Let’s talk bad faith insurer Prime Insurance Syndicate and Appraisal

A few weeks back I was contacted by a journalist inquiring if we knew anything about a small time non-admitted carrier based out of Utah, Prime Insurance Syndicate as they had plastered a press release all over the internet trumpeting a jury verdict down here in their favor as something unique and GASP they found the local jury to be very fair. The press release was so over the top we did some checking and after pulling the case up on PACER we decided it was not worth wasting time or space here on Slabbed covering. Insurers have won several verdicts here including some cases we profiled in Aiken and Bossier so we considered the source and moved on. Then in one of those famous serendipitous Slabbed moments I ran across an article in Claims Magazine which covered the verdict. As the blue collar retirees that were through my office yesterday giving me their tax information would say let tackle this for shits and giggles. We begin with last month’s press release:

Prime Insurance Syndicate, Inc. was successfully defended in a Hurricane Katrina lawsuit in the United States District Court for the Southern District of Mississippi. This is believed to be the first jury verdict in Mississippi exonerating an insurer in a Hurricane Katrina claim.

After six days of trial, the jury unanimously rendered a defense/zero verdict on January 19, 2010. The Plaintiffs’ complaint, filed in October 2007, alleged bad faith refusal to pay the insurance claim, willful and negligent breach of contract, breach of the duty of good faith and fair dealing and other claims, for which Plaintiffs claimed over $7 million in compensatory and punitive damages. The jury returned a defense/zero verdict, finding that Prime Insurance Syndicate, Inc. did not breach its contract with the Plaintiffs.

A challenging case in the post-Katrina environment, Prime had already paid everything that was owed under the policy and had come to an agreement with the Plaintiff’s own representative.

Prime withdrew from the INEX Insurance Exchange on December 31, 2009. Continue reading “Let’s talk bad faith insurer Prime Insurance Syndicate and Appraisal”

A Kuehn Appraisal Postscript: Hired Guns and Childrens Imagination Station v Prime Insurance Syndicate

Our posts on Kuehn v State Farm have created a good bit of buzz in certain insurance and legal circles as interested parties have flooded us with information on the appraisal clause, insurance cases involving appraisal and of course its misapplication in Dwyer which I profiled earlier today. Chip Merlin picked up our Kuehn coverage on his blog writing a couple of posts that copiously linked us. We’re grateful to be listed on Chip’s blogroll.

Unlike Chip I’ve never worked with Scot Spragins, the partner at Hickman, Goza & Spragins representing State Farm in Kuehn so I do not have that personal experience to add to my opinion of him. Like everyone else who hasn’t worked with Mr Spragins I only have the evidence submitted into the record of Kuehn to judge his professionalism by which I’ve concluded is very lacking. Simply put Mr Spragins and his firm are steppin’ out from literally hundreds of years of case law and insurance lore on both the appraisal clause and its application and he is smart enough to know it.

In my career as a CPA I’ve seen more than a few people refused legal services by ethical lawyers who recognized their prospective client’s legal position was contrary to established law. That is as it should be IMHO, practicing lawyers are the gatekeepers to our judicial system in respects and it keeps crap from clogging the court system. In looking at the Katrina insurance related litigation it has become clear there are certain lawyers, both plaintiff and insurance defense alike that will pump a dog legal position if the money is right. It is there that I still think Scot Spragins and his law firm resides.

Beyond the emails in the Kuehn evidentiary record we found there is a good bit of case law in this area. One such recent case was heard by Judge Louis Guirola little more than a year ago in the Children’s Imagination Station v Prime Insurance Syndicate that addressed these issues spot on. Like State Farm in Kuehn, Prime Synidcate was unhappy with the results of appraisal.  Unlike Kuehn and its blockbuster exhibition of bad faith by Team Spragins, Prime’s lawyers did not try to interfer with the process itself while the appraisal was ongoing. Prime simply tried to negate the results which was quickly bounced out of court house. I noted one final commonality with Kuehn in that appraiser Lewis O’Leary was involved, this time as umpire. Prime fought Children’s Imagination Station tooth and nail from ever getting the appraisal pursuant to the policy provisions, probably because they knew they lowballed the damage.  Here are some snippets from the granted motion for partial summary judgment against Prime: Continue reading “A Kuehn Appraisal Postscript: Hired Guns and Childrens Imagination Station v Prime Insurance Syndicate”