Enrique v. State Farm Mutual Automobile Insurance Co.

Joann Enrique appealed the Superior Court’s grant of summary judgment for State Farm Mutual Automobile Insurance Company in an action she brought for bad faith denial of uninsured motorist (“UM”) coverage stemming from a 2005 car accident. In 2005, an uninsured driver crashed into Enrique’s car by improperly turning into her lane. Enrique suffered a fractured rib, trauma to the right knee requiring arthroscopic surgery, trauma to the left knee for which she was a candidate for arthroscopic surgery, abrasions, and soft tissue injuries. Throughout the settlement negotiations and the processing of Enrique’s claim, State Farm personnel expressed concerns about whether Enrique’s knee injuries were caused by pre-existing conditions. The record was unclear as to why there were large lapses in time during the settlement negotiations. While the parties were waiting for the Independent Medical Examiner report, in July 2008, Enrique filed suit against State Farm, seeking benefits up to the $100,000 policy limits, as well as punitive damages against State Farm for bad faith by refusing to pay up to those limits. In support of the bad faith claim, Enrique alleged that State Farm refused to compensate her up to the UM policy limits without any reasonable justification. In October 2008, the Superior Court severed and stayed the bad faith claim pending resolution of the UM damages claim. The parties then stipulated to a partial dismissal of the bad faith claim without prejudice. Due to the continuing impasse, in September 2008 State Farm decided to advance Enrique $25,000, as the parties both agreed the claim was worth at least that much. As trial approached, State Farm offered Enrique another $20,000 to settle the case, for a total of $45,000. Enrique also revised her demand, and as of January 2010, was willing to settle for an additional $65,000, representing a $90,000 demand. The parties could not bridge the gap, and the damages case went to trial in February 2010. The jury returned a $260,000 verdict. State Farm did not seek remittitur, but did appeal on an evidentiary issue. The Delaware Supreme Court affirmed, and State Farm paid the remaining $75,000 of their policy limits, costs and interests. Enrique then pursued her bad faith claim against State Farm, claiming as damages the unpaid $160,000 portion of the jury verdict, prejudgment interest, and punitive damages. The Superior Court granted State Farm summary judgment because Enrique failed to make a prima facie showing of bad faith. The court based its decision on causation issues arising from Enrique’s pre-existing knee problems (which gave State Farm a reasonable basis for its actions), State Farm’s multiple valuations of Enrique’s claim that put it below policy limits, and her failure to offer facts showing State Farm exhibited reckless indifference in handling her claim. Finding no reversible error as to the Superior Court's grant of summary judgment, the Supreme Court affirmed. View "Enrique v. State Farm Mutual Automobile Insurance Co." on Justia Law