This was the trial of a plaintiff/insured’s claim against his automobile insurer solely based on an allegation of bad faith. The issue was whether the insurer was liable to the insured for punitive, intangible, and aggravated damages where the insurer had paid out all coverages under the policy. The Court held that there was a breach of the duty of good faith, and regardless of whether the insurance claims were ultimately satisfied the plaintiff’s damages were compensable. The Court refused to award punitive damages, but awarded nominal damages for intangible and aggravated losses. The Court rejected the argument of the insurer, based on previous case law, that a plaintiff must have a successful action for some specific coverage under the policy before an action can succeed for bad faith.

22. November 2004 0

Baudisch v. Co-operators General Insurance Co., [2004] A.J. No. 1456, Alberta Provincial Court

The insured was in an accident in June 2002. Both vehicles were write-offs. The insured was charged under the Highway Traffic Act, as was the driver of the other vehicle. The insured remained convinced that the other driver was entirely at fault, and refused to accept any liability for the accident. The insurer assessed fault as lying wholly with its insured, and advised him that he would never be found to be zero percent at fault, so the percentage of fault attributed to him did not matter. The insurer refused to pursue the other driver’s insurer for the deductible, and rejected the insured’s appraisal of the value of his vehicle. Because of the attribution of fault, the insured’s insurance rating was affected. The insurer promised to provide him with the witness statements that indicated that he was at fault, but did not do so.

The traffic charge against the insured was ultimately withdrawn, while the other driver pleaded guilty and paid a fine. The insured sued the other driver to recover his entire collision claim from the other driver’s insurer, and was successful.

At the trial of the bad faith matter, the plaintiff/insured argued at trial that he was not dealt with in good faith, that the insurer should have been his advocate against the other driver and not his adversary, and that the inter-insurance company agreements with respect to fault were collusive. The Court held that the duty of good faith was breached by the insurer, but that the only losses to the Plaintiff were the costs, time, trouble, inconvenience and aggravation of having to pursue the liability himself, which he did with complete success without his insurer. Nominal damages were awarded.

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