Bill Text: VA SB171 | 2016 | Regular Session | Prefiled

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Bill Title: Insurance; jury award of attorney fees for bad faith.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Introduced - Dead) 2016-02-03 - Passed by indefinitely in Courts of Justice (9-Y 6-N) [SB171 Detail]

Download: Virginia-2016-SB171-Prefiled.html

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16100421D
SENATE BILL NO. 171 Offered January 13, 2016 Prefiled December 30, 2015 A BILL to amend and reenact §§38.2-209 and 38.2-807 of the Code of Virginia, relating to jury award of attorney fees; bad faith. ---------- Patron-- Surovell ---------- Referred to Committee for Courts of Justice ----------

Be it enacted by the General Assembly of Virginia:

1. That §§38.2-209 and 38.2-807 of the Code of Virginia are amended and reenacted as follows:

§38.2-209. Award of insured's attorney fees in certain cases.

A. Notwithstanding any provision of law to the contrary, in any civil case in which an insured individual sues his insurer to determine what coverage, if any, exists under his present policy or fidelity bond or the extent to which his insurer is liable for compensating a covered loss, the individual insured shall be entitled to recover from the insurer costs and such reasonable attorney fees as the court or jury may award. However, these costs and attorney's fees shall not be awarded unless the court or jury determines that the insurer, not acting in good faith, has either denied coverage or failed or refused to make payment to the insured under the policy. "Individual," as used in this section, shall mean and include any person, group, business, company, organization, receiver, trustee, security, corporation, partnership, association, or governmental body, and this definition is declaratory of existing policy.

B. Nothing in this section shall be deemed to grant a right to bring an action against an insurer by an insured who would otherwise lack standing to bring an action.

C. As used in this section, "insurer" shall include "self-insurer."

§38.2-807. Attorney fees.

A. In any action against an unlicensed insurer upon an insurance contract issued or delivered in this the Commonwealth to a resident of this the Commonwealth or to a corporation authorized to do business in this the Commonwealth, the court or jury may allow the plaintiff a reasonable attorney fee if (i) the insurer has failed to make payment in accordance with the terms of the contract for 30 days after demand prior to the commencement of the action and (ii) the court or jury concludes that the refusal was vexatious and without reasonable cause. The fee shall not exceed 33 1/3 percent of the amount that the court or jury finds the plaintiff is entitled to recover against the insurer, but shall be at least $200.

B. Failure of the insurer to defend the action shall be deemed prima facie evidence that its failure to make payment was vexatious and without reasonable cause.

2. That the provisions of this act are in response to the Supreme Court of Virginia's decision in REVI, LLC v. Chi. Title Ins. Co., 2015 LEXIS 114, and shall not be interpreted to create a presumption that the term "court" as used elsewhere in the Code of Virginia necessarily excludes a jury.