The insureds prevailed at trial in securing an award for bad faith due to the insurer's unreasonable handling of the claim. Taladay v. Metro. Group Prop. & Cas. Ins. Co., 2016 U.S. Dist. LEXIS 87659 (W.D. Wash. July 6, 2016).
Rosemarie Taladay had a homeowners policy with MetLife. After her death, one of her three sons, Gary Taladay, was living with her in the home when a fire occurred in an upstairs attic room. An investigation determined that most of the fire damage was in the attic bedroom, but water damage from the fire department's efforts to extinguish the fire was present on the first floor as well. The MetLife policy generally excluded water damage, but direct loss ensuing after water damage "caused by fire" was a covered cause of loss.
Gary Taladay had difficult discovering the identity of the insurer, MetLife. He signed two contracts for emergency services with Heritage Restoration after informing the company that he did not know the identity of the insurer and could not afford to pay for the mitigation work on his own. Heritage removed salvageable items form the house and attempted to assist in locating Ms. Taladay's fire insurance policy. Gary Taladay reported the fire to the mortgage company, Chase, but Chase refused to identify the insurance company.
Gary Taladay could not live in the house due to the fire damage and began living in an inexpensive motel. He was unable to afford both the motel bill and mortgage, so the mortgage was placed in default by Chase.
The policy was eventually located and MetLife was notified. MetLife investigated, but delayed making any payments until suit was filed. MetLife contended that it did not unreasonably deny coverage because the insureds failed to mitigate the loss to the first floor, failed to timely submit receipts for the additional living expenses, and failed to timely submit a properly completed Proof of Loss form with an inventory of unsalvageable personal property to enable Met Life to adjust the claim.
MetLife repeatedly misrepresented to the insureds that the adjustments of their entire claim, including structure damage and alternative living expenses, were contingent upon presentation of a complete inventory of damaged personal property. But at trial, numerous witnesses from MetLife testified that MetLife was able to adjust the structure portion of the claims and the alternative living expenses without the inventory of damaged personal property. MetLife compelled the insureds to file suit to recover for repair estimates was also contrary to Washington law.
MetLife also unreasonably modified the insureds' contractor's estimates of repair related to gutting the first floor of the house. This greatly reduced funds available for the insureds to make necessary repairs and made it impossible for the insureds to find a contractor willing to complete the work. Because the insureds could not make the repairs, Chase foreclosed on the house. MetLife not only wrongfully denied coverage for the repairs, but never communicated the denial to the insureds.
After suit was filed, MetLife paid a portion of the claim. The remaining issue, therefore, was whether MetLife's substantial delay in making the payment was reasonable. The MetLife adjuster created an inventory the second day he visited the property, listing approximately 140 items in the attic that were damaged by the fire. He withheld his inventory list from the insureds because they had not yet generated their own complete inventory of damaged items. The adjuster said he was waiting for a signed Proof of Loss form to be submitted by the insureds. A partially completed Proof of Loss form was submitted on September 3, 2014 by Gary's brother, Denny Taladay. In the section requesting estimates of "Actual Cash Value" of the property, Denny wrote "unknown." MetLife therefore refused to adjust the claim and refused to issue any payments until a completed inventory was received.
Only after suit was filed did MetLife finally pay $91,771 for additional loss under the claim.The court found this unreasonable. The adjuster had concealed his inventory of personal property items from the insureds even after the insures informed him that they needed a professional to assist with the inventory. MetLife failed to provide the insureds with reasonable assistance, contrary to Washington law. Consequently, MetLife breached the duty of good faith. The court awarded $254,770, plus attorneys' fees for actual and punitive damages.