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Bad Faith Litigation: KY Supreme Court Sheds New Light on “Fairly Debatable” Standard

Written by AMLO.

The Advocate by M. Austin Mehr  May/June 2001  Vol. 28, No. 3

At trial, the Johnsons presented a detailed argument explaining, amongst other things, that only one out of 100 insureds would have had the motivation and financial strength to litigate a disputed insurance claim rather than settling the claim and that any punitive damage award of less than $4,455,000.00, made it is statistically more profitable for Farmland to deal with other insureds in the same manner they dealt with the Johnsons rather than in a fair manner. 1 Lee Steers, a KATA board member represented the policyholder. 2 Empire Fire and Marine is frequently cited by defendants in support of a motion to dismiss, claiming that if a particular claim is “fairly debatable,” the insured is entitled to debate the claim regardless of whether the debate concerns a matter of fact or word of law. 3 It appears that lawyers may still be expert witnesses, see Motorist Mutual v. Glass . However, the testimony must match the expertise. Breen had no experience in adjusting fire claims, although he had considerable knowledge of the law of insurance bad faith.