Bad Faith insurance is a frequent topic when a person feels like they have been treated improperly by their insurance company. This issue is discussed in a 2021 opinion from the Eastern District of Texas. The opinion is styled, Aspen Specialty Insurance Company v. Yin Investments USA, LP.
This opinion was issued on competing Motions For Summary Judgment. The only part discussed here deals with the “bad faith” claims at issue.
As stated by the Court, in Texas, insurance companies have a duty to deal fairly and in good faith with an insured in the processing of claims. To succeed on a bad-faith claim, the insured must establish the absence of a reasonable basis for denying or delaying payment of the claim and that the insurer knew, or should have known, that there was no reasonable basis for denying or delaying payment of the claim.
An insurer will be liable if the insurer knew or should have known that it was reasonably clear that the claim was covered. An insured can prevail on its bad faith claim if it shows that there were no facts before the insurer which, if believed, would justify denial of the claim. On the other hand, if, after a reasonable investigation, the insurer has evidence showing that the insured’s claim may be invalid, a bad faith action is not viable. An insurer can deny debatable claims without being liable for breach of the duty of dealing in good faith.
In this case, part of the argument was whether an investigator hired by Aspen can be shown to be biased.
Aspen hired an investigator, who inspected the property on at least two occasions, and Aspen’s reliance on its investigator’s findings was prima facie reasonable due to the nature, value, and complexity of the claim and the investigator’s report. Yin’s evidence does not so undermine that report as to allow a jury to conclude, not only that Yin is entitled to coverage, but that any conclusion otherwise was in bad faith because coverage is that clear. Yin has not identified evidence that Aspen immediately marked Yin’s claim as suspicious, failed to examine whether a hail storm occurred, or ignored commonly considered evidence.
Nothing in Aspen’s investigator’s report suggests that his inspection was done in a manner calculated to construct a pretextual basis for denial. And nothing about the history of the development of that report fairly supports such an inference. Charles Bertschi, one of Aspen’s inspectors, stated that he and the other inspectors had to return to the property in October because “we were not provided the ability, on our first visit (August 22, 2019), to take destructive testing.” He also stated that they went back in October because “[w]e needed to complete . . .
a more thorough investigation of the roof. We were not given enough time during the August inspection.” Bertschi stated that the delay in rescheduling (from August to October) was in part based on “back and forth with the public adjuster” and “delays related to weather.” He further explained that, after the October
2019 inspection, the inspectors issuing the report were delayed because they were waiting for the public adjuster to “present his claim or any documents in support of his claim. And then none were received. And we waited for the engineer to produce his findings.”
Against this evidence, Yin provides no evidence showing a pretextual basis for denial.
The Motion For Summary Judgment on the bad faith claims was granted in favor of Aspen.