Even an Ineffective Refusal to Defend is not Bad Faith if Made in Good Faith


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In, hopefully the last appeal between the parties, First One Lending Corporation and John Vescera (collectively, “Appellants”) appealed the district court’s grant of summary judgment to The Hartford  on its claim for the amount of a settlement to a third party and bad faith and punitive damages in First One Lending Corporation; In John Vescera v. The Hartford Casualty Insurance Company, No. 20-55016, United States Court Of Appeals For The Ninth Circuit (March 19, 2021)


ZALMA OPINION


Even when an insurer wrongfully failed to defend its insured, that fact is not sufficient for bad faith tort damages since its acts were reasonable. Hartford couldn’t provide evidence to establish excluded actions. This case teaches that it would have been prudent for Hartford to provide a defense under a reservation of rights to recover payments made.  Defense should only be refused if there is absolute, convincing evidence that there was no coverage for defense.