September 27, 2016
In an opinion issued last week, the Kentucky Supreme Court again addressed insurance bad faith, affirming the trial court's grant of summary judgment to the insurer Direct General. Hollaway v. Direct General Ins. Co. of Miss., Inc., 2014-SC-758. The case arose from a low-speed auto accident that occurred in a parking lot. The parties disputed the events leading up to the collision. The bad faith plaintiff, Hollaway, presented some evidence that Direct General originally admitted that its insured caused the accident, although there was also evidence that Direct General changed position after learning more about the facts. The Supreme Court concluded that summary judgment was appropriate primarily because there was a legitimate dispute as to the cause of Hollaway's injuries, particularly whether the injuries were preexisting or were caused by the accident. The Supreme Court also concluded that Hollaway failed to present evidence of intentional misconduct by Direct General. Thus, the Supreme Court's opinion is fact-specific. It does not appear to alter the general landscape for bad faith claims in Kentucky.