Bad Faith Requires an Effective Insurance Policy

No Contractual Right to Benefits No Bad Faith

Post 4846

The USDC granted the motion of insurer Medical Protective Co. (Med Pro) motion for summary judgment relating to Plaintiff Michaela Jeffery's declaratory judgment action. Then, Med Pro moved that because it does not have a contractual duty to indemnify Dr. Justin Clemens for his negligent treatment of Ms. Jeffery, it is entitled to summary judgment on Ms. Jeffery's bad-faith claim.

In Michaela Jeffery v.  Medical Protective Co., CIVIL No. 3:19-cv-00023-GFVT, United States District Court, E.D. Kentucky, Central Division, Frankfort (July 25, 2024) the USDC ruled on the remaining bad faith claim.

FACTS

From October 2013 to February 2014, Plaintiff Michaela Jeffery received dental care from Dr. Justin Clemens, then a medical professional insured by Defendant Med Pro. During this time, Dr. Clemens negligently installed Ms. Jeffery's dental implants and then “abandoned [her] when she needed additional dental work” to correct the implants and repair the extraction sites. In response to Dr. Clemens' negligence, Ms. Jeffery sued him in state court and obtained a default judgment for $283,095.00.

Unable to collect from Dr. Clemens, Ms. Jeffery sued Med Pro to obtain a declaration that the company is required to indemnify Dr. Clemens against Ms. Jeffery's default judgment. Med Pro defended and eventually, the Parties filed cross-motions for summary judgment on the contractual question. In June 2022, the USDC found that, because Ms. Jeffery had failed to fully satisfy the contract's notice requirement, Med Pro was entitled to summary judgement and Ms. Jeffery was not owed declaratory judgment and Med Pro had no contractual duty to indemnify Dr. Clemens.

ANALYSIS

The moving party has the burden of demonstrating the basis for its motion and identifying those parts of the record that establish the absence of a genuine issue of material fact. Once the movant satisfies its burden, the non-moving party must go beyond the pleadings and come forward with specific facts demonstrating there is a genuine issue in dispute.

The USDC concluded that Kentucky law is unequivocally clear that absent a contractual obligation, there simply is no bad faith cause of action, either at common law or by statute. Because Med Pro does not have a contractual obligation to provide coverage, summary judgment is appropriate.

Dr. Clemens' liability was established. However, since the Court found as a matter of law that Med Pro has no contractual duty to indemnify Dr. Clemens for his treatment of Ms. Jeffery, Med Pro cannot be found liable for bad faith.

ZALMA OPINION

Apparently Dr. Clemens has scampered away from the judgment against him and Ms. Jeffrey's judgment was useless so she attempted to collect from his insurance company that did not defend him to the allegations of her suit. She failed in her attempt to show Med Pro owed a duty to defend Clemens so her claim of bad faith also failed. Sometimes, winning a suit and obtaining a judgment becomes no more than a piece of useless paper.

(c) 2024 Barry Zalma & ClaimSchool, Inc.

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