In Lord v. Allstate Ins. Co.,
No. 4:13-cv-593-TMP, 2014 U.S. Dist. LEXIS 129813 (N.D. Ala. Sept. 17, 2014),
Magistrate Judge Putnam denied Allstate’s request for a partial summary
judgment for the plaintiff’s bad-faith claim.
Between 2003 and 2005, Lord built
a cabin in the woods. Lord and his wife lived in the cabin until 2009
and, after 2009, the cabin was rental property. In 2011 the cabin was
vacant and listed for sale with a realtor for $59,000. A buyer contracted
to purchase the cabin, and a home inspection was performed which noted no
problems with the cabin. However, the sale fell through when the buyer was
unable to obtain financing.
As a result of high wind on April
27, 2011, a large tree fell in the driveway and on the electrical service line
to the cabin, pulling a weather mast away (but not loose) from the structure
and causing roof damage in the area of the weather mast. After the
tornado, Lord went to the cabin and noticed additional structure damage that
had not been present before the storm, such as cracks in walls and door facing,
cracks in the ceiling and floor, and wet and mildewed carpets. Lord made
a claim with Allstate.
Allstate initially engaged an
independent company to adjust the claim. This company assigned Barnes to
inspect the cabin. While Barnes had 30 years’ experience in construction,
he was a full-time barber and this was his first assignment as an
adjuster. Despite Barnes’s and others’ “pleas” that an independent
engineer be engaged, Allstate’s claims handler did not engage an engineer
before there were one or two formal denials and closings of the file.
After receiving these denials,
Lord persisted. FEMA recommended that Jenkins, an architect trained by
FEMA to make assessments of the structural safety of buildings impacted by
natural disasters, be contacted. Jenkins inspected the cabin and prepared
a detailed report explaining how the fallen tree caused the additional
structural damage. Only upon receiving a copy of Jenkins’s report did
Allstate engage an engineer, who Judge Putnam noted was a civil engineer, as
opposed to a structural engineer.
Judge Putnam concluded that a
jury could reasonably find that Allstate denied the claim prior to engaging an
engineer and that Allstate acted in bad faith by not adequately investigating
the claim. Among other things, Allstate ignored the home inspector’s
finding of no problems with the cabin shortly before the wind event, Lord’s
statement that the cracks and other issues did not exist prior to the wind
event and adjuster asking that an engineer be engaged to assess causation.
As the facts in Brechbill
strongly indicated that State Farm acted in good faith, the facts here strongly
demonstrated bad faith.
