The Reasonable Justification Standard for Bad Faith Claims

In Shah v. Metropolitan Life Ins. Co., a Southern District of Ohio federal judge recently reaffirmed the long-standing standard for a bad faith claim against an insurer in Ohio. Citing the Ohio Supreme Court’s 1994 decision in Zoppo vs. Homestead Ins. Co, the Court held that, to survive a motion for summary judgment on a bad faith claim against an insurer, the insured must provide evidence which tends to show that the insurer had no reasonable justification for refusing the claim, and the insurer either had actual knowledge of that fact or intentionally failed to determine whether there was any reasonable justification for refusing the claim. This is an important decision awarding summary judgment to an insurer, given the age of Zoppo, and with many declined claimants adding bad faith and punitive damages allegations to their complaints for coverage.

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