Court Finds Regional Claims Administrator Qualifies as a “Managing Agent” of an Insurance Company, Justifying an Award of Punitive Damages

Posted in: Auto Insurance, Bad Faith, Breach of Contract, Duty to Settle, Insurance Litigation Blog, Punitive Damages May 29, 2019

When insurance companies, including those offering disability, life, health or accidental death policies, engage in conduct that is sufficiently egregious, a court may award punitive damages against the insurance company.  California Civil Code Section 3294 (“Section 3294”) provides that where the defendant is guilty of oppression, fraud or malice, the plaintiff may recover punitive damages for the sake of example and by way of punishing the defendant.  If the defendant is a corporation, such as an insurance company, the defendant is liable for punitive damages if the act of oppression, fraud or malice was authorized or ratified by an officer, director or managing agent of the corporation or if the officer, director or managing agent was personally guilty of such …

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California Court Affirms Decision Finding Bad Faith Where Insurer Interprets Policy Against Insured's Interests

Posted in: Attorneys Fees, Attorneys' Fees, Bad Faith, Commercial General Liability Insurance, Duty to Defend, Insurance Bad Faith, Insurance Litigation Blog, Life Insurance, Punitive Damages October 11, 2017

On August 31, 2017, the California Court of Appeal discussed a variety of topics touching upon important matters in insurance “bad faith” litigation in Pulte Home Corp. v. Am. Safety Indemnity Co., 14 Cal.App.5th 1086 (Aug. 31, 2017). In this blog, we discuss the case in detail as well as the potential benefits the opinion provides to insureds’ future claims for bad faith. Before we discuss the details of the case, we first address the basics of insurance bad faith. Next, we detail the issues addressed in the case, the facts of the case, the court’s reasoning and ultimate rationale. Finally, we address the Pulte’s broader impact, solidifying the insurer’s good faith duty to interpret ambiguous policy provisions in …

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Have “Quack” Medical Reviewers Caused Denial of Your Long-Term Disability Claim? California Court of Appeal Berates Insurance Company for Controlling Medical Peer Reviews

Posted in: Bad Faith, Case Updates, Disability Insurance News, Expert Testimony, Health Insurance, Insurance Litigation Blog, Punitive Damages December 13, 2016

During their Presidential election campaigns, Donald Trump and Hillary Clinton spotlighted for America flaws in our criminal justice system.  They raised questions about whether the criminal probe into Ms. Clinton’s private email server was handled honestly or politically.  Conservatives bitterly complained that FBI director Jim Comey’s recommendation not to prosecute Ms. Clinton was inconsistent with the FBI’s fact findings (that she carelessly mishandled classified emails) and influenced by the left-leaning Justice Department rather than justice.  On the flip side, Liberals vehemently complained that on the eve of the election Director Comey made an unprecedented announcement that the FBI had reopened its criminal investigation into Ms. Clinton’s private emails, attempting to influence the election.…

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Recent Juror Attitudes Should Frighten Insurance Companies

Posted in: Bad Faith, Disability Insurance, Insurance Litigation Blog, Life Insurance, Long Term Care Insurance, Punitive Damages June 23, 2015

Recent verdicts from across the nation in disability, life and health insurance policy cases must be alarming for big corporate insurance companies.  The trend is for jurors to award individual plaintiffs astronomical punitive damage verdicts, showing their general disdain for insurance companies and tendency to empathize with policyholders, particularly where a person’s health is at issue.…

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California Court of Appeal Finds That a 10:1 Ratio Between Punitive Damages and Compensatory Damages Awards Satisfies Due Process

Posted in: Breach of Contract, Case Updates, Disability Insurance, Disability Insurance News, Insurance Bad Faith, Insurance Litigation Blog, Punitive Damages September 06, 2013

A 10-to-1 ratio of punitive damages to compensatory damages awards in an insurance bad faith case passes Constitutional muster.  So says the California Court of Appeal in its decision in Nickerson v. Stonebridge Life Insurance Company, __ Cal. App. 4th ___, 2013 Cal. App. LEXIS 583 (2013).  The decision is significant in that it affirms that punitive damages are not limited to a single-digit ratio and that a ratio of punitive to compensatory damages of 10-to-1, and perhaps higher, falls within the maximum permitted under due process.  Additionally, the decision clarifies what damages may be included in fixing the ratio of compensatory to punitive damages.…

