Mansell, Engel & Cole

Appellate court concurs: insurer unquestionably acted in bad faith

National insurer Geico should have quit when it was ahead. Arguably, that was when it could have formally settled a policyholder’s accident claim by writing a $50,000 check.

The company pursued another tack, though. Namely, it opted to counter the motor vehicle crash victim’s request for damages in that amount with a series of starkly lowball offerings termed “insulting” by his legal counsel. The first such offer was for a paltry $1,000.

Ultimately, an arbitrator ruled in favor of the victim, a young man who suffered life-altering injuries in a crash years back that was caused by another driver’s negligence. As a result, Geico finally wrote that $50,000 check.

The victim was more miffed than mollified. He filed a lawsuit against the insurer for bad faith he claimed was ongoing and manifest throughout his claim ordeal.

A jury agreed. It awarded the plaintiff more than $313,000 in compensatory (actual) damages and tacked on an additional $4 million that specifically targeted Geico’s bad-faith conduct in the matter. The trial court judge subsequently adjusted the punitive damage amount to $1 million.

Geico appealed that decision, hoping to see the punitive damage award revered.

No such luck. In fact, an appellate tribunal issued a ruling late last month that strongly endorsed the lower court outcome. The panel wrote that Geico had “cherry-picked medical information and disregarded unfavorable findings” in its handling of the claim.

The bottom line on appeal was this: plaintiff’s retention of the awarded compensatory and punitive damages, coupled with Geico’s full payment of all the victim’s legal expenses incurred in pursuing the appeal.

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