When Claims are Fairly Debatable There is No Bad Faith
Post 4986
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Homeowners appealed from the district court’s denial of their breach-of-contract, consequential-damages, and bad-faith claims in Donnie Paul Bradley and Melanie Yvonne Bradley v. Allstate Insurance Company, No. 23-1397, Court of Appeals of Iowa on January 23, 2025 resolved the disputes.
BACKGROUND:
Donnie and Melanie Bradley appealed from the district court’s summary judgment ruling and final judgment following contractual disputes against Allstate Insurance Company. The Bradleys alleged errors in the district court’s interpretation of the insurance policy for their breach-of-contract claim and the granting of summary judgment to Allstate on their consequential damages and bad-faith claims. The dispute arose as a result of:
1. The Bradleys purchased an Allstate insurance policy in 2014 for their Cedar Rapids home.
2. The policy included actual cash value (ACV) and replacement cost value (RCV) coverage.
3. The August 2020 Derecho windstorm caused significant damage to their home.
4. The Bradleys reported the damage, and Allstate acknowledged the losses were covered under the policy.
5. The Bradleys, unhappy with Allstate, demanded appraisal in November 2020.
6. The parties signed an appraisal for the ACV in September 2021, and Allstate paid the Bradleys in accordance with the insurance policy.
7. The Bradleys claimed breach of contract for Allstate denying RCV coverage, alleged bad faith, and demanded consequential and punitive damages.
8. The Bradleys spent more on repairs than Allstate paid out and they continued with litigation.
9. The Bradleys ultimately paid for the repairs by refinancing their home to establish a home equity line of credit and taking out a loan against a retirement account.
10. Allstate was to reimburse the Bradleys for repair costs in excess of ACV-the equivalent of the RCV-if repairs were completed within 180 days of the ACV payment.
CLAIMS AND PROCEEDINGS:
The district court granted summary judgment to Allstate on the consequential damages and bad-faith claims but denied it for the breach-of-contract claim.
The Bradleys withdrew their request for a jury trial, and Allstate eventually paid the RCV from the appraisal.
APPEAL:
The Court of Appeals upheld the district court’s decision that consequential damages were not available under Iowa law.
The Court of Appeals agreed with the district court that the bad-faith claim was fairly debatable and that the Bradleys did not set forth a valid bad-faith claim.
DISPOSITION:
The question of whether the Bradleys were entitled to RCV payments was found to be fairly debatable as a matter of law. The Court concluded that the undisputed facts establish that there was no unreasonable delay in the ACV payment. Allstate reasonably disputed coverage as to the RCV payments on the basis that the explicit terms of the policy require repair to be completed for an RCV payment to be made.
The claim was, in the opinion of the Court of Appeals, fairly debatable because replacement was not completed within 180 days of the ACV payment. The Court of Apeals concluded that the Bradleys could not succeed on their bad faith claim.
ZALMA OPINION
The Iowa Court of Appeals educated the Bradleys and their counsel holding that an insurance policy is a contract with conditions. The Allstate policy provided, as a condition, that to receive the difference between ACV payment and the RCV the repairs must be completed within 180 days of the ACV payment. Although there was a dispute over when the repairs were completed Allstate paid both the ACV and the RCV making the entire claim moot and the other claimed damages were fairly debatable and no evidence to support a bad faith claim.
(c) 2025 Barry Zalma & ClaimSchool, Inc.
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Policy Limits Demand Accepted Settles Claim
Post 5434
Posted on August 26, 2026 by Barry Zalma
See the full video at https://lnkd.in/g-ZtsSgK and at https://lnkd.in/ghMBdYWR
A Contingent Offer Accepted Ends the Dispute
In Farmers Insurance Exchange, a California Reciprocal Insurance Exchange, The Superior Court For The County Of San Bernardino, Kathleen Ann Wood, E087128, California Court of Appeals, (July 9, 2026) Farmers Insurance Exchange insured Doyle Archer under an automobile policy with bodily injury limits of $15,000 per person and $30,000 per accident.
FACTUAL BACKGROUND
Archer rear-ended Kathleen Ann Wood at a red light, causing Wood to assert a bodily injury claim against him. Wood’s counsel sent Farmers a pre-litigation settlement demand offering to resolve Wood’s claim for the available policy limits, stating that if the $100,000 demand exceeded the policy, the offer was for the policy limits.
Farmers timely responded in writing, agreed to pay Wood the $15,000 per-person policy limit, and provided the requested ...
