• August 14, 2009

Plaintiffs (a couple) bought an unoccupied duplex in North Dakota, insured the property for $50,000; the house burned down and insurer American Family denied Plaintiffs’ insurance claim on the ground that the fire was a result of arson for which one of the Plaintiffs was responsible. Plaintiffs brought suit against American Family, claiming that it had breached the insurance contract and had acted in bad faith when it denied the claim.

The jury awarded plaintiffs $1,150,000 in actual damages and $1,150,000 in punitive damages on their bad faith claim (on top of the $48,000 actual damages). I guess the jury concluded that the Plaintiffs had not torched the property.

Also of interest, the U.S. Court of Appeals for the Eighth Circuit essentially held that trial counsel failed to preserve critical issues for appeal so they never really got to the substance of the argument.

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