False statements that Liberty Mutual made while preparing for a lawsuit relating to an underinsured motorist claim are protected by the litigation privilege and cannot be used to prove bad faith, the Connecticut Supreme Court ruled in a decision published today.
“The accuracy of a statement is irrelevant to the application of the privilege, even if the defendant knows the statement is false,” the majority opinion says.
Tamara Dorfman sued Liberty Mutual after she was injured in September 2014 when another motorist ran a stop sign in West Hartford and collided with her vehicle. The insurer for the driver who was at fault paid its $50,000 policy limit.
Dorfman says she was permanently disabled by the accident. She asked Liberty to pay an additional $200,000 for underinsured motorist benefits, which was the remaining limit on her auto insurance policy.
Liberty initially refused, claiming in court filings that it was not aware whether Smith was 100% liable for the accident. Later the insurer contended in a court filing that Dorfman’s injuries were caused by her own negligence.
Dorfman amended her complaint in 2017 to accuse Liberty Mutual of bad faith, negligent infliction of emotional distress and violations of the Connecticut Unfair Trade Practices Act and Unfair Insurance Practices Act, an accusation that allow awards of up three times actual damages, according to court documents.
Liberty admitted liability for uninsured motorist benefits when the trail started on Sept. 5,...
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