Farmers Insurance Beats $9.9M Bad Faith Verdict On Appeal

Law360 (March 9, 2021, 8:13 PM EST) -- A California appeals court in a published decision Monday overturned a $9.9 million bad faith verdict against Farmers Insurance Exchange over the insurer's failure to settle a car crash claim, ruling that bad faith claims need to demonstrate a finding that an insurer acted unreasonably.

In a unanimous 23-page opinion, a three-judge panel ruled that a lower court got it wrong when it awarded Alexander Pinto a nearly $10 million judgment against the insurer because a jury was never instructed, and therefore never found, that the insurer's conduct was unreasonable, a requirement for bad faith damages.

"The special verdict here was...

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