Put the Settlement Demand in Writing
Bristol Springs Custom Homes, LLC v. Argo Grp. US, Inc., et. al., 2026 WL 2137953 (4th Cir. 2026)
Insurance disputes do not always end once an underlying lawsuit is resolved. In Bristol Springs Custom Homes, LLC v. Argo Group US, Inc., Bristol Springs sought additional damages from its insurer after a construction defect lawsuit resulted in a judgment against the company. Bristol claimed the insurer acted in bad faith by failing to settle the homeowners’ claims and asserted both common law and statutory bad faith claims under West Virginia law. The district court ruled in favor of the insurers, and Bristol appealed.
The Fourth Circuit affirmed. The court found that Bristol had not shown the insurer failed to respond to any reasonable settlement demand because the record contained no evidence that Bristol ever actually made one. Although Bristol pointed to correspondence expressing hope that the insurer would resolve the judgment, the court explained that those letters did not ask the insurer to accept a settlement demand or increase its settlement offers. Without evidence of a real demand, Bristol could not establish the insurer breached its obligations under West Virginia’s common law bad faith standard. The court also rejected Bristol’s statutory bad faith claims, agreeing with the district court that the provisions Bristol relied upon apply to claims brought by third-party claimants against an insured, not first-party claims brought by the insured against its own insurer.
For policyholders and insurers, this decision highlights the importance of creating a clear record during settlement negotiations.
If an insured believes its insurer should settle a claim, it should make a specific and documented demand rather than relying on general communications or “expressions of hope.”
The case also serves as a reminder that not every insurance dispute can support a statutory bad faith claim. Whether those claims are available depends on who is bringing the claim and the language of the applicable statute.
This post is for informational purposes only and does not constitute legal advice. If you have questions about your specific situation, you should contact a lawyer for assistance. Nothing herein is intended to create any attorney-client relationship between you and DLM LAW.