Policy Limits Demand Accepted Settles Claim
Post 5434
Posted on August 26, 2026 by Barry Zalma
See the full video at https://lnkd.in/g-ZtsSgK and at https://lnkd.in/ghMBdYWR
A Contingent Offer Accepted Ends the Dispute
In Farmers Insurance Exchange, a California Reciprocal Insurance Exchange, The Superior Court For The County Of San Bernardino, Kathleen Ann Wood, E087128, California Court of Appeals, (July 9, 2026) Farmers Insurance Exchange insured Doyle Archer under an automobile policy with bodily injury limits of $15,000 per person and $30,000 per accident.
FACTUAL BACKGROUND
Archer rear-ended Kathleen Ann Wood at a red light, causing Wood to assert a bodily injury claim against him. Wood’s counsel sent Farmers a pre-litigation settlement demand offering to resolve Wood’s claim for the available policy limits, stating that if the $100,000 demand exceeded the policy, the offer was for the policy limits.
Farmers timely responded in writing, agreed to pay Wood the $15,000 per-person policy limit, and provided the requested ...
The Largest Residential Burglary of All Time
Post 5407
Fraud & the Fear of Bad Faith Suits
Posted on July 22, 2026 by Barry Zalma
See the full video at https://lnkd.in/gWQQEySW and at https://lnkd.in/gyhdK6wv
This is a Fictionalized True Crime Story of Insurance Fraud explaining why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is one of a collection designed to help 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.
This is a Fictionalized True Crime Story of Insurance Fraud explaining why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is one of a collection designed to help 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.
After ...
Referral of Claims to its SIU Is Not Bad Faith
Post 5487
Posted on September 10, 2026 by Barry Zalma
In WIZ Collision, LLC, on behalf of itself and as assignee of Jawara Small, Chester Street LLC, and Aziz Brooks v. GEICO Corporation, No. 25-cv-4201 (KAM)(JAM), United States District Court, E.D. New York (August 28, 2026) Wiz Collision, a New York City auto-body shop, regularly repaired vehicles and submitted insurance claims for customers. It alleged that GEICO repeatedly approved claims and repairs, then referred certain claims to its Special Investigations Unit, stopped issuing payments, and delayed resolution despite ultimately finding no fraud.
Wiz Collision sued on its own behalf and as purported assignee of three customers, asserting contract, good-faith, consumer-protection, and injunctive claims. GEICO removed the case and moved to dismiss under Rule 12(b)(6).
LAW
Under Rule 12(b)(6), a complaint must plead facts supporting a facially plausible claim. Article III standing requires a concrete injury, ...
Crime Requires 121-151 Months of Imprisonment
Post 5486
Posted on September 9, 2026 by Barry Zalma
Mr. Baiyewu Is Liable For The Loss Resulting From Acts Directly Attributable To Him And For The Loss Resulting From The Reasonably Foreseeable Acts Of Others Taken In Furtherance of the Criminal Activity
In United States Of America v. Oluwasegun Baiyewu, CRIMINAL No. 21-395 (RAM), United States District Court, D. Puerto Rico (August 26, 2026) the court dealt with a case after on October 20, 2021, a grand jury in the District of Puerto Rico returned a single-count Indictment charging Mr. Baiyewu with conspiracy to commit money laundering, in violation of 18 U.S.C. § 1956(h). About a year and a half later, on March 31, 2023, a grand jury returned a single-count Superseding Indictment charging Mr. Baiyewu and four co-defendants with conspiracy to commit money laundering, in violation of 18 U.S.C.
CONVICTION
Baiyewu was convicted by a jury of conspiracy to commit money laundering under 18 U.S.C. § 1956(h). The charged conspiracy, ...
Crime Requires 121-151 Months of Imprisonment
Post 5486
Posted on September 9, 2026 by Barry Zalma
Mr. Baiyewu Is Liable For The Loss Resulting From Acts Directly Attributable To Him And For The Loss Resulting From The Reasonably Foreseeable Acts Of Others Taken In Furtherance of the Criminal Activity
In United States Of America v. Oluwasegun Baiyewu, CRIMINAL No. 21-395 (RAM), United States District Court, D. Puerto Rico (August 26, 2026) the court dealt with a case after on October 20, 2021, a grand jury in the District of Puerto Rico returned a single-count Indictment charging Mr. Baiyewu with conspiracy to commit money laundering, in violation of 18 U.S.C. § 1956(h). About a year and a half later, on March 31, 2023, a grand jury returned a single-count Superseding Indictment charging Mr. Baiyewu and four co-defendants with conspiracy to commit money laundering, in violation of 18 U.S.C.
CONVICTION
Baiyewu was convicted by a jury of conspiracy to commit money laundering under 18 U.S.C. § 1956(h). The charged conspiracy, ...
