Frank v. Safeco Insurance Company
Case type: Insurance Bad Faith
Award: $4.5 million judgment entered against Safeco; Safeco settles for $1 million
Attorneys: Lincoln Beauregard
In this case defendant Safeco Ins. Company denies defendant J.N. insurance coverage in bad faith, after plaintiff J.F. files a wrongful death lawsuit against defendant J.N.
18 month old plaintiff J.F. died under defendant J.N.’s care at her business, Julie’s Daycare. Defendant Safeco contended that there was no coverage for home care services related injuries under defendant J.N.’s homeowner’s insurance policy. Safeco refused to provide an attorney to defend her in the wrongful death lawsuit and also refused to legally assert that no coverage was available under the insurance policy in question by way of declaratory judgment. The original wrongful death complaint filed plaintiff J.F. was ambiguous regarding the care provided to J.F. therefore obligating Safeco to legally argue that no coverage existed in a declaratory judgment.
While under the care of Def. J.N., 18 month old Plff J.F. was strangled to death by blind cords hung next to her crib. When J.N. was informed that J.F. had filed suit against Julie’s Daycare she notified her homeowner’s insurance provider, Safeco Ins. Co., to inquire about coverage. Safeco Ins. Co. delayed responding for almost two months, and then sent J.N. a letter, requesting an interview to discuss the scope of her business hours.
More than one month after sending the letter requesting an interview, and only 7 days before J.N. was scheduled to appear at a hearing for a Motion of Default filed against her by Plff J.F., Safeco Ins. Co. attempted to interview her over the phone. J.N. declined to be telephonically interviewed, requesting that legal counsel be present during any interaction with Safeco. No interview ever took place, and J.N. received a lengthy letter on the day she was scheduled to appear for the Motion of Default. The letter was written in complicated insurance industry jargon, stating why that Safeco Ins. Co. was denying coverage.
According to Washington State Law, insurance companies have a duty to defend if the complaint filed by the plaintiff alleges facts that could possibly impose liability within the policy coverage of the policy holder. If the complaint is ambiguous it is to be “liberally construed in favor of triggering the insurer’s duty to defend.” The complaint filed against J.N. was ambiguous and provided the possibility of coverage. Additionally, the insurance company cannot rely on any evidence outside the filed complaint in order to deny coverage.