Bad faith is the unreasonable failure of an insurance company to honor the terms of an insurance policy and deal with a policyholder in good faith. Insurance companies who are found to have acted in bad faith can be liable for punitive damages in addition to contract damages. Some states have bad faith statutes called "Unfair Insurance Claims Practices Acts."
Asbestos Victim Sues ACE Unit to Force Collection of Damages
March 10, 2014 - A Louisiana woman who was awarded more than $6 million in her suit over asbestos exposure has now sued the defendants’ insurers in an effort to collect the judgment.
Insurance Company of North America was one of eight defendants named in the lawsuit filed in U.S. District Court in the Eastern District of Louisiana on behalf of Mary Morvant. According to the complaint, Insurance Company of North America (INA), a unit of ACE Group, had sold liability coverage to Asbestos Corporation Limited from July 1st, 1978, to July 1st, 1981.
Morvant, of Jefferson Parish, Louisiana, had sued Asbestos Corporation in 2012, claiming that she was exposed to asbestos from 1953 to the 1970s and contracted mesothelioma. It is an incurable and terminal cancer caused by asbestos inhalation.
Morvant said the asbestos was manufactured inter alia by Montreal-based Asbestos Corporation. She did not indicate whether she worked at a company facility or lived or worked near to one of its facilities.
Morvant sued Asbestos Corporation in 2012 in state court in New Orleans and on December 17th, 2013, obtained a judgment against the company for $6,420,467. The defendant then appealed to the Louisiana Fourth Circuit Court of Appeal.
In her new suit, Morvant contended that the defendant filed a devolutive appeal, and not a suspensive appeal that might have stayed collection of the judgment. That being the case, she said that she is now entitled to collect on the judgment from Asbestos Corporation’s liability insurers.
Morvant said that INA and the other insurers had valid policies in place with Asbestos Corporation, and that the company complied with its obligations under terms of the coverage.
Aside from INA, defendants include Maryland Casualty Company, Continental Insurance Co., Federal Insurance Co. and Travelers Casualty & Surety Co.
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