Court Opinion

ID: 7713191
Source: CourtListenerOpinion
Date Created: 2022-07-30 19:15:04.216271+00
Date Added: 2024-06-11T13:39:41.688858
License: Public Domain

I must respectfully dissent from this Court's summary affirmance of a judgment against State Farm Fire and Casualty Company on Sandra Crumpton and Robert Crumpton's claim of bad faith failure to pay a claim on a fire insurance policy. To recover from State Farm for bad faith refusal to pay a claim, the Crumptons had to show: (1) an insurance contract between them and State Farm and a breach thereof by State Farm; (2) an intentional refusal to pay their claim; (3) the absence of anyreasonably legitimate or arguable reason for that refusal; and (4) State Farm's actual knowledge of the absence of any legitimate or arguable reason. National Security Fire Cas.Co. v. Bowen, 417 So.2d 179 (Ala. 1982). The evidence showed that State Farm had a reasonably legitimate or arguable reason for denying the Crumptons' claim. State Farm's investigations pointed to arson as the cause of the fire that destroyed the Crumptons' home. The burn patterns and materials found in the home were consistent with the use of an accelerant. The Birmingham Fire Department's initial investigation pointed to arson. The Crumptons were the only ones with access to the home and were the last to leave it. The evidence showed that the Crumptons were behind in paying their bills. In addition, the Crumptons represented to the State Farm investigator that they had never pawned anything, yet the investigator found a pawn ticket in the rubble of the home.
State Farm could have legitimately inferred from these factors that the Crumptons had a motive for setting fire to their home and that they did in fact deliberately set fire to their home. The elements of a bad faith refusal to pay a claim do not require a defendant like State Farm to be undebatably correct in its conclusion that this fire was caused by arson. The plaintiff's burden of proof in a bad faith claim is to show that the nonpayment was made without any reasonable grounds. The evidence showed that State Farm had reasonable grounds to deny the Crumptons' claim.