employees to pay out less on claims among other evidence specific to the individualized claim at hand. [Citation omitted.]. In other words, the fact that there was evidence the insurer in Zilisch had engaged in institutionalized bad faith served as supporting evidence for the individualized claim, not as a claim itself.
Midtown, 2023 WL 8436560, at *1.
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