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Dawson and Rosenthal
Dawson and Rosenthal

How the location of the courthouse can make a big difference

When an insurance bad faith case is contentious enough, the parties will not only dispute the facts. They will disagree about where the trial should be held.

In the law, which court is empowered to preside over a case is known as a question of “jurisdiction.” Much of the time, where a case ends up can have important implications for the person whose insurance company has mistreated him or her. Different states have different laws that may or may not help the plaintiff make his or her claim.

In a local example, a federal district court ruled in Barten v. State Farm Mutual Automobile Insurance Company that a man’s bad faith claim should be judged under the laws of Arizona, not Michigan. The ruling was vital to the plaintiff’s case, because Michigan does not recognize bad-faith claims against insurance companies.

The plaintiff in the case was paralyzed in a car crash in Michigan. He later moved to Arizona, where a girlfriend helped him with everyday tasks. But she later moved away, leaving the man unable to care for himself.

The dispute with State Farm arose over how many hours of attendant care the plaintiff was entitled to have paid for. When the plaintiff sued for bad faith and breach of contract, State Farm moved that Michigan law should apply to the bad faith claim. The plaintiff said that Arizona law should apply, and the federal court agreed.

The court found that, though the plaintiff’s injury occurred in Michigan, State Farm’s alleged bad faith and the plaintiff’s resulting harm all happened in Arizona. Therefore, Arizona law applied.

Jurisdictional disputes can be highly technical, requiring the assistance of an experienced insurance bad faith attorney to navigate.