Attorney Fees Awarded To Insured Even After Insurer Agrees to Pay

If there was any chance the public was on the verge of believing that insurance companies are stocked with competent and honest people from top to bottom, cases like Dhyne v. State Farm Fire and Casualty Co. shatter that possibility into little bits. The case cite is 2006 WL 224280 (Missouri January 31, 2006).
Kristen Dhyne was hit be an uninsured motorist, and received a broken pelvis, right kidney failure and nerve damage to a finger. A State Farm claims representative told her she was not covered by her Uninsured Motorist coverage, except for a small part of her wages not being paid by Workers Comp, that her premiums would go up if she filed a claim and that if she got any money from State Farm, it would go to repay her Workers Comp carrier. Two weeks later, the insurer asked a lawyer, who said Dhyne was in fact covered. The insurer failed to tell Dhyne that, however. She sued.
During the lawsuit, State Farm paid up. She continued the lawsuit, seeking statutory damages and attorney fees. The court held she was entitled, under Missouri law, to vindicate her right to be free of unreasonable denials of benefits. The court also said that if Dhyne and others like her couldn’t collect their attorney fees merely because the insurer paid before judgment, insurer misbehavior would be encouraged.

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