Earlier this month, an appellate court in Kentucky issued an interesting opinion that is of interest to anyone dealing with a difficult insurance company after a Maryland car accident. In the case, Holloway v. Direct General Insurance Company, the court determined that the plaintiff’s bad-faith claim against the insurance company, based on the company’s failure to settle her claim, must fail because the insurance company had a legitimate reason to doubt its own liability.
Holloway, the plaintiff, was involved in an auto accident with Sykes. The accident took place in a parking lot and involved low speeds. However, each party had a different account of how the accident occurred. Holloway claimed that she suffered property damage and injuries as a result of the collision, and she sought compensation from Sykes’ insurance company, the defendant.
Holloway made property damage claims as well as personal injury claims. The parties reached a settlement regarding the property damage claims, but settlement negotiations broke down regarding the personal injury claims. Since the insurance company would not settle her personal injury claims, Holloway filed a personal injury lawsuit against the insurance company. One of the claims she made was that the insurance company acted in bad faith when it refused to settle her personal injury claim. If successful, Holloway could potentially receive compensation above and beyond her actual damages through punitive damages.