Hartford found in Bad faith for not knowing its own policy
A judgment in excess of $650,000 was affirmed by the Tenth Circuit against Hartford Insurance Company because it did not know the provisions of its own policy, and it changed the reason it denied the claim once suit was filed.
Haberman v. Hartford, 443 F.3d 1257 (10th Cir. Okla. 2006)
In this case, Haberman was the sole shareholder of a corporation. She and an employee were driving on a pleasure trip when the employee lost control of the vehicle. The employee was killed and Haberman was injured. After Haberman collected both the liability and UM limits on the employee’s car (the one involved in the accident), she sought UM coverage under her Hartford policy. The Hartford policy was issued to her corporation and the employee’s car was not a scheduled vehicle. The Hartford policy, however, had an endorsement on the auto policy which specifically named Haberman as an insured for auto liability purposes. Hartford denied the claim. The policy limited UM coverage to specific vehicles and the employee’s car was not a listed vehicle.
On summary judgment motions, the court ruled that the endorsement made Haberman an insured for all purposes under the policy. Even if the policy was ambiguous, the court would have to find for coverage. It therefore entered summary judgment on behalf of Haberman finding coverage. At trial, Haberman was granted judgment as a matter of law on her contract claim and Hartford’s quest to remove punitive damages from the jury was denied. The jury found for Haberman and awarded her $548,000 on the contract claim, $5,000 for actual damages on the bad faith claim and a further $100,000 for punitive damages on the bad faith claim.
The appellate court affirmed both the contract and bad faith findings. Even if there was a legitimate dispute as to coverage, the bad faith claim was appropriately decided by the jury because the reason Hartford gave when it denied the claim (that Haberman was not in a covered vehicle) was different from the reason it gave when it was in court (that Haberman was not an insured). Furthermore, because there was evidence that Hartford ignored its own policy language and well settled Oklahoma law, and because it delayed payment of her med pay claim, there was sufficient evidence to take the question to the jury.
