In Bamford, Inc. v. Regent Insurance Company, one of Bamford’s employees caused an accident and Bamford told Regent to settle the resulting claims within its policy limits of $6M. There was no settlement, and a judgment was entered against Bamford for $10.6M. The damages included a claim on behalf of the other driver’s estate. A pipe was dislodged from the Bamford truck, went through the other car and through the other driver, pinning him to the car. There was a policy limits offer from the underlying plaintiffs. Before trial, the court struck Bamford’s loss of consciousness defense and directed a verdict against Bamford on liability. After the excess verdict, Bamford sued Regent for failure to settle the case within the policy limits. A jury found for Bamford, and Regent appealed. The 8th Circuit affirmed.
Under Nebraska law, an insurer’s bad faith failure to settle within policy limits can be demonstrated by:
 the insurance company’s unwarranted rejection of an offer to settle within the policy limits, or  a complete and total failure to take into account the potential liability of its insured for an excess judgment, or  an insurer’s failure to timely and adequately inform its insured of the insurer’s adverse interest, of settlement, demands and offers, and of the potential value of the case.
Regent claimed that its failure to settle was not bad faith, but was an honest mistake in judgment. Regent pointed to its multiple efforts to settle; its increase of its reserves and offers; the advice and valuations of adjusters and two mediators as well as senior management; Nebraska’s reputation as a conservative jury verdict jurisdiction; the valuation of opposing counsel that the verdict would be at least in the $3.5 to $4.5 million range; and Regent believed that settlement negotiations would continue during the trial. But, while this evidence might support a verdict in favor of Regent, there was evidence to support the jury verdict, and the judgment against Regent was affirmed.
Here, the jury could have concluded that Regent—by relying on valuations received from mediators, counsel, and internal adjusters—reasonably embraced a low value for the [underlying plaintiffs’] claims early in the case, but ultimately acted in bad faith in failing to reassess the value of the claims in light of case developments and advice from its own players that the low value was inaccurate.