INSURED DID NOT FAIL TO COOPERATE

Commercial General Liability	Bad Faith
Failure to Cooperate

Sidney and Bonnie Bradley's home was severely damaged after water entered their house during a rainstorm. In a lawsuit, the Bradleys alleged that Jamie Marin's (Marin) roofing business was negligent in not putting a temporary cover over the roofing project he was performing for them in order to protect the house from the elements.

Marin notified West Bend Mutual Insurance Company (West Bend), his Commercial General Liability policy carrier. A West Bend adjuster inspected the damage. That adjuster met with Bradleys' Homeowner insurer and companies agreed to let the homeowners insurer handle the claim. That insurer would then subrogate their payment from West Bend.

Approximately a year and a half after receiving notice of the Bradley's suit, West Bend filed for a declaratory judgment. The insurer denied its obligation to defend Marin and refused to respond to the Bradley suit. West Bend claimed that Marin had failed to cooperate with it and had therefore prejudiced its position. Marin did not respond to the petition and a lower court entered a default judgment in favor of the Bradley's original negligence suit. West Bend refused to pay that judgment. The insurer also failed to pay an award of nearly $180,000 granted by a district court in favor of the Bradleys.

The Bradleys sued West Bend for Breach of Contract and for dealing in bad faith (as well as fraudulent misrepresentation). West Bend appealed after the same district court agreed with the Bradleys' allegations and awarded punitive damages of $100,000 in addition to the$180,000).

Iowa's Court of Appeals reviewed the actions noting that West Bend initially had no problem in contacting Marin. The court noted the fact that Marin had fully cooperated in the beginning. The records then showed that West Bend made no additional attempts to contact Marin for months following the original claim.

The higher court ruled that the evidence support the Bradley's claim that West Bend had dealt in bad faith and had deliberately misrepresented their position. The court also held that nothing in West Bend’s testimony supported the claim of lack of cooperation because it was the insurer who failed to make reasonable attempts to contact Marin. Finally, the court held that because Marin had admitted to negligently performing his work, West Bend's rights were not prejudiced.

The high court ruled that the district court's award against West Bend could stand.

Sidney T. Bradley and Bonnie S. Bradley, Plaintiffs-Appellees v. West Bend Mutual Insurance Company, Defendant-Appellant. Iowa Court of Appeals, No. 3-735/02-1938. Filed December 10, 2003. Affirmed CCH Personal and Commercial Liability Cases Paragraph 8007.