FOLLOW US

(USA Herald) -- This is the case of American Builders Insurance Co. v. Southern-Owners Insurance Co., in the U.S. Court of Appeals for the Eleventh Circuit.

In this case, an insurer has been found guilty of acting in bad faith after failing to reimburse another insurer for a $1 million settlement towards an injured construction worker.

The Eleventh Circuit affirmed a lower court's decision not to grant the insurer a new trial. A three-judge panel published an opinion, stating that Southern-Owners Insurance Co. harmed American Builders Insurance Co. through its inaction during a claim investigation in 2019.

Southern-Owners was the primary insurer for a company when an employee fell from a roof and became paralyzed. After investigations and assessments, American Builders and another insurer settled with the injured employee for $1 million each.

American Builders then sued Southern-Owners, alleging bad faith, and after a federal jury sided with American Builders, Southern-Owners filed a renewed motion for judgment or alternatively a motion for a new trial.

The Eleventh Circuit agreed that Southern-Owners acted in bad faith and that its actions caused American Builders to make a payment under its own policy.

The court also rejected Southern-Owners' argument that it had no obligation to act in good faith because American Builders did not have its consent to settle.