On July 19 Baker Sterchi and out-of-state co-counsel obtained summary judgment in a case pending in the Circuit Court of Johnson County, Missouri alleging bad faith failure to settle against their insurance carrier client.
According to the court’s order, the original plaintiff’s policy limits settlement demand did not constitute a reasonable opportunity to settle the case because it was conditioned on the insured’s acceptance of a 537.065 agreement. The court further concluded that the post-judgment agreement between the original plaintiff and the insured protected the insured from execution of the underlying judgment, such that the agreement could not constitute evidence of damages sustained by the insured. The court was also persuaded by the insurance carrier’s “timely and repeated [offers] to pay policy limits to effectuate a settlement of the underlying claims.”
If affirmed by the court of appeals, this case could serve to defuse a tactic frequently deployed to set up bad faith claims against liability carriers.