Yan Fang Du Ex Rel. Joon Hak Kim v. Allstate Insurance

I. OVERVIEW

Appellant Yang Fang Du brought this suit against Appellee Allstate Insurance Company and its subsidiary Deerbrook Insurance Company (collectively “Deer-brook”) for breach of the implied covenant of good faith and fair dealing. Du was injured in an accident caused by Deer-brook’s insured, Joon Hak Kim. After Du received a judgment against Kim in the amount of $4,126,714.46, Kim assigned his bad faith claim to Du.

Du brought the instant suit against Deerbrook, arguing that Deerbrook breached the implied covenant of good faith and fair dealing owed to its insured Kim when Deerbrook did not attempt to reach a settlement of Du’s claims after Kim’s liability in excess of the policy limit became reasonably clear. Du appeals the district court’s rejection of Du’s request to instruct the jury that it could consider Deerbrook’s failure to effectuate a settlement in determining whether Deerbrook breached the implied covenant. We conclude that Du’s proposed jury instruction is consistent with the law but that there was no evidentiary basis for the instruction. Accordingly, we affirm the district court’s judgment.

II FACTUAL AND PROCEDURAL BACKGROUND

1. Du’s 2006…