The Appellate Group

Lund v. Truck Ins. Exch.

Lund v. Truck Ins. Exch., 2021 UT App 64 (Christiansen-Forster, J.)

Civil Procedure; Insurance

Truck Insurance Exchange (TIE) declined to pay the Insured’s underinsured motorist (UIM) claim after TIE determined Insured were at least fifty-percent at fault for a motor vehicle accident. The Insured filed a complaint, contending that the denial breached the covenant of good faith and fair dealing. TIE filed a motion for summary judgment, which the district court denied. TIE sought interlocutory appeal and the Court of Appeals reversed, holding:

  • Pursuant to Utah law, a person seeking to recover damages after a car accident may only do so if the fault of the other parties involved exceeds the fault of the person seeking to recover.
  • If a claim filed by an insured to an insurance agent is “fairly debatable, failure to comply with the insured’s demands cannot form the basis of bad faith” and a claim is fairly debatable if there is a “legitimate factual dispute as to the validity of an insured’s claim for benefits.”
  • The court concluded that TIE conducted a diligent investigation and that it had a sufficient basis to determine that Insured was at least fifty-percent at fault for the two-car accident. Because there was a legitimate dispute about whether Insured was more than fifty-percent at fault, the claim was fairly debatable. Thus, the district court erred in denying summary judgment in favor of TIE.

Read the full court opinion