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Federal Appellate Court Finds Insurance Company May Have Unreasonably Delayed Coverage, Exposing the Company to Additional Damages

Earlier this month, a federal appellate court issued a written opinion stemming from a car accident involving a drunk driver, his passenger, and the company that insured both of them. In the case, Peden v. State Farm, the court reversed a lower court’s ruling that had held State Farm did not unreasonably delay payment to Ms. Peden. As a result of the court’s decision, the case was remanded back to the trial court to proceed toward trial.

Parked VanThe Facts of the Case

Mr. Graf had just bought his fiancée a new van for her birthday. To celebrate the occasion, the couple gathered friends for a small party, where alcohol was served. The plaintiff, Peden, was one of the couple’s friends.

At some point during the evening, Peden and several others got into the van so that Mr. Graf could take a picture of the group in the new van. However, Mr. Graf then got into the driver’s seat and took the car on a joy ride. He crashed the van, seriously injuring Peden, who then filed a personal injury lawsuit against Graf.

State Farm carried an auto insurance policy for Graf and was therefore contractually obligated to indemnify Graf. Additionally, Peden had an auto insurance policy through State Farm that included an underinsured motorist provision. Peden sought damages from State Farm up to Graf’s policy limit, as well as additional damages under her own underinsured motorist policy provision.

State Farm paid Peden $210,000 under Graf’s policy but denied the claim under her own policy. State Farm claimed that Peden had assumed the risk of injury by getting into the vehicle with a driver she knew to be intoxicated. Peden filed a lawsuit to compel State Farm to pay, and during the pendency of that lawsuit, State Farm discovered additional information and paid Peden another $350,000. Once she received the total amount, Peden then filed a claim against State Farm, claiming the insurance company unreasonably delayed settling her claim.

The trial court initially dismissed Peden’s claim, and Peden appealed. On appeal, the court explained that State Farm had a duty to Peden to investigate her claim to determine whether it had merit. Since State Farm’s investigation was lacking, the court held, the company may have unreasonably delayed settling the claim. Thus, the lower court’s decision to dismiss Peden’s case was in error, and the decision was reversed. As a result, Peden will be able to pursue her claim against State Farm.

Have You Been Injured in a Serious South Florida Accident?

If you or a loved one has recently been injured in any kind of South Florida car accident, you may be entitled to monetary compensation. However, it is almost certain that before you receive compensation, you will need to deal with an insurance company that may try to take advantage of you by offering a low-ball settlement offer or by denying your claim outright. The personal injury attorneys at the South Florida law firm of Cohn & Smith have decades of experience representing injured clients in auto accident cases against insurance companies, and we know what it takes to get our clients the compensation they deserve. Call 954-431-8100 today to set up a free consultation.

Related Blog Posts:

Johnson & Johnson Seeks to Reverse $65 Million Baby Powder Verdict, South Florida Injury Attorney Blog, November 16, 2016.

Court Holds Case Arising from Injury Occurring While Transporting Plaintiff to Hospital Must Comply with Medical Malpractice Requirements, South Florida Injury Attorney Blog, November 2, 2016.

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