Bad Faith Charges Awarded Against Safe Auto after Failing to Appear at Arbitration
In the case of Mangan v. Safe Auto Insurance Company, the policy owner brought claims for breach of contract and bad faith after Safe Auto refused to pay a claim arising from a traffic accident that the insured’s vehicle was involved in. The policy owner asserted that he was not required to cover the damage to the vehicle under the terms of the policy.
An arbitration hearing was scheduled on the day the complaint was filed, which neither defense counsel nor a representative for Safe Auto Insurance Company attended. The Arbitration Panel held an ex parte trial, during which it only heard testimony from the policy owner and his counsel. The Panel entered a verdict against Safe Auto for $35,000 ($24,000 being in bad faith damages).
Safe Auto filed a motion for post-trial-relief asserting the verdict should be vacated and the case should be scheduled for a new arbitration hearing. Safe Auto claimed there was no evidence produced that showed their failure to appear was intentional and they were not notified in an adequate amount of time. Safe Auto additionally claimed the trail failed to “consider any lesser sanctions than imposing an ex parte verdict” and to “limit the non-jury award to $25,000” in violation of a local rule. The motion was denied and Safe Auto appealed. In affirming the judgment, the Superior Court reasoned that the trial court thoroughly addressed the insurer’s claims, and determined that the court properly denied the insurer’s request that the verdict be vacated, “as defense counsel did not offer a satisfactory excuse for his failure to appear.”