In the last issue of Coverage Opinions I discussed the Louisiana Supreme Court’s recent decision in Kelly v. State Farm Fire & Casualty Co., No. 2014-CQ-1921 (May 5, 2015).

In general, the Louisiana high court held in Kelly that an insurer can be found liable for bad-faith failure-to-settle – even if the insurer never received a firm settlement offer. Insurers generally take comfort in having no risk of exposure for an excess verdict if a demand to settle within the insured’s limit of liability was never made. By taking this significant requirement away, did the Louisiana Supreme Court hand a playbook to policyholders and courts to change the bad faith landscape?

While Kelly v. State Farm is a Louisiana decision, I opined that it had the potential for implications farther and wider than the Pelican State. First, the decision was tied to Louisiana’s version of the National Association of Insurance Commissioner’s Unfair Claims Settlement Practices Act. And just about every state in the country has adopted some version of the NAIC’s Act. Second, it doesn’t seem a stretch that the Kelly court’s reasoning could be persuasive on other courts.

A coverage decision that changes a core principle of bad faith law, and with the potential for national implications, gets my vote as the most significant of the first half of 2015. And I suspect the entire year.

Such an important decision deserves further discussion. And there can be no one better way to accomplish that than to turn to a lawyer who is an expert in Louisiana coverage law and a member of a Mardi Gras krewe. To see what an experienced Louisiana coverage lawyer, who’s fought some alligators in his career, has to say about Kelly v. State Farm, check out this comprehensive analysis by Jeff Waltz, of The Waltz Law Group in New Orleans.

http://www.waltzlawgroup.com/wp-content/uploads/2015/05/Kelly-v-State-Farm-Memo-to-Insurers.pdf