Hyland v. Liberty Mutual Fire Insurance Co.

In action by plaintiff-insured against defendant-insurance company alleging that defendant improperly failed to represent or indemnify plaintiff in underlying state-court tort action that resulted in $4.6 million default judgment entered against plaintiff, Dist. Ct. erred in finding that defendant was responsible for entire $4.6 million judgment, where, even though defendant conceded that it had improperly failed to defend plaintiff in said action, insurance policy provided plaintiff only $25,000 per person in coverage, and plaintiff could not otherwise establish that defendant’s actions caused her any more than $25,000 loss. Moreover, plaintiff never alleged that defendant acted in bad faith so as to justify any award over policy limit, especially where underlying lawsuit failed to contain allegation that insured actually gave consent to third-party to drive covered vehicle as required for coverage under terms of policy. Also, plaintiff failed to show that provision of lawyer by defendant would have resulted in lesser state-court judgment.