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Insurance Bad Faith
Bachus & Schanker, LLC Client Compensated $3.5 Million By State Farm in Insurance Dispute
Bachus & Schanker, LLC client Kelly's home burned to the ground. Kelly, a 71-year-old quadriplegic, had previously used her life savings to build a home equipped with numerous custom modifications to allow her to function independently in her home. She had heated floors to make sure her lower body stayed warm; special buttons to open and close windows and blinds; a specially designed kitchen, bathroom, and bedroom; and many other items. She even had a wheelchair-accessible deck built around the entire outside of her home so she could spend time outside. These small luxuries were important because Kelly's severe physical limitations prevented her from leaving her home but for a few times each year.
Prior to the February 2001 fire that destroyed her home, Kelly called her State Farm agent to come and appraise her home to make sure she was fully insured in case something awful happened. Her agent came to the home and afterwards assured Kelly that she was "adequately insured." Unfortunately, Kelly's insurance agent did not account for all of the custom features in Kelly's home, and when the "awful" happened and her home was completely destroyed by a fire, State Farm told Kelly that she did not have enough insurance to replace her home or its contents. In fact, Kelly was essentially insured for only about half of the amount it was going to cost to replace her home and its contents. When Kelly told State Farm that was impossible because her State Farm agent had been up to the home less than six months before the fire and confirmed she had enough insurance, State Farm wanted to know if Kelly had any documentation to prove what she was saying. When Kelly said she had no documentation, State Farm told Kelly that the agent denied being up at her house before the fire. State Farm also told Kelly that State Farm's own investigation revealed that Kelly intentionally chose to underinsure her home and that Kelly would need to come up with the other half of the money if she wanted to rebuild because State Farm was not going to pay for it. It was later learned that State Farm took this position despite the fact that the type of policy issued to Kelly was only available to those who agreed to fully insure their homes.
Kelly was referred to Attorney J. Kyle Bachus, a partner at Bachus & Schanker, LLC by another lawyer. The case was investigated and after giving State Farm one final opportunity to pay Kelly what she clearly was owed under the policy, Bachus & Schanker, LLC filed a lawsuit. Mr. Bachus sued State Farm for Bad Faith Breach of Insurance Contract and for violating the Colorado Consumer Protection Act along with other claims. In addition the State Farm agent was sued for negligence and his Bad Faith conduct.
During the course of the lawsuit, Kelly's version of the events was proven true. State Farm's own internal documents showed that at the very time State Farm was telling KW that the agent denied going to her house, State Farm had learned from the agent himself that he had been there. When the agent was confronted with State Farm's own internal documents at his deposition, the agent admitted that yes, he had been to Kelly's home before the fire and yes he had called Kelly back afterwards to tell her she was adequately insured. State Farm's assertion that the agent denied going to Kelly's home before the fire was absolutely untrue. In fact, the agent testified that he specifically told State Farm that he had failed to take into account Kelly's special-needs items when he evaluated the house. Bachus & Schanker, LLC also took the deposition of the attorney appointed by State Farm as an "appraiser". During his deposition, the attorney admitted an ongoing financial relationship with State Farm and admitted that he had no experience as a property appraiser. The attorney also admitted that he specifically told State Farm when he was contacted about serving as an appraiser that he could not serve if doing so required the attorney to be impartial or disinterested. But State Farm decided to appoint him as an appraiser anyway.
After a long and fierce battle, Kyle Bachus, and the team of experienced attorneys at Bachus & Schanker, LLC were able to help Kelly resolve this dispute with State Farm, and State Farm eventually paid Kelly $3.75 million for her claim.
