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Dismissal Of $5 Million Bad Faith Lawsuit

Chris Zulanas and Jess Boone obtained summary judgment in a $5,000,000 bad faith, breach of contract and fraud lawsuit arising out of an underinsured motorist (UIM) claim where the settlement was not consummated due to a dispute about the handling of a Medicare lien. The plaintiff sued his UIM carrier and the driver who hit him and settled his claims for the maximum amount of the driver’s liability coverage. He later settled his UIM claim, but refused to sign forms that would allow his UIM carrier to determine if Medicare asserted a lien against the UM settlement funds. The trial court handling the case refused to enforce the settlement and the plaintiff filed a separate lawsuit against his UIM carrier, its adjusters and its defense counsel seeking recovery of $1.0 million in compensatory damages and $4.0 million in punitive damages. The plaintiff’s bad faith, breach of contract and fraud case was removed to federal court, which entered summary judgment in favor of the UIM carrier and dismissed the claims against the adjusters and defense counsel. No appeal was taken. The opinion is available at Stone v. State Automobile Mut. Ins. Co., No. 5:16-cv-00381-AKK, 2017 WL633081 (N.D. Ala. Feb. 15, 2017).