Creedon & Gill partner Peter J. Creedon obtained an injunction in the Supreme Court of Suffolk County today which prevents a State Farm referred remediation-company from attempting to enforce a judgment and garnish the wages of a State Farm homeowner.
It was alleged Creedon & Gill’s Order to Show Cause that State Farm low balled its insured while adjusting a claim for a flood in the insured’s home, negotiated in bad faith, hid behind a no good “Xactimate” estimate, dragged its feet, then coerced the insured into accepting the low ball offer by cutting off his temporary housing accomodations. As a result the insured was left with too little money to both pay the remediation company and a renovation contractor.
When the money went to the renovation contractor so the home could be made livable, the remediation contractor went unpaid, obtained a judgment and sought to garish the homeowner’s wages.
Creedon & Gill argued that it is State Farm who should be paying the judgment. That their acts amounted to a violation of the covenant of good faith that exists in all insurance contracts.
Notably State Farm has recently been called out for exactly the same behavior in Federal Court in the matter of Zicherman v. State Farm Fire and Casualty Company (U.S.D.C., E.D. New York 2023) 698 F.Supp.3d 564. As the Zicherman court wrote, “[N]ew York courts have repeatedly allowed claims for punitive damages to go forward based on a breach of the covenant of good faith and fair dealing.”