Insurer Punished For Fulfilling Terms of Contrac
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In Fiaze Issa v. Allstate Insurance, 2022 IL App (1st) 210343-U, No. 1-21-0343, Court of Appeals of Illinois, First District, Sixth Division (December 16, 2022) Mr. Issa sued his insurer for legal malpractice after defending its insured to a verdict, paid it in full, and refused Mr. Issa's request that it appeal the verdict.
The circuit court granted Allstate's motion to dismiss the complaint and Mr. Issa appealed.
BACKGROUND
Mr. Issa was an insured driver under Allstate's auto insurance policy when he rear-ended the vehicle of Alicia Contreras. Ms. Contreras sued Mr. Issa seeking compensation for property damage and personal injury. Allstate defended Mr. Issa and paid the judgment.
Mr. Issa sought $1981.88 in compensatory damages-the amount he claimed Allstate had overcharged him for insurance coverage following his accident.
ANALYSIS
In cases involving litigation, no legal malpractice exists unless the attorney's negligence resulted in the loss of an underlying cause of action. Although the duty to defend does not automatically encompass a duty to appeal an adverse judgment, such a duty can arise in the context of the duty of good faith and fair dealing where reasonable grounds are present for bringing an appeal.
There was no adverse judgment exceeding the policy limits & there was no breach of duty by Allstate.
Allstate fulfilled its duty to defend Mr. Issa in the Contreras case and indemnified him for the full amount of the judgment the jury rendered in Ms. Contreras's favor.
ZALMA OPINION
Proving that no good faith by an insurer goes unpunished Mr. Issa sued Allstate who did everything they promised to do by the policy - they defended Issa through a jury trial - and paid the verdict of the jury well within the policy limits. If Issa's premium increased it did so because he negligent rear-ended Ms. Contreras. He wasted the time of the court and his insurer costing them both a great deal of time and money to deal with his suit and appeal that he had no potential to succeed.
(c) 2022 Barry Zalma & ClaimSchool, Inc.
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Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 54 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com
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Insurer Who Pays Jury Verdict has no Duty to Appeal