Oklahoma Judge Refuses to Dismiss Bad Faith Lawsuit Against CSAA
On August 28, 2019, a federal judge in Oklahoma ruled a bad faith lawsuit against CSAA General Insurance Company (CSAA) could proceed to a jury trial.
The plaintiff in this case, Daniels v. CSAA General Insurance Company, accused the insurer of failing to properly settle her claim for benefits following a December 2017 auto accident. The plaintiff, Tammy Fessenden, was injured in a hit-and-run accident caused by an unidentified vehicle. At the time, Ms. Fessenden was a passenger in a vehicle driven by Tracey Daniels. Ms. Daniels held an auto insurance policy on her vehicle from CSAA. This policy included $250,000 of uninsured/underinsured motorist (UM) coverage.
Ms. Fessenden submitted a demand letter seeking the full $250,000 in benefits. A CSAA adjuster responded by offering to settle with Ms. Fessenden for just $5,000. CSAA previously paid $25,000 under Ms. Daniels’ payments coverage to pay Ms. Fessenden’s medical bills. The $5,000 UM settlement was based on the adjuster’s valuation of Ms. Fessenden’s claim for “pain and suffering.”
In response to the low offer, Ms. Fessenden sued CSAA in Oklahoma state court.
CSAA removed the case to federal court. It then asked for summary judgment on Ms. Fessenden’s bad faith claim. U.S. District Judge David L. Russell denied CSAA’s motion. He noted CSAA had not paid all of Ms. Fessenden’s medical bills. She exhausted the $25,000 limit of Ms. Daniels’ medical coverage. But this still left about $2,700 in uncovered medical bills. Yet CSAA “simply ignored” this when making its $5,000 UM settlement offer.
Judge Russell said there was no explanation for this. And if the $5,000 offer was meant to cover both the unpaid medical bills and Ms. Fesssenden’s pain and suffering, that was also problematic. The adjuster said these “non-economic damages” were worth between $5,000 and $8,000. But CSAA had not explained why its offer was at the low end of even this scale.
Oklahoma City insurance bad faith attorney Tony Gould said it was not uncommon for insurance companies to undervalue an accident victim’s pain and suffering.
“Non-economic damages, by their nature, are difficult to precisely quantify. This does not excuse an insurance company, however, from making a good faith offer to settle a claim. All insurers have a duty under Oklahoma law to adequately investigate a claim before making a settlement offer.”
Contact Brown & Gould today to discuss your case.