On Friday, April 27, 2017, the Virginia Supreme Court decided Manu v. GEICO Casualty Company, Record No. 160852, 2017 Va. Lexis 70 (Va. April 27, 2017), a "bad faith" opinion significant to insurers that issue family automobile policies in Virginia.
Plaintiff was a passenger in a car involved in a multi-vehicle accident. Plaintiff sued the driver of his vehicle plus the unknown "John Doe" driver of another vehicle involved in the accident. Plaintiff made a UM claim against GEICO, his insurance company, which appeared and defended John Doe. GEICO rejected plaintiff's pre-trial settlement demand. Plaintiff then obtained a verdict against John Doe.
In a subsequent "bad faith" suit, Plaintiff sued GEICO, alleging it failed to evaluate, adjust, and settle his UM claim in good faith. He sought as damages his legal fees, interest, and the uncompensated part of the underlying judgment.
The Virginia Supreme Court held that the UM statute did not obligate a UM insurer to pay until the plaintiff obtained a judgment in his favor. As a result, there could be no "bad faith" conduct by an insurance company when evaluating a claim and deciding whether to settle it.
This is an important decision for insurance companies handling UM claims in Virginia invoking Virginia policies. The Supreme Court resolved an issue in favor of insurers that had caused some confusion in lower courts. There is the possibility that the opinion may catch the attention of the legislature.
Furthermore, the question of whether there can be "bad faith" when adjusting an underinsurance claim was not addressed by this opinion. It was, however, favorably resolved like Manu in an unpublished order issued the same day. Conner v. Glasgow, Record No. 160611, 2017 Va. Unpub. Lexis 10 (Va. April 27, 2017).
If you need assistance with a UM/UIM claim or need guidance on developments in insurance law, please contact litigation attorney Lex Dunn.
Lawrence ("Lex") A. Dunn represents parties in a wide range of civil litigation matters including products liability; life, health, and disability matters; construction matters; trucking claims, insurance agent-broker liability, premise and retail liability, community association liability, and insurance coverage disputes. His experience also includes providing insurance coverage opinions, mediation, binding arbitration and inter-company insurance procedures. Lex has extensive jury trial experience in both Virginia state courts and federal courts.
