Opinion ID: 2634779
Heading Depth: 1
Heading Rank: 6

Heading: Evidence of the Underlying Motor Vehicle Accident

Text: [¶32] Given that her complaint against State Farm alleged bad faith, Ms. Cathcart contends the focus of the trial should have been the conduct of the insurance company and whether it fulfilled its duty to the insured. She asserts the district court erred in allowing evidence concerning the accident and her conduct in relation to it. She states: [O]nce [State Farm] determined that [she] was entitled to recover damages (as it did) and once the amount of damages [she] was entitled to recover (an amount in excess of the policy limit), the only remaining question was to determine if the conduct of [State Farm] conformed to the legal standard already established in Wyoming. Since [Ms. Cathcart] was entitled to recover damages in excess of the policy limit ($100,000.00) all that remained for the jury was to determine if the payment by [State Farm] to [her] of less than that amount ($75,000.00) met the duty of good faith and fair dealing. By permitting State Farm to present evidence of her conduct and the accident, Ms. Cathcart contends, the district court improperly allowed those matters to become the focus of the trial, rather than State Farm's conduct. [¶33] State Farm responds that the district court properly allowed evidence of the underlying accident to refute Ms. Cathcart's allegations of bad faith and unfair dealing. State Farm contends evidence of what it did to investigate, what it learned from the investigation and how that knowledge affected its evaluation of the claim was essential to refute Ms. Cathcart's claims that it acted unreasonably and that her claim was not fairly debatable. Without the ability to present that evidence, State Farm contends, it would have been unable to present a defense. [¶34] We address Ms. Cathcart's argument summarily. As State Farm asserts, without the opportunity to present evidence concerning the underlying accident  what happened, who did what, what the witnesses saw, and what the accident investigation people concluded  State Farm would have had no defense to the claim that a reasonable insurer under the facts and circumstances would have handled the claim differently. In order to show that it acted reasonably and in good faith and dealt with Ms. Cathcart fairly, State Farm had to be allowed to present evidence concerning its investigation of the accident, its evaluation of the claim, and its actions in dealing with Ms. Cathcart and her parents. Whether a claim is fairly debatable necessarily implicates the question whether the facts necessary to evaluate the claim are properly investigated and developed or recklessly ignored and disregarded. McCullough v. Golden Rule Ins. Co., 789 P.2d 855, 860 (Wyo. 1990). Moreover, [t]he logical premise of the debatable . . . standard is that if a realistic question of liability does exist, the insurance carrier is entitled to reasonably pursue that debate without exposure to a claim of violation of its duty of good faith and fair dealing. Gainsco Ins. Co. v. Amoco Production Co., 2002 WY 122, ¶ 33, 53 P.3d 1051, 1062 (Wyo. 2002) (citations omitted). In order to show that Ms. Cathcart's claim was fairly debatable, State Farm was entitled to show that a realistic question concerning liability existed. That showing required evidence of the circumstances surrounding the underlying accident. The district court did not abuse its discretion in allowing evidence of the accident.