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Court Approval is Not Needed to Assert a Punitive Damages Claim Against a Health Care Service Plan

Posted in: Case Updates, Health Insurance, Punitive Damages February 27, 2012

In a victory for health insurance policy holders over health insurers/health care service plans, in Kaiser Foundation Health Plan, Inc, v. Superior Court (Rahm, et al, Real Parties), 2012 Cal. App. LEXIS 138 (Cal. App. 2d Dist. Feb. 15, 2012), the Court of Appeals ruled that a plaintiff does not need to obtain approval from the trial court before asserting a claim for punitive damages against a health care service plan.  Specifically, the Court ruled that California Civil Procedure section 425.13 applies only to health care providers (such as doctors), but does not apply to health care service plans such as Kaiser Foundation Health Plan or Anthem/Blue Cross.

The Rahm family filed a lawsuit against Kaiser Foundation Health Plan …

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California Courts Rule Punitive Damages Award of 16 to 1 Ratio Not Unconstitutionally Excessive.

Posted in: Punitive Damages August 30, 2011

IMS00102.jpgIn a somewhat surprising recent decision, the California Court of Appeal upheld a punitive damages award that carried a ratio of more than 16 to 1 based on the compensatory damages awarded by the jury.  The ruling was surprising considering the United States Supreme Courts’ recent holding that “grossly excessive” punitive damages awards offend due process under the Fourteenth Amendment, and stating that “in practice, few awards exceeding a single-digit ratio between punitive and compensatory damages, to a significant degree, will satisfy due process.” State Farm Mut. Automobile Ins. Co. v. Campbell, 538 U.S. 408, 425 (2003).  California courts have once again sent a clear message of willingness to uphold just punitive damages awards under appropriate circumstances, applying a balancing …

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Insurers Cannot Escape Bad Faith Liability By Relying On In-House Experts And The "Genuine Dispute Doctrine"

Posted in: Disability Insurance, Disability Insurance News, ERISA, Insurance Bad Faith, Insurance Litigation Blog, Punitive Damages August 23, 2011

Insurers often wrongfully deny policy benefits to their insureds in situations where there may be some uncertainty as to coverage.  Despite an overarching duty to act reasonably and find in favor of coverage in such situations, insurers often will deny coverage and rely on their in-house medical experts’ (i.e., nurses, doctors) analysis and opinions as a basis for denial.  In such situations, the insurer denies coverage at its peril.…

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What are the Available Remedies Against an Insurance Company That Has Acted in Bad Faith?

Posted in: Attorneys' Fees, Disability Insurance, Disability Insurance News, ERISA, Insurance Bad Faith, Insurance Litigation Blog, Insurance Questions and Concepts, Punitive Damages June 06, 2011

This article will be the second in a series of articles by McKennon Law Group PC addressing and answering basic questions concerning insurance law.  This one addresses: What are the available remedies against an insurance company that has acted unreasonably in handling an insurance claim?

The most common causes of action against insurers in the non-ERISA context are breach of contract and bad faith. 

The breach of contract claim allows an insured to recover policy benefits owed under the insurance policy plus applicable interest from the date the benefits were due (or at the rate of 10% on delayed disability payments in California).  The benefits due will depend on the type of policy at issue.  They may be a specific …

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Dental Hygienist Wins Large Jury Verdict in Disability Insurance Lawsuit

Posted in: Case Updates, Disability Insurance, Disability Insurance News, Insurance Bad Faith, Insurance Litigation Blog, News, Punitive Damages February 10, 2011

In 1996, Plaintiff Laura Kieffer developed carpal tunnel syndrome and severe cervical pain which forced her to stop working as a dental hygienist. Thereafter, Kieffer started receiving disability payments under an individual disability insurance policy she purchased from Paul Revere Life Insurance Company and its parent company the Unum Group Corporation. Even though she had been receiving disability payments for nearly ten years, Unum terminated her benefits in March of 2008. As a result, Laura sued in Los Angeles Superior Court alleging that Unum had unreasonably terminated her benefits. She sued for breach of contract, insurance bad faith and for punitive damages. This week, a jury awarded her $4.2 million in compensatory and punitive damages. Unum intends to appeal the …

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