Joseph Broadway was expecting more neighborly treatment from State Farm.
After the Alabama motorist suffered serious injuries in a collision involving a negligent driver, Broadway received $25,000 from the at-fault driver’s insurer. But when Broadway filed a claim for an additional $25,000 in underinsured motorist benefits from State Farm (his own insurer), State Farm cut him a check for $5,000.
Broadway filed a civil suit against State Farm and his insurance agent, Shane Anderson, for breach of contract, bad faith and fraud.
Broadway contended that Anderson committed fraud because the insurance agent falsely represented that State Farm would treat him like a good neighbor – just as the advertising slogan promises – when he sold Broadway an insurance policy.
While some body shops might empathize with Broadway’s assertion, the courts didn’t.
A federal district court ruled in favor of State Farm. When Broadway appealed, a federal appeals court also ruled in favor of the insurance company.
“Under the circumstances of this case and viewed in the light most favorable to [Broadway], we cannot say that State Farm’s advertising slogan – ‘Like a good neighbor, State Farm is there’ – is a representation of material fact,” the U.S. Court of Appeals for the 11th Circuit wrote in its judgment. “The advertising slogan, instead, constitutes nothing more than a statement of opinion or ‘puffery.’”
The appeals court also dismissed Broadway’s claims for breach of contract and bad faith, noting that the information Broadway’s lawyer supplied to State Farm showed that his entire claim against the at-fault driver was worth between $20,000 and $30,000. Broadway asserted that his damages exceeded $50,000.
“In July 2012, State Farm sent [Broadway] a letter in which State Farm acknowledged that the parties had been unable to agree on an amount of damages, and State Farm made an ‘initial offer’ of $5,000,” the appeals court wrote in its judgment. “State Farm also indicated its willingness to engage in continued negotiations and to consider ‘any and all new information you may have that could affect our evaluation.’ Thereafter, [Broadway] cashed the $5,000 check but engaged in no further negotiations nor submitted additional documentation of his damages.”
