A cross-office Bradley team recently scored a bad faith victory for Sinclair Oil on March 18, 2022. The case involved a hotly contested business interruption loss and the delayed and frustrating recovery process that followed. Sinclair believed that its post-fire business losses were clearly covered by their Marsh-manuscripted all risks policy and that it was entitled to compensation for delayed payment on that claim. And by the end of a week-long trial, the jury agreed. The results of this case provide positive signs for insurance policyholders in bad faith claims.


In 2013, an exploded control valve and subsequent fire severely damaged a hydrodesulfurization unit in Sinclair’s refinery near Rawlins, Wyoming. The resulting case was filed in 2015 against a hold-out insurer in Switzerland, Infrassure Ltd, which was one of more than a dozen carriers on Sinclair’s London market-based property program. For many years, Infrassure successfully delayed paying its 7.5% part of Sinclair’s refinery fire insurance claim, holding it up through assertions of a government-regulated runoff, motions practice, appraisal, and appeals.

The Issues & Challenges of the Case

In 2017, the trial court dismissed the original bad faith claim on a choice of law issue, concluding that because Sinclair was headquartered in Utah, its insurance policy that covered its Wyoming refinery was not “delivered or issued for delivery” in Wyoming and could not receive Wyoming’s sharp edged extra-contractual policyholder protections. Sinclair successfully challenged that ruling in the Tenth Circuit and the Wyoming Supreme Court, securing an appellate victory and winning back its bad faith claim. The Wyoming Supreme Court unanimously ruled for Sinclair in May 2021, and the Tenth Circuit granted this rare remand jury trial solely on whether Infrassure acted in bad faith.

The Result & Takeaways

During the jury instruction conference, Infrassure conceded that the mountain of evidence showed that there actually was a delay, leaving only the question of whether the delay was “unreasonable or without cause”. After strong closing arguments, the jury rendered a plaintiff’s verdict for Sinclair Oil—finding that “[the carrier] unreasonably and without cause delayed payment of Sinclair’s covered insurance claim.”

The outcome of this case provides a couple of key takeaways for business owners:

  1. Even if your bad faith claim hits a roadblock, you may have other options to recover your losses. Many states have statutes that guarantee insureds payment or denial within a certain time period. If you feel like your insurer has been giving you the runaround, you may have legal options beyond a traditional bad faith claim.
  2. Post-appraisal payment recovery is a developing area of insurance law. Policyholders may be able to recover for payments that are ultimately late or that do not roughly correspond to the amount ultimately owed. See Sinclair Wyo. Ref. Co. v. Infrassure, Ltd, 970 F.3d 1317 (10th Cir. 2020); Randel v. Travelers Lloyds of Tex. Ins. Co., 9 F.4th 264 (5th Cir. 2021). Your bad faith business interruption case would benefit from having experienced trial and appellate counsel to guide you through these novel issues.

If your business has a concern about carrier claims handling practices during an extraordinary time element loss, we can work with your broker and resources to get to the right result – final fair payment.

Bradley’s team included Geoffrey Greeves, Kate Margolis, Marc Ayers, Justin Miller, and Anne Miles Golson.