Steven Plitt, Expert Witness Steven Plitt, Expert Witness
Insurance Bad Faith Claim Handling Expert Serving Clients Nationwide

June 2017 Archives

A 10-to-1 RATIO OF COMPENSATORY DAMAGES TO PUNITIVE DAMAGES WAS RECENTLY PERMITTED BY THE CALIFORNIA COURT OF APPEALS IN AN INSURANCE BAD FAITH CASE

The California court of appeals in Nickerson v. Stonebridge Insurance Co. 5 Cal App, 5th 1,209 Cal Rptr. 3d 690 (2d Dist., November 3, 2016) recently found that the Court was constrained by case law in California and the California constitution from allowing a punitive damage award to be more than 10 times greater than the compensatory damage award. In calculating the compensatory damage award within the ratios denominator, the trail court properly excluded and the court of appeals held that it was proper to excluded contract damages and potential damages to others from the equation. However, the court found that the award of attorney fees in favor of the insured and compelling the insurer to pay contract benefits (so called Brandt fees) should be included in the ratios denominator.

CALIFORNIA COURT FINDS THAT SPECULATION UPON HOW AN EMPLOYEE WAS INJURED DID NOT GIVE RISE TO A POTENTIAL FOR COVERAGE AS AN ADDITIONAL INSURED

The issue of whether a general contractor qualified as an additional insured under a sub contactor excess policy for a work related injury turned on whether there was evidence that the sub-contractor caused the claimants injuries according to the recent case of Advent Inc. v. National Union Fire Insurance Co. 6Cal AP 5th 443, 2016 WL7100489(6th Dist., December 6th 2016)

MAINE SUPREME COURT WAYS IN ON APROTIONING DAMAGES

The Maine Supreme Court in Harlor v. Amica Mutual Ins. Co., 2016 WL 6518589 (ME November 3, 2016) held that when an insurance company refuses to defend its insured on a mixed complaint containing allegations of both potentially covered and uncovered claims the insurer would be liable only for that portion of the settlement between its insured and the claimants representing payment for covered claims.

KENTUCKY COURT FINDS THAT OWNED-BUT-NOT-SCHEDULED POLICY EXCLUSION FROM UIM COVERAGE WAS ENFORCEABLE

Kentucky Supreme Court held in Philadelphia Indem. Ins. Co., Inc. v. Tryon, 502 S.W.3d 585 (Ky. 2016) that UIM exclusion pertaining to owned-but-not-scheduled automobiles were enforceable under Kentucky law provided that the policy expressly and plainly apprised the insured of the exclusion. According to the Supreme Court, Kentucky's public policy did not bar reasonable UIM exclusion provisions. Under Kentucky law, UM coverage was required by statute but UIM coverage was not. The Kentucky Supreme Court had previously ruled that a policy exclusion from the UIM definition of a vehicle available for the insured's regular use was enforceable and the fact that UIM benefits were non-mandatory by nature under Kentucky law, the Kentucky Supreme Court found that Philadelphia Indemnity's policy encompasses UIM exclusion provisions like the owned-but-not-scheduled exclusion.

THE CALIFORNIA COURT OF APPEALS FINDS THAT A 10:1 RATIO OF COMPENSATORY DAMAGES TO PUNITIVE DAMAGES IS APPROPRIATE IN AN INSURANCE BAD FAITH CASE AND THAT THE RATIO SHOULD BE NO HIGHER

In Nickerson v. Stonebridge Life Ins. Co., 5 Cal.App.5th 1, 209 Cal.Rptr.3d 690 (2nd Dist. 2016), the California Court of Appeals recently reduced a $19M punitive damages award in an insurance bad faith case to $475,000 applying a 10:1 ratio of compensatory damages to punitive damages.

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