Mansell, Engel & Cole

Competing claims in insurance breach of contract case

The chance of a policyholder in Oklahoma or elsewhere prevailing in a damage claim filed with an insurer obviously increases exponentially when damage allegations can be supported by compelling evidence.

And when a claimant tells the truth.

That latter point was heavily underscored for principals of a land investment company in one state recently by a federal court awarding an insurance entity defendant with a summary judgment ruling in a civil trial. That matter centrally featured claims by the investment firm that its insurance provider unlawfully refused to pay for damages inflicted by vandals at its commercial properties.

In fact, the insured party filed two distinct claims. National insurer Allstate partially covered the claimed damage relevant in the first filing. Prior to fully completing its investigation, plaintiff American Land Investment (ALI) commenced a lawsuit against the insurer for its alleged bad faith and contract breach in delaying full payment on all legitimate claims.

Allstate’s stated response was direct and unequivocal. The insurer petitioned the court for dismissal of the case, arguing that uncovered evidence revealed the insured’s fraudulent intent to promote false facts. Allstate specifically contended that ALI’s material misrepresentations concerning the cause of damages voided the insurance policy.

Although the court did not go so far as to void the contract, it did find that ALI engaged in multiple falsehoods aimed at securing unlawful benefits. That behavior barred recovery, noted the court, and served to dismiss the case. A federal appellate court recently upheld the lower tribunal’s ruling.

The case underscores that concealment, misrepresentation and fraud in an insurance case is not behavior authored solely by insurers; courts sometimes rule against policyholders as well in such matters.

Arguably, though, it is far more often the case that an insurer’s bad-faith conduct is the core issue in litigation. When it is, an aggrieved insured can turn to a proven and aggressive insurance law legal team for diligent representation aimed at securing maximum compensation.

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