A federal court jury in Montana awarded a woman $5.3 million in damages last month in a bad-faith insurance claim case. It was the largest bad faith verdict in Montana history. The jury ruled unanimously against Fireman’s Fund Insurance Co., deciding that the California-based company acted in bad faith and breach of contract in denying the woman’s insurance claim. In January 2003, the plaintiff, a 32-year-old salmon ecologist, suffered permanent brain injuries in a head-on car collision. She was not at fault in the accident, and her damages exceeded the amount of the other driver’s policy limit. The plaintiff, a doctoral student at the time of her accident, was covered under her family’s insurance plan for a total of $1.5 million in underinsured motorist benefits and $15,000 in medical pay. The insurance company refused to pay out her underinsured motorist coverage and delayed payment of her medical benefits until January 17, 2008. A check was cut by the company exactly five years from the date of the accident. It was actually on the same day as the final pretrial conference in the plaintiff’s civil case.
Because jurors found the company guilty of actual malice, the verdict included $3.5 million in punitive damages. The remaining $1.8 million was awarded for compensatory damages, including medical bills, loss of past and future earning capacity, physical pain and suffering, mental and emotional injury and loss of established course of life. The jury also found the company guilty of violating Montana’s Unfair Trade Practices Act, and awarded the $35,000.
The plaintiff was turned over to a collection agency after Fireman’s Insurance repeatedly refused to pay her medical expenses. The company’s refusal to pay the medical bills delayed and interfered with her medical treatment, according to the lