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Bad Faith in Arkansas Requires Proof of Dishonest, Malicious, or \\nOppressive Conduct Including Hatred, Ill Will, a Spirit of Revenge\\n\\nOwners Insurance Company moved for summary judgment as to a claim of bad\\n faith. Separately, Owners argued the Court should make a finding that \\nthere no evidence to support a punitive damages instruction.\\n\\nIn RMS Warehouse 1315, LLC v. Owners Insurance Company, No. 5:22-CV-5114,\\n United States District Court, W.D. Arkansas, Fayetteville Division \\n(July 7, 2023) the USDC resolved the bad faith issue.\\n\\nBAD FAITH\\n\\nThe tort of bad faith is established in Arkansas when an insurance \\ncompany affirmatively engages in dishonest, malicious, or oppressive \\nconduct in order to avoid a just obligation to its insured. The tort \\nrequires evidence of a state of mind characterized by hatred, ill will, \\nor a spirit of revenge. Importantly, bad faith does not arise from a \\nmere denial of a claim; there must be affirmative misconduct.\\n\\nPlaintiff RMS contends its two claims of loss should have been covered \\nunder the policy of insurance it had with Owners. The first loss \\noccurred on May 4, 2020, following a hailstorm that caused damage to \\nRMS\'s warehouse. The second loss was in February 2021, after a winter \\nstorm event. RMS narrows its bad-faith claim to Owners\'s treatment of \\nthe winter-storm claim and explicitly states that Owners did not act in \\nbad faith with respect to the hailstorm claim.\\n\\nThe only evidence RMS cited in support of its bad-faith claim is the \\ndenial letter sent by insurance adjuster Brian Doherty. RMS believes Mr.\\n Doherty \\u201cmisrepresented\\u201d in the letter what the insurance policy \\nactually provided and omitted reference to crucial portions of the \\npolicy that provided coverage.\\n\\nThe standard for establishing a claim for bad faith is, and always \\nshould be, rigorous and difficult to satisfy. RMS betrayed a fundamental\\n misunderstanding about the tort when, at one point in its briefing, it \\ncharacterizes Owners\' actions as \\u201c[a]t best... a mistake,\\u201d Neither a \\nmistake nor a \\u201crefusal to pay a disputed claim\\u201d is tortious behavior \\naccording to Arkansas law.\\n\\nSummary judgment on Count II, the tort of bad faith, was therefore \\ngranted. As a consequence, RMS is not entitled to a punitive damages \\ninstruction.\\n\\nThe Motion was granted as to Count II, and the claim of bad faith was \\ndismissed with prejudice; as a result, RMS will not be entitled to an \\ninstruction on punitive damages.\\n\\nZALMA OPINION\\n\\nActing as its own worst enemy the insured\'s brief admitted that the \\ninsurer erred. A mistake may be sufficient to establish a breach of \\ncontract but is insufficient to prove the tort of bad faith and the \\nright to seek punitive damages.\\n\\n(c) 2023 Barry Zalma & ClaimSchool, Inc.\\n\\nPlease tell your friends and colleagues about this blog and the videos \\nand let them subscribe to the blog and the videos.\\n\\nSubscribe and receive videos limited to subscribers of Excellence in \\nClaims Handling at locals.com https://zalmaoninsurance.locals.com/subscribe.\\n\\n\\nConsider subscribing to my publications at substack at https://barryzalma.substack.com/publish/post/107007808\\n\\n\\nGo to Newsbreak.com\\xa0 https://www.newsbreak.com/@c/1653419?s=01\\n\\n\\nFollow me on LinkedIn: \\nwww.linkedin.com/comm/mynetwork/discovery-see-all?usecase=PEOPLE_FOLLOWS&followMember=barry-zalma-esq-cfe-a6b5257\\n\\n\\nDaily articles are published at https://zalma.substack.com. Go to the podcast Zalma On Insurance at https://podcasters.spotify.com/pod/show/barry-zalma/support; Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; https://creators.newsbreak.com/home/content/post; Go to the Insurance Claims Library \\u2013 https://zalma.com/blog/insurance-claims-library.