Enrique v. State Farm Mutual Automobile Insurance Co.
2016 Del. LEXIS 349
| Del. | 2016Background
- 2005: Enrique injured by uninsured driver; exhausted PIP benefits and sought UM coverage under a $100,000 State Farm policy; retained counsel.
- State Farm adjusters and managers evaluated the claim at different times; early offers ranged $17,500–$25,000; adjuster Roach at times valued it higher (up to ~$94,960) but others remained under $50,000.
- State Farm identified medical records suggesting preexisting degenerative knee conditions and other health issues, creating a causation dispute about accident-related knee damage.
- Parties obtained an IME (Dr. Piccioni) in July 2008; the IME found preexisting degenerative changes but that the accident aggravated the condition and could not definitively resolve causation due to missing prior records.
- Enrique sued for UM benefits and bad faith; the damages case proceeded to trial (jury verdict $260,000), State Farm paid remaining policy limits; Enrique later pursued bad faith claim; Superior Court granted summary judgment for State Farm for failure to show bad faith.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether State Farm acted in bad faith by refusing to pay policy limits | Enrique: State Farm unreasonably refused to pay up to limits despite evidence of accident-caused injuries and economic pressure on Enrique | State Farm: Reasonable dispute over causation and claim valuation supported offers below policy limits; multiple qualified evaluators disagreed on value | Court: No genuine dispute of material fact; State Farm had reasonable justification—summary judgment for State Farm affirmed |
| Whether post-suit conduct (during litigation) demonstrated bad faith | Enrique: Post-suit valuations and refusal to offer limits or seek remittitur show bad faith | State Farm: Post-suit conduct still reflected legitimate disagreements and settlement judgment calls; advanced payments and offers made | Court: Post-suit record insufficient to show malice or reckless indifference; no bad faith established |
| Admissibility/weight of plaintiff’s expert (insurance broker) | Enrique: Expert opined State Farm acted in bad faith under Delaware law | State Farm: Expert not qualified to opine on Delaware law; his report was legal argument, not admissible factual expert opinion | Court: Expert afforded little weight; legal-opinion testimony improper |
| Whether plaintiff’s failure to provide missing records supports bad faith inference | Enrique: State Farm should have obtained records or pursued further investigation; insurer’s failure to pursue full inquiry indicates bad faith | State Farm: It requested prior records and IME addendum; gaps in records were plaintiff’s counsel’s responsibility; reasonable basis to rely on existing records | Court: Lack of complete priors did not create an inference of bad faith; missing records undermined plaintiff’s causation proof, supporting insurer’s stance |
Key Cases Cited
- Tackett v. State Farm Fire & Cas. Ins. Co., 653 A.2d 254 (Del. 1995) (explains bad faith in insurance context and availability of punitive damages for willful or malicious denials)
- Connelly v. State Farm Mut. Auto. Ins. Co., 135 A.3d 1271 (Del. 2016) (treats insurance policies as contracts with special duties of good faith)
- E.I. DuPont de Nemours & Co. v. Pressman, 679 A.2d 436 (Del. 1996) (addresses insurer/insured relationship and punitive damages doctrine in bad faith cases)
- Nemec v. Shrader, 991 A.2d 1120 (Del. 2010) (contract law principles governing remedies and implied covenant of good faith)
- Keefe v. Prudential Prop. & Cas. Ins. Co., 203 F.3d 218 (3d Cir. 2000) (discusses inherent subjectivity and variability in valuing personal injury claims)