Bad Faith in Arkansas Requires Proof of Dishonest, Malicious, or Oppressive Conduct Including Hatred, Ill Will, a Spirit of Revenge
Barry Zalma
Jul 14, 2023
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Owners Insurance Company moved for summary judgment as to a claim of bad faith. Separately, Owners argued the Court should make a finding that there no evidence to support a punitive damages instruction.
In RMS Warehouse 1315, LLC v. Owners Insurance Company, No. 5:22-CV-5114, United States District Court, W.D. Arkansas, Fayetteville Division (July 7, 2023) the USDC resolved the bad faith issue.
BAD FAITH
The tort of bad faith is established in Arkansas when an insurance company affirmatively engages in dishonest, malicious, or oppressive conduct in order to avoid a just obligation to its insured. The tort requires evidence of a state of mind characterized by hatred, ill will, or a spirit of revenge. Importantly, bad faith does not arise from a mere denial of a claim; there must be affirmative misconduct.
Plaintiff RMS contends its two claims of loss should have been covered under the policy of insurance it had with Owners. The first loss occurred on May 4, 2020, following a hailstorm that caused damage to RMS’s warehouse. The second loss was in February 2021, after a winter storm event. RMS narrows its bad-faith claim to Owners’s treatment of the winter-storm claim and explicitly states that Owners did not act in bad faith with respect to the hailstorm claim.
The only evidence RMS cited in support of its bad-faith claim is the denial letter sent by insurance adjuster Brian Doherty. RMS believes Mr. Doherty “misrepresented” in the letter what the insurance policy actually provided and omitted reference to crucial portions of the policy that provided coverage.
The standard for establishing a claim for bad faith is, and always should be, rigorous and difficult to satisfy. RMS betrayed a fundamental misunderstanding about the tort when, at one point in its briefing, it characterizes Owners’ actions as “[a]t best… a mistake,” Neither a mistake nor a “refusal to pay a disputed claim” is tortious behavior according to Arkansas law.
Summary judgment on Count II, the tort of bad faith, was therefore granted. As a consequence, RMS is not entitled to a punitive damages instruction.
The Motion was granted as to Count II, and the claim of bad faith was dismissed with prejudice; as a result, RMS will not be entitled to an instruction on punitive damages.
ZALMA OPINION
Acting as its own worst enemy the insured’s brief admitted that the insurer erred. A mistake may be sufficient to establish a breach of contract but is insufficient to prove the tort of bad faith and the right to seek punitive damages.
(c) 2023 Barry Zalma & ClaimSchool, Inc.
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Insurance Expert May Not Testify to Speculative and Contains Unsupported Conclusions.
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See the full video at and at https://rumble.com/v7fmifw-expert-may-only-testify-to-what-experience-supports.html
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The operative dispute concerned State Farm Auto’s motion to exclude or limit opinions from plaintiffs’ insurance-industry expert, Aaron Castillo. Castillo.
Law
The proponent of expert testimony must establish by a preponderance of the evidence that an expert is qualified and that the opinions are helpful, sufficiently grounded, and reliably derived and applied. Experience-based opinions must explain how the...
150 Months in Prison for Tax Fraud
Post 4846
Posted on September 17, 2026 by Barry Zalma
See the full video at https://lnkd.in/g8rh3JBX and https://lnkd.in/gmkdy-9C, In United States Of America v. Thomas Addaquay, Nos. 25-10609, 25-10611, United States Court of Appeals, Eleventh Circuit (September 9, 2026) the Eleventh Circuit affirmed all challenged convictions, the 150-month aggregate sentence, and the challenged $4,123,474.55 restitution award.
FACTS
In United States Of America v. Thomas Addaquay, United States Of America v. Thomas Addaquay, Nos. 25-10609, 25-10611, United States Court of Appeals, Eleventh Circuit (September 9, 2026) the Eleventh Circuit affirmed all challenged convictions, the 150-month aggregate sentence, and the challenged $4,123,474.55 restitution award.
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Thomas Addaquay controlled United Consolidated Accounting and Business Services (UC), nominally a check-cashing business.
The government proved a three-stage tax-refund scheme that converted the resulting refund checks into usable funds through ...
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Post 5489
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See the full video at https://lnkd.in/gvicAMDr and at https://lnkd.in/gvicAMDr
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Luis Manuel Garcia Salcedo, resulted in a $6 million settlement. Non-party Jose Hernandez allegedly worked as an assistant manager at Subin, operated Hernandez Associates, and owned litigation-funding companies that shared office space with Subin and provided services to its clients.
After Great American ...
Is Exhaustion Required to Seek Declaratory Relief From an Excess Insurer?
Post 4578
Posted on November 9, 2026 by Barry Zalma
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Exhaustion
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The Fox Parties alleged that insurers paid their rivals, withheld information,...
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Post 4576
Posted on November 5, 2026 by Barry Zalma
To Restore Voting Rights The Felon Must Pay Fines of $546.00
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To: [redacted] We received your request for an advisory opinion. You indicate that you have one or more felony convictions and request whether you are eligible to vote, including whether you have any outstanding legal financial obligations under section 98.0751, Florida Statutes, and, if so, a statement of the amount that must be paid to make you eligible to vote, and an explanation of how the amount was calculated.
The Division hereby responds to your request pursuant to its legal authority under section 106.23(2), Florida Statutes, and Florida ...
Administrative Review Permits the Agency to Apply its Expertise
Post 4574
In Erwin Jordan Castro Valdez v. Warden, Otay Mesa Detention Center, No. 26-cv-06147-BAS-JLB, United States District Court, S.D. California (October 30, 2026) Castro Valdez, a Cuban national paroled into the United States, was arrested on June 23, 2026, for alleged insurance fraud, grand theft, and making a false report to law enforcement. In his first habeas action, the district court ordered a bond hearing within fourteen days to determine whether the changed circumstances justified revoking his parole.
An Immigration Judge subsequently denied bond because of his pending state criminal case. Castro Valdez filed a second petition under 28 U.S.C. § 2241, challenging that determination and requesting immediate release without first appealing to the Board of Immigration Appeals (BIA).
LAW
According to the supplied text, § 2241 does not expressly require administrative exhaustion, but courts impose exhaustion as a prudential requirement. ...
