November 2016

Insurance Provider Wins Dismissal of Bad Faith Claims in Statewide Class Action

A national insurance provider was sued in a statewide class action asserting bad faith claims for alleged improper claim settlement practices involving the allocation of payments to medical lienholders. Before filing an answer, Faegre Baker Daniels learned that the named-plaintiff had declared personal bankruptcy after her bad faith claims had accrued, and because those claims had not been disclosed in bankruptcy, they remained property of the bankruptcy estate.

FaegreBD worked with the bankruptcy trustee to reopen the bankruptcy case and settled all claims for a nominal 4-figure sum in exchange for a complete release. The release deprived plaintiff of standing to pursue her bad faith claims in federal civil court, which were therefore promptly dismissed with prejudice.

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