Zalma on Insurance
Education • Business
Insurance Claims professional presents articles and videos on insurance, insurance Claims and insurance law for insurance Claims adjusters, insurance professionals and insurance lawyers who wish to improve their skills and knowledge. Presented by an internationally recognized expert and author.
Interested? Want to learn more about the community?
February 07, 2022
Buyer’s Remorse: Motion to Amend to Claim to Assert Bad Faith After Accepting Settlement Fails Acceptance of an Offer of Judgment Resolves Litigation

Read the full article at https://www.linkedin.com/pulse/acceptance-offer-judgment-resolves-litigation-barry-zalma-esq-cfe and at https://zalma.com/blog plus more than 4050 posts.

Posted on February 7, 2022 by Barry Zalma

Plaintiffs Eric Monzo and Dana Spring Monzo (hereinafter collectively “Plaintiffs”) sought damages against their homeowners’ insurance carrier, Defendant Nationwide Property & Casualty Insurance Company (hereinafter “Defendant”). In Eric Monzo And Dana Spring Monzo v. Nationwide Property & Casualty Insurance Co., C. A. No. K18C-11-003 NEP, Superior Court of Delaware (January 27, 2022) the Delaware court dealt with a claim of buyer’s remorse.
FACTS

The background facts of this action are set forth in Monzo v. Nationwide Prop. & Cas. Ins. Co. (hereinafter “Monzo II“). The relevant facts pertaining to the motions include that Plaintiffs filed a Complaint against Defendant relating to Plaintiffs’ homeowners’ policy. Count I of the Complaint sought a declaratory judgment that Defendant was required to cover certain losses pursuant to Plaintiffs’ policy. Count II of the Complaint stated a claim for bad faith breach of contract, which was dismissed pursuant to stipulation between the parties, as approved by the Court, to encourage settlement.

Defendant filed a motion for summary judgment on the remaining claims, which the Court granted in full on March 18, 2020. On March 11, 2021, the Delaware Supreme Court affirmed this Court’s decision in part, but reversed as to the Option R coverage provision in Plaintiffs’ policy.

Plaintiffs filed a motion to amend the Complaint seeking to add back the bad faith claim, with new allegations stemming from limited discovery. These included the assertion that Plaintiffs’ insurance agent, Mr. Papa, had opined that he “believed that coverage may be afforded to Plaintiffs to [sic] the loss suffered.”

Defendant, after some negotiation with the plaintiff, offered to allow judgment to be entered against it in the amount of Eight Thousand Dollars ($8,000.00), inclusive of fees and costs. Mr. Monzo responded on June 16, “We will accept the offer of judgment and instruct the Clerk to enter judgment against Nationwide in the amount of $8000. We will instruct Chambers to continue the hearing scheduled for tomorrow until the next motion calendar.” Thereafter Plaintiffs filed an acceptance of the Offer with the Court, with Plaintiffs’ direction to enter judgment, on June 22, 2021. The Offer was entered by the Clerk, and the amount was paid by Defendant and accepted by Plaintiffs, as indicated in Plaintiffs’ “Satisfaction of Judgment on Count I of the Complaint” filed with the Court on July 26, 2021.
DISCUSSION

The purpose of Superior Court Civil Rule 68 (hereinafter “Rule 68”) is to encourage settlement and avoid litigation. Rule 68 prompts both parties to balance and evaluate the risks and costs of litigation against the likelihood of success at trial on the merits.

Longstanding Delaware case law confirms that general principles of contract law apply to offers of judgment where the issue of attorney fees and costs is not present. The Court applies general contract principles, which permit extrinsic evidence to be considered to arrive at a proper interpretation of contractual terms.

In this case, Plaintiffs argue that the language of the Offer is ambiguous because it is unclear whether it includes within its scope the bad faith claims that were the subject of the pending Motion to Amend. While some of that evidence was presented to the Court in the form of the emails that the parties have made exhibits to their submissions, other evidence has not been placed before the Court, including a telephone conversation between Mr. Monzo and defense counsel that is referenced in those emails. However, the Court found the Motion to Amend was futile.

The Court’s decision on the Motion to Amend resolves the case, since the claims that Plaintiffs contend were not included in the Offer’s scope-the bad faith claims- cannot be brought back into the case, and thus the judgment that has been entered includes all of Plaintiff’s claims in this case.

Generally, a bad faith claim has been recognized in Delaware “when the insurer refuses to honor its obligations under the policy and clearly lacks reasonable justification for doing so.” Bad faith claims “can stem from an insurer’s failure to investigate, pay, process a claim, or in delaying payment.” However, “a mere delay in investigating a claim or paying benefits does not alone establish an insurer’s bad faith if there was a reasonable justification for the insurer’s failure to do so.”

Plaintiffs have not alleged in their proposed amended complaint that Defendant has a “general business practice” of claims denial; therefore, there is no need for analysis under that grouping of claims. Rather, Plaintiffs have alleged that Defendant’s action constituted bad faith in that Defendant “fail[ed] to make complete and timely payment of insurance proceeds . . . without reasonable justification” and “failed to . . . investigate and process” the claim.

The amended complaint’s allegations pertaining to Mr. Papa’s representations that the incident could be covered amount to nothing but statements of first impression from an agent who was neither responsible for interpretation of the contractual provisions of the policy nor familiar with the nuanced circumstances surrounding the damages to Plaintiffs’ property. More to the point, Mr. Papa represented to Plaintiffs that coverage “may be afforded”-not that it would be.
ZALMA OPINION

People who sue their insurance company think they are guaranteed a fortune in damages. When they don’t profit from the suit they get upset and litigate and appeal. This case is a perfect example: they accepted a settlement and then tried for more by attempting to amend their suit by seeking to reinstate a bad faith claim that the plaintiff had withdrawn in hopes of reaching a settlement. It worked, they got a settlement offer that they accepted and then tried to renege on the deal. The try failed.

© 2022 – Barry Zalma

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.

Subscribe to “Zalma on Insurance” at https://zalmaoninsurance.locals.com/subscribe and “Excellence in Claims Handling” at https://barryzalma.substack.com/welcome.

You can contact Mr. Zalma at https://www.zalma.com, https://www.claimschool.com, [email protected] and [email protected] . Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.

You may find interesting the podcast “Zalma On Insurance” at https://anchor.fm/barry-zalma; you can follow Mr. Zalma on Twitter at; you should see Barry Zalma’s videos on https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg/featured; or videos on https://rumble.com/zalma. Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims–library/ The last two issues of ZIFL are available at https://zalma.com/zalmas-insurance-fraud-letter-2/

Interested? Want to learn more about the community?
What else you may like…
Videos
Posts
14 hours ago
Ambiguity in Insurance Contract Resolved by Jury

Jury’s Findings Interpreting Insurance Contract Affirmed
Post 5105

See the full video at https://lnkd.in/gPa6Vpg8 and at https://lnkd.in/ghgiZNBN, and at https://zalma.com/blog plus more than 5100 posts.

Madelaine Chocolate Novelties, Inc. (“Madelaine Chocolate”) appealed the district court’s judgment following a jury verdict in favor of Great Northern Insurance Company (“Great Northern”) concerning storm-surge damage caused by “Superstorm Sandy” to Madelaine Chocolate’s production facilities.

In Madelaine Chocolate Novelties, Inc., d.b.a. The Madelaine Chocolate Company v. Great Northern Insurance Company, No. 23-212, United States Court of Appeals, Second Circuit (June 20, 2025) affirmed the trial court ruling in favor of the insurer.

BACKGROUND

Great Northern refused to pay the full claim amount and paid Madelaine Chocolate only about $4 million. In disclaiming coverage, Great Northern invoked the Policy’s flood-exclusion provision, which excludes, in relevant part, “loss or damage caused by ....

00:07:02
June 23, 2025
The Clear Language Of The Insurance Contract Controls

Failure to Name a Party as an Additional Insured Defeats Claim
Post 5104

Read the full article at https://lnkd.in/gbcTYSNa, see the full video at https://lnkd.in/ggmDyTnT and at https://lnkd.in/gZ-uZPh7, and at https://zalma.com/blog plus more than 5100 posts.

Contract Interpretation is Based on the Clear and Unambiguous Language of the Policy

In Associated Industries Insurance Company, Inc. v. Sentinel Insurance Company, Ltd., No. 23-CV-10400 (MMG), United States District Court, S.D. New York (June 16, 2025) an insurance coverage dispute arising from a personal injury action in New York State Supreme Court.

The underlying action, Eduardo Molina v. Venchi 2, LLC, et al., concerned injuries allegedly resulting from a construction accident at premises owned by Central Area Equities Associates LLC (CAEA) and leased by Venchi 2 LLC with the USDC required to determine who was entitled to a defense from which insurer.
KEY POINTS

Parties Involved:

CAEA is insured by Associated Industries Insurance Company, Inc. ...

00:08:22
June 20, 2025
Four Corners of Suit Allows Refusal to Defend

Exclusion Establishes that There is No Duty to Defend Off Site Injuries

Post 5103

Read the full article at https://lnkd.in/geje73Gh, see the full video at https://lnkd.in/gnQp4X-f and at https://lnkd.in/gPPrB47p, and at https://zalma.com/blog plus more than 5100 posts.

Attack by Vicious Dog Excluded

In Foremost Insurance Company, Grand Rapids, Michigan v. Michael B. Steele and Sarah Brown and Kevin Lee Price, Civil Action No. 3:24-CV-00684, United States District Court, M.D. Pennsylvania (June 16, 2025)

Foremost Insurance Company (“Foremost”) sued Michael B. Steele (“Steele”), Sarah Brown (“Brown”), and Kevin Lee Price (“Price”) (collectively, “Defendants”). Foremost sought declaratory relief in the form of a declaration that

1. it owes no insurance coverage to Steele and has no duty to defend or indemnify Steele in an underlying tort action and
2. defense counsel that Foremost has assigned to Steele in the underlying action may withdraw his appearance.

Presently before the Court are two ...

00:08:29
May 15, 2025
Zalma's Insurance Fraud Letter - May 15, 2025

ZIFL Volume 29, Issue 10
The Source for the Insurance Fraud Professional

See the full video at https://lnkd.in/gK_P4-BK and at https://lnkd.in/g2Q7BHBu, and at https://zalma.com/blog and at https://lnkd.in/gjyMWHff.

Zalma’s Insurance Fraud Letter (ZIFL) continues its 29th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma. It is provided FREE to anyone who visits the site at http://zalma.com/zalmas-insurance-fraud-letter-2/ You can read the full issue of the May 15, 2025 issue at http://zalma.com/blog/wp-content/uploads/2025/05/ZIFL-05-15-2025.pdf
This issue contains the following articles about insurance fraud:

Health Care Fraud Trial Results in Murder for Hire of Witness

To Avoid Conviction for Insurance Fraud Defendants Murder Witness

In United States of America v. Louis Age, Jr.; Stanton Guillory; Louis Age, III; Ronald Wilson, Jr., No. 22-30656, United States Court of Appeals, Fifth Circuit (April 25, 2025) the Fifth Circuit dealt with the ...

May 15, 2025
CGL Is Not a Medical Malpractice Policy

Professional Health Care Services Exclusion Effective

Post 5073

See the full video at https://lnkd.in/g-f6Tjm5 and at https://lnkd.in/gx3agRzi, and at https://zalma.com/blog plus more than 5050 posts.

This opinion is the recommendation of a Magistrate Judge to the District Court Judge and involves Travelers Casualty Insurance Company and its duty to defend the New Mexico Bone and Joint Institute (NMBJI) and its physicians in a medical negligence lawsuit brought by Tervon Dorsey.

In Travelers Casualty Insurance Company Of America v. New Mexico Bone And Joint Institute, P.C.; American Foundation Of Lower Extremity Surgery And Research, Inc., a New Mexico Corporation; Riley Rampton, DPM; Loren K. Spencer, DPM; Tervon Dorsey, individually; Kimberly Dorsey, individually; and Kate Ferlic as Guardian Ad Litem for K.D. and J.D., minors, No. 2:24-cv-0027 MV/DLM, United States District Court, D. New Mexico (May 8, 2025) the Magistrate Judge Recommended:

Insurance Coverage Dispute:

Travelers issued a Commercial General Liability ...

April 30, 2025
The Devil’s in The Details

A Heads I Win, Tails You Lose Story
Post 5062

Posted on April 30, 2025 by Barry Zalma

"This is a Fictionalized True Crime Story of Insurance Fraud that explains why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is designed to help everyone to Understand How Insurance Fraud in America is Costing Everyone who Buys Insurance Thousands of Dollars Every year and Why Insurance Fraud is Safer and More Profitable for the ­­­Perpetrators than any Other Crime."

Immigrant Criminals Attempt to Profit From Insurance Fraud

People who commit insurance fraud as a profession do so because it is easy. It requires no capital investment. The risk is low and the profits are high. The ease with which large amounts of money can be made from insurance fraud removes whatever moral hesitation might stop the perpetrator from committing the crime.

The temptation to do everything outside the law was the downfall of the brothers Karamazov. The brothers had escaped prison in the old Soviet Union by immigrating to the United...

post photo preview
See More
Available on mobile and TV devices
google store google store app store app store
google store google store app tv store app tv store amazon store amazon store roku store roku store
Powered by Locals