Our client developed Complex Regional Pain Syndrome, commonly known as CRPS, after a serious personal injury. CRPS is a chronic pain condition, often described by patients and physicians as one of the most painful conditions a person can live with, and once it takes hold, it frequently does not go away. The damages in this case plainly exceeded the at-fault driver's insurance policy limits. The evidence was there, the diagnosis was documented, and the insurance company had every reason to know its policyholder faced serious excess exposure. The insurer refused to pay the policy limits anyway. That refusal turned what should have been a straightforward personal injury settlement into a bad faith insurance case. This CRPS injury bad faith insurance case resolved for more than $20 million, a result that dwarfed the insurance policy that started it all.
$20M+
Bad faith recovery above the refused policy limits
$13.8M
Prior firm bad faith verdict against Allstate (Madrigal)
Lifelong
CRPS treatment horizon that drove the claim's value
Complex Regional Pain Syndrome, formerly known as Reflex Sympathetic Dystrophy, is a chronic neurological pain condition that typically develops after an injury to a limb. It causes severe, persistent pain that is often disproportionate to the severity of the original injury, along with changes in skin temperature, color, and swelling, and in more advanced cases, changes to skin, hair, and nail growth, and muscle atrophy. CRPS has no simple cure. Treatment is often lifelong, involving pain management specialists, physical therapy, nerve blocks, and in some cases spinal cord stimulation or other invasive interventions, all with variable and often limited success in fully resolving the underlying pain. Because CRPS is a lifelong condition with substantial ongoing treatment costs and a profound impact on a person's ability to work and function, the value of a claim involving a well-documented CRPS diagnosis is often extremely high, frequently well beyond typical injury policy limits.
This case began as a personal injury matter. Our client suffered an injury that led to a CRPS diagnosis, and it became apparent that the resulting damages, medical treatment, lost earning capacity, and pain and suffering, clearly exceeded the at-fault party's available insurance coverage. A policy-limits demand was made, the standard mechanism by which an injured party's counsel puts an insurer on notice that the case's value exceeds the policy and gives the insurer the opportunity to settle within those limits and protect its own policyholder from personal excess exposure. The insurer refused the demand.
When an insurer fails to settle within policy limits despite a reasonable opportunity to do so, and the case ultimately resolves for an amount exceeding those limits, the insurer can face bad faith liability for the entire excess, not just the original policy amount.
A well-documented policy-limits demand gave the insurer a genuine, fair opportunity to settle within the at-fault party's coverage and to protect its own policyholder from excess exposure. The insurer declined that opportunity.
California law imposes an implied covenant of good faith and fair dealing on every insurance contract, requiring an insurer to give the interests of its insured at least as much consideration as its own financial interests when evaluating a settlement demand within policy limits.
The firm applied doctrine developed through its Madrigal case, a bad faith verdict against Allstate obtained in the United States District Court for the Central District of California in 2015 that resulted in a $13.8 million verdict. That case turned on the same principle: an insurer that unreasonably fails to settle within limits exposes its policyholder, and itself, to the full excess.
Once the insurer refused the policy-limits demand, The Homampour Law Firm took over the matter to pursue the bad faith claim.
Insurance companies sometimes refuse policy-limits demands because they doubt the severity or permanence of an injury, because they believe a jury will value the case lower than the demand suggests, or occasionally because of institutional caution or delay that has little to do with the actual merits of the claim. Whatever the reason, California law does not give an insurer the benefit of the doubt once a claim's value has become reasonably clear. If an insurer had the information necessary to recognize that a claim's value exceeded the policy, and failed to settle within limits when it had a genuine opportunity to do so, it can be held responsible for the full excess verdict or settlement, not merely the original policy amount. This is precisely why CRPS cases, and other conditions involving well-documented, chronic, high-value damages, are particularly likely to produce strong bad faith claims when an insurer refuses to settle. A chronic pain diagnosis with extensive medical documentation and a clear prognosis for ongoing treatment leaves little room for an insurer to credibly claim it did not understand the case's true value.
The bad faith claim in this case resolved for more than $20 million, an amount that reflected not the original policy limits the insurer had refused to pay, but the full scope of damages that resulted from CRPS and the insurer's unreasonable refusal to protect its policyholder by settling within those limits when it had the chance. No verdict or settlement amount for any other matter is stated or implied by this description. Prior results do not guarantee a similar outcome. The Homampour Law Firm handles bad faith insurance cases on a contingency fee basis and advances all litigation costs, so clients pay nothing unless there is a recovery.
The breakdowns below cover building CRPS damages proof, proving an insurer's unreasonable refusal to settle, recovering Brandt fees as damages, and projecting lifetime future medical costs.
Building CRPS damages proof
Proving an insurer's refusal to settle
Projecting future CRPS medical costs
We take excess-exposure and insurance bad faith cases as counsel or co-counsel and pay statutory referral fees.
Refer a caseCRPS is a chronic, often severe neurological pain condition that typically develops after an injury and can require lifelong treatment, and a well-documented CRPS diagnosis often produces damages that exceed typical insurance policy limits.
Bad faith occurs when an insurer fails to give its policyholder's interests at least as much consideration as its own when evaluating a reasonable settlement demand within policy limits, exposing the policyholder, and the insurer, to liability for a judgment exceeding those limits.
This CRPS injury bad faith insurance case resolved for more than $20 million, an amount well above the original insurance policy limits that the insurer had refused to pay.
