Insurance covers you when life’s unknowns take hold — protecting your life, your family and your property. However, there are times when insurance companies take advantage of their policyholders by denying claims, delaying processes or failing in other areas of investigation. This happened recently in a bad faith claim case with Kilroy’s Sports Bar and their commercial liability insurance company following a serious tent collapse accident.
The final portion of the two part case consisted of over four years of litigation where our bad faith attorneys came out victorious in this bad faith case for failure to settle. In today’s blog, we explain the details of the second portion of this case by focusing on the bad faith claim between the bar and its insurance company.
The Next Phase of the Kilroy’s Case
During the litigation for the collapsed tent, the plaintiffs offered the defendant’s insurance company a chance to settle the claim for $720,100, within the $1,000,000 policy limit. But Starr Indemnity & Liability, the insurance company, chose not to settle, resulting in a civil trial and a jury verdict to decide the outcome. As a result, Kilroy’s Sports Bar was faced with a judgment ($5,200,000 less $1,800,000 from previous settlements for a net judgment of $3,400,000) that exceeded its insurance policy limits ($1,000,000) — leaving the bar responsible for the excess amount ($3,400,000).
When there is a judgment for more than the policy limits, the defendant may have its assets seized or a levy on its property to satisfy the judgment. Following this excess judgment, the bar had a potential bad faith claim for bad faith failure to settle against its insurance company, but it would have to prove that the insurance company placed its own financial interests ahead of the bar owners’ financial interests.
Faced with an execution or levy against their personal assets for the excess judgment amounts, Kilroy’s agreed to assign its potential bad faith claim against Starr Indemnity, to the underlying injured plaintiffs, in return for an agreement to not execute upon any of Kilroy’s personal assets. With the assignment executed and fully enforceable, our team began to pursue the bar’s case against its insurance company for bad faith failure to settle.
Pursuing a Bad Faith Claim
Following the collapsed tent case, our bad faith attorneys then pursued the bar’s case against its insurance company for their bad faith by failing to settle. In this new case, we were alleging that the insurance company placed its own financial interests above those of its insured, the bar.
After the case against the bar’s insurance company was filed in the City of Saint Louis, the defendant insurance company attempted to remove the case to federal court. This can often be a more favorable place for a defendant’s case for a variety of reasons including, stricter expert rules and the requirement for a unanimous jury verdict. Importantly, removing the case to federal court would remove the lawsuit out of a more favorable venue, the city of Saint Louis.
The venue is extremely important in any case. The location of the case and ultimate trial can have a big impact on the value of the case because of the makeup of the jury. For that reason, a case filed in one venue may be worth more or less than if it were filed in another.
Moving the Case Forward
In March of 2019, in response to Starr’s attempt to move the case to federal court, the US District Court for the Eastern District of Missouri remanded the case back to the City of Saint Louis. After this action, the failure to settle bad faith case was heavily litigated over the next four years. We traveled as far away as New York City to take depositions of the insurance company employees.
As in the underlying case, the defendant insurance company was aggressive in the defense of its own money. This resulted in numerous attempts to fight court rulings in the case by attempting to have the Court of Appeals overrule various decisions of the City court.
The Impact of Additional Legal Counsel
During the course of the lawsuit against the insurance company, it appeared that the insurance company had another attorney involved in the defense of the bar in the first case. When we attempted to get the file from that attorney, the defendant insurance company argued that our bad faith attorneys could not do so because the documents were protected by the attorney-client privilege — claiming that the insurance company was “the client” in the first case.
Our position was that the attorney was actually doing the bulk of its work for the benefit of the insured bar owners, and the insured bar owners were the actual client. Any privilege would belong to Kilroy’s, not Starr Indemnity. Starr filed a motion to quash our subpoena directed toward the other lawyer, and the St. Louis City Circuit Court heard the arguments and ordered the subpoena to be quashed. Our legal team then filed a writ petition to have the issue heard by the Missouri Court of Appeals. The issues were briefed and argued before the appeals court.
As a result, the Court of Appeals agreed with us and issued an important opinion for attorney-client privilege issues that arise in bad faith cases. This case, State Ex. Rel Kilroy Was Here, LC v. Moriarty, will be heavily relied upon when future plaintiffs are attempting to recover against an insurance company for failing to properly protect their interests.
The Final Result
Through aggressive representation, our bad faith attorneys were able to show how the insurance company failed to properly consider the financial interests of its own insured. Examples include the lack of a proper claim file, failure to pay experts in a timely manner, failing to pay defense attorneys in a timely manner and failing to recognize the significance of the negligence per se claim in the first trial by not conducting a proper investigation.
In April 2023, 11 years to the date after the tent incident, Starr insurance company agreed to pay $3 million to settle the bad faith case. Starr had already paid the $1,000,000 policy limits, plus approximately $500,000 in interest after its appeal of the final verdict was denied. After extensive litigation, trial practice and appellate work, the case finally came to an end for the injured parties. As a result, the injured parties were able to receive additional money for their injuries out of the recovery from the insurance company.
At the end of the day, Starr Indemnity & Liability Company paid out over $4,500,000 to settle a case that they could have settled 8 years earlier for $720,100.
Experienced Bad Faith Attorneys in St. Louis
Battling against insurance companies when they violate the faith you place in them is a difficult process when you have a business to run. Our bad faith attorneys have extensive legal experience in navigating bad faith claims against businesses big and small after a serious accident occurred on your premises.
If you believe your insurance company treated you unfairly, contact our bad faith attorneys for a free consultation to plan your next steps. Additionally, if you missed our recent blog about the first part of this momentous MHM victory, visit our blog to read about the Kilroy’s Bar personal injury case.