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| MMA Case review English version |
| Copyright © 2009-2013, Marc CAMPUS |
Charges asserted against Mrs. Campus by MMA:
- 1. Absence of authority to act and misuse of authority of Mrs. Campus:
Claimed by MMA Company: Mrs. Campus acted in TEXAS RIDING LINE Co.’ name although she is not entitled to do it.
Whereas this information in the letter of complaint sent to the Chamber of Notaries.
- 2. Attempt of subrogation of the rights of the interested party by Mrs. Campus.
- 3. Absence of necessary evidences.
MMA impose to TEXAS RIDING Co. to produce proof of the fault, the damage and the casual link whereas the burden of proof lies upon
MMA.
Claims against MMA:
- 1. Wrongful conduct
Infraction to the contractual obligation constituting the action’s object
Infraction to the article 2 and 12 of the French Insurance Code
- 2. Obvious Bad Faith
The insurer is liable to act fairly and in good faith.
Because of the aleatory nature of this civil liability contract and of the absence of precision about the risk which will eventually occurs
and its consequences, this insurance contract was characterized as a contract of “the highest good faith”. In the contrary, any person
who acts knowing he/she is doing it illegally or illegitimately, or more, with a malicious intention, acts in bad faith.
In this case, MMA’s malicious intention in order to delay the payment is obvious.
Infraction to the article 1134 paragraph 3 of the French Civil Code.
- 3. Abuse of its powerful position and abuse of right
Concerning the insurances, the equilibrium between the parties is precarious.
Then, the abuse will exist when, exercising his/her right, the co contractor tries to harm or because he/she exercised it excessively or
unreasonably, he/she breaks the equilibrium of the rights of both parties.
- 4. The insurer intentionally delayed the payment of a complaint knowing it was valid
Voluntary bad interpretation of the facts and requirement of documents in order to delay the payment.
- 5. MMA’s lack of objectivity
The insurer’s attitude unreasonable and excessive
There is, indeed, in the attitude of the insurer and of his representatives, a will of delaying the reparation for the injuries legitimately
owed.
- 6. Offence against the plaintiff’s dignity, honor and reputation
These numerous faults, then, entitle TEXAS RIDING Co. to initiate proceeding against the MMA.
It is, indeed, generally at the time of the claims treatment that difficulties, liable to prompt proceedings based on bad faith and abuse of
right, arise. The attitude of the insurer, of the experts and of the investigators of all kind lacks of objectivity. It is especially the case here.
The logical consequence of the remedy of a contractual obligation’s non-fulfillment will be, then, like in every contract, the performance
the policyholder should have receive, and supposing the insurer’s conduct was not only erroneous but also guilty, the policyholder or
the third person beneficiary will be eligible for additional damages.
The legatee society and representative will thus certainly have right to the insurance indemnification and also to additional damages,
pecuniary and non-pecuniary damages which it will be able to prove.
Common Law Jurisprudence’s Tendency
Proceedings for abuse of right funded on the allegation of bad faith of an insurer were very numerous in the United States and
constitute an important worry for the insurance companies.
The American Courts seem now to be more sensitive to the fact that insurance companies have the obligation to pay the good claims
as much as the obligation to refuse to pay the non-covered claims.
The recognized criterion to determine if the insurer’s position is taken with good or bad faith and to know if this one is fairly debatable,
for that we set up the following test:
The policyholder or the third party beneficiary must prove:
(1) that his/her conduct was unreasonable
(2) that the insurer intentionally denied cover or delayed the claim payment knowing it was valid, or more, the insurer carelessly
forgot a claim validly submitted.
Although, all these criteria are from the Common Law’s jurisprudence, they appear to us they are compatible with the rules given by the
French common law. MMA’s conduct is indeed clearly abusive and reprehensible.
Legal Medium: Insurance Code’s article liable to be useful in this case
Art. 2 – The insurance is, according to the article 619 of the French Civil Code, a contract by which the insurer is bound, by means of
premiums or others payments, to provide to the policyholder or to the third person beneficiary benefiting from the subscribed
insurance, a sum of money, an annuity or another pecuniary performance, in case of the occurrence of the risk specified in the contract.
Art. 12 –The insurer has to:
1) vouch for the losses and damages;
a) resulting from fortuitous events;
b) coming from the non intentional fault of the policyholder
c) caused by persons of whom the policyholder is legally responsible for, in pursuance of the articles 134 to 136 of the French Civil
Code, whatever the nature and the seriousness of the committed fault are;
d) caused by the properties or the pets of which the policyholder is legally responsible for, in pursuance of the articles 138 to 140 of
the French Civil Code.
2) perform according to the case, at the time of the occurrence insured risk or at the contract’s expiration, the performance specified
in the contract. The insurer cannot be bound beyond all these.
Art. 59 – Whole or part of the sum due by the insurer cannot profit another person but the third person injured or the entitled beneficiary,
as long as this third party has not been paid off up to the aforementioned sum, to the pecuniary consequences of the harmful event
which caused the policyholder’s liability.
Art. 117 – The insurer is bound to pay the indemnification resulting from the guaranteed risk in a delay determined by the general
conditions of the insurance contract.
After the delay, the policyholder can claim damages, beside the owed indemnity.
Art. 113-5: The insurer must perform in good faith the obligations the insurance contract put him in charge of.
The Jurisprudence
First Chambre Civile ’s Judgment, November 14, 2001 (bulletin of judgment n° 277)
The judgment of November 14, 2001 settles, by a reversal of jurisprudence, the question to know what the scheme of the interest of
delay owed by the liability insurer is, applying article 1153 of the French Civil Code, instead of article 1153-1.
The justification of this new solution is essentially in the consideration that the liability insurer, as the property insurer, is limited to pay
a performance which is not, for him, an indemnity, and which is, as in property insurance, determined by the judge, considering a sum
fixed before.
In others words, the insurer is only bound to an obligation to pay “one sum”, in according with the article 1153’s expression.
First Chambre Civile’s Judgment, January 15, 2002:
The non-justified refusal of an insurer to apply his guarantee could led him to be condemned to repair the whole prejudice suffered by
his policyholder or third party beneficiary.
French Version
