Question:
Discuss about the Alternative Dispute Resolution.
Answer:
In this case, the injured party had the right to sue the insurer upon obtaining the judgment against Schaeffer, as Vic is equivalent to the plaintiff, the non-insured, and the injured. The court affirmed that the insurance company never owned the injured or plaintiff any duty to act in good faith. Regarding the scenario at hand, Donna comes out as the insured. To this effect, the insurance company owes her (Donna) as an insured a duty to act in good faith. Based on the case study, the insurance company rarely offer policy limits, in the circumstance where their insured client inflicts injuries. By the insurance company, admitting liability equivalent to the policy limits would be an action of bad faith.
In the case of Schneider v. Eady, 2008-Ohio-6747 (Ohio Ct. 2008), the claimant appealed to the court by arguing that the court had acted in bad faith by granting the insurer summary judgment falsely.[i] Indeed, the claimant pointed out that as third party beneficiary of their contract that existed between the insurer and the insured, she had the right to claim for the bad faith. The claimant maintained that the contract or policy limit was intended to benefit the insured rather than the victim of the accident (the injured). Since the injured was never an intended third party, the recovery from the insurer was impossible because there was no good faith negotiation. Therefore, the court refused to use the rule that recognized the third party that was only applicable, where the parties negotiate in good faith.
The contractual duty, the company was to pay according to the policy limits and cover the medical expenses as defined their insurance contract. After honouring the insured medical liability policy, the company lived up to its obligation. The insurance company had no extra contractual duties to honour for the plaintiff.[ii] The court pronounced that the insurance had a duty of faire dealing and good faith to the insured and could have acted based on the policy contract provisions. Since Schneider has no right to recover from the insurance company for not negotiating in good faith as she was never an intended third party.
[i] Schaeffer, Whiting v. Grange Mutual Casualty Company, 1981 Ohio App. LEXIS 14351 (Ohio Ct. App. 1981)
[ii] Schneider v. Eady, 2008-Ohio-6747 (Ohio Ct. App. 2008)
