Louisiana – Bad Faith Update: Kelly vs. State Farm
Michael Lonegrass and Scott Raney of the firm’s New Orleans office prepared the update below regarding the Louisiana Supreme Court’s decision in Kelly vs. State Farm. The decision concerns the court’s interpretation of portions of the Louisiana Bad Faith Statutes. Namely, the court found that: 1) the insurer can be liable for bad faith failure to settle even when they do not receive a formal demand from opposing counsel; and 2) the insurer can be held liable for bad faith misrepresentation of facts even if those facts do not relate to insurance policy/coverage issues. The attached provides a case brief of the decision, a discussion of the law pre and post Kelly, the likely impact of the court’s interpretation, and case handling tips in light of the decision.