Safeco Ins. Co. of America v. Sims

This is an appeal from a judgment in favor of William E. Sims in the amount of $30,000.00, and in favor of Betty V. Sims in the amount of $75,000.00, against Safeco Insurance Company of America (Safeco) in a bad faith tort action. We reverse and render on the ground that the insureds' failure to file a counterclaim in a prior declaratory judgment action bars the instant tort claim for bad faith.

Safeco issued a policy of automobile insurance to the Simses under a "budget plan" which allowed the insured to purchase six months of coverage with two separate premium payments. The first three…