Proactive Claims Handling Defeats Vexatious Claim

by | January, 2023 | Legal News

Do not get frustrated with claimant’s and their counsel’s stonewalling. Stay proactive and on top of each claim and avoid vexatious claims.

In Dickey v. AMCO Ins. Co., Plaintiff claimed she was injured by an uninsured driver in November 2015 and made a claim for UM benefits. AMCO immediately paid the $5,000.00 med pay limit and on June 6, 2016 opened negotiation on the UM claim with an initial offer.  Between June 2016 and August 2018, AMCO made twelve separate written requests of Plaintiff following up on the initial offer, requesting additional information, and/or soliciting a demand. In addition to those written requests, AMCO also left several messages requesting additional information and/or soliciting a demand. As is typical in many such communications, Plaintiff’s counsel went without a response.

Subsequently, in August 2018, Plaintiff made a demand for $65,300.00, providing evidence of medical bills of $14,150.63 and lost profits of $14,838.50. AMCO countered with an offer of $6,000.00 in October 2018. Between October 2018 and March 2019, AMCO made multiple written and telephonic attempts soliciting further negotiations. In March 2019, Plaintiff’s counsel lowered the demand to $40,000.00 and AMCO countered with $7,500,00 and again followed up several times, without response, until suit was filed. By this time, AMCO had a well-documented claim file.

The trial court entered summary judgment on Plaintiff’s claim for vexatious refusal to pay, finding that there were open questions of fact regarding the nature, extent and cause of Plaintiff’s claimed damages. Plaintiff argued she should be able to submit her vexatious claim to the jury, notwithstanding the open questions of fact because AMCO’s behavior was evidence of a “vexatious and recalcitrant attitude.”

The Court found that AMCO did not shut its file in response to the non-communication; frequently and consistently tried to effect settlement; did not deny the claim; paid the med pay quickly; actively investigated the claim; and made offers to settle. In fact, the court was particularly impressed with the diligent, proactive follow-up communications made by the claim’s handler.

Most importantly, the judge branded as “nonsensical” Plaintiff’s argument that AMCO did not voluntarily pay the amount of settlement offers after such offers were rejected by Plaintiff. Plaintiff offered no support for this argument other than asserting that “other insurers doing business in Missouri routinely issue such payments.” The Judge found that to accept such an argument would be in direct contradiction to Missouri’s public policy favoring settlement negotiations. The court also went on to find that just because there was a Medical Payments coverage payment, that did not prohibit AMCO from challenging at trial an issue as to whether there was UM coverage, holding that payment under one coverage does not prohibit a challenge as to coverage under another coverage contained in the policy.

The lesson to be learned is, do not get frustrated with claimant’s and their counsel’s stonewalling. Stay proactive and on top of each claim and avoid vexatious claims.