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CANCELLED POLICY PROVIDES NO COVERAGE

Thurston County Superior Court 04-2-01930-1

        GailAnn Stargardter continues her successful bad faith insurance defense practice in her first jury trial as a partner with Barrett & Worden, PS, by obtaining a unanimous verdict for the carrier from a Thurston County jury.

 Plaintiff Guzman was unfortunately involved in a one vehicle collision two weeks after canceling his collision and comprehensive coverage with his agent.  This fact did not dissuade him, however, from demanding coverage, filing a complaint with the Insurance Commissioner, and suing the carrier for breach of contract and bad faith after it denied property damage coverage.

 Plaintiff admitted that he had inquired with his agent about canceling comprehensive and collision coverage before the accident, but he maintained that he had never authorized his agent to remove the coverage.  Two investigations by the carrier found otherwise.

 Upon receiving Plaintiff’s claim, the carrier's claims department investigated, finding that prior to the accident (1) its agent’s records documented that Plaintiff had contacted his agent and requested that comprehensive and collision coverage be cancelled on a date certain; (2) on the specified date, the carrier canceled coverage; (3) the carrier’s billings reflected the cancellation, and the carrier refunded premiums to account for the premium reduction due to the canceled coverages; and (4) the carrier sent Plaintiff a new declaration page showing the coverages had been removed.  Upon receiving notice of the Insurance Commission complaint, the carrier conducted a second investigation, which reconfirmed that it had both cancelled the coverage at Mr. Guzman’s request and notified him of the change in coverage.

 Despite the factual situation appearing to be in the carrier’s favor for trial, Mr. Guzman was a particularly likeable young man.  His version of events, that he simply called to inquire about the possibility of removing coverage but did not authorize a change in coverage, coupled with his low key personality, raised concerns that despite the paper evidence, the jury could empathize with his plight and find against the carrier.  Gail undercut that possibility by pitting Mr. Guzman’s testimony against that of the equally young and very professional agent who handled his request to remove coverage.  The agent’s testimony, together with the documentation and testimony provided by the carrier’s underwriters and billing supervisors, was critical to the jury’s determination that the carrier had not only carried out Mr. Guzman’s instructions but that it had ample protections built into its operation to ensure that no mistakes were made.

 At the close of plaintiff’s case Gail successfully petitioned the court for a directed verdict, in the carrier’s favor, on the bad faith portion of Mr. Guzman’s claims.  Her argument was that plaintiff failed to submit any evidence to sustain his burden of proving bad faith as a matter of law.  The court agreed.  The jury rapidly returned a unanimous verdict for the carrier on Plaintiff’s remaining breach of contract claim. 

As Gail suspected, the jury really liked Plaintiff.  In fact, jurors commented that they tried to find a way to award him something, but that there was simply was no basis on which to do so. The jury complimented Gail on doing not only a great job for the carrier but for her professional courtesy and the respect she showed to Mr. Guzman during the trial.  In addition to vindicating the carrier’s claims handling, this trial result further demonstrates Gail’s specialized knowledge and skill in defending insurers against bad faith allegations.