Articles Posted in James Jay Sadd

Attorneys Rich Dolder and Jay Sadd literally wrote the book on insurance bad faith claims in Georgia.  This post is to highlight the presentation entitled, “Anatomy of An Insurance Bad Faith Trial” that was given by Rich Dolder at the Punitive Damages iCLE Seminar held at the State Bar Of Georgia.

This seminar was held earlier today, and Rich Dolder represented Slappey and Sadd, while he spoke to the audience regarding insurance bad faith.

Insurance Bad Faith claims are some of the most complex cases to litigate; however, the team at Slappey & Sadd are exceptionally well versed in handling these types of cases, while also possessing the courage to face the insurance companies head on.

An insurance agent’s bad faith may be imputed to the insurance company and thus become the company’s bad faith.  However, under Georgia law, the potential liability of an insurance broker or agent (separate from the potential liability of the insurer itself) is limited to the terms of the insurance policy it negligently failed to procure. An agent who negligently fails to procure the requested coverage is liable for loss or damage to the limit of the agreed policy.

J. Smith Lanier & Company v. Southeastern Forge, Inc.

In J. Smith Lanier & Company v. Southeastern Forge, Inc., the Georgia Supreme Court clarified that an agent or broker who negligently fails to procure a policy is not necessarily subject to the same law as an insurer who refuses to pay a claim in bad faith.  Southeastern Forge was a client of the independent insurance broker J. Smith Lanier (“Lanier”).  In 1998, Lanier prepared Southeastern’s application for primary and excess general liability coverage, but negligently failed to list an event on the application when it was submitted to the excess insurer.  After an agricultural blade manufactured by Southeastern Forge malfunctioned and injured a worker in Texas, the excess insurer sought a declaratory judgment that the policy was void ab initio for the failure to list the event on the application.  Southeastern Forge then filed suit against Lanier, asserting negligence, breach of fiduciary duty, and breach of contract to recover the funds expended in the Texas suit.  The trial court held that Southeastern Forge could not obtain more than the $2 million policy limits.  The Georgia Supreme Court agreed, noting that under the facts of that case the law did not impose “the unique statutory duties of insurers on independent brokers who do not issue contracts of insurance and have no duty or ability to evaluate and compromise claims.”

The Time-Limited Holt Demand

The most common failure to settle within policy limits involves the insurer’s rejection of a time-limited offer. A notable 1992 decision provides the moniker for the so-called “Holt demand,” in which an attorney for a claimant sends a letter to the insurer demanding a settlement at or below policy limits and threatening the specter of a judgment in excess of policy limits if the demand is not accepted within a specified time period. In Holt, the Supreme Court of Georgia addressed whether a demand letter providing the insurer 10 days to make a decision was sufficient.  It is within these scenarios where it becomes important to have a strong working knowledge of the time-limited holt demand.

Two Ways Where The Supreme Court Limited Its Holdings

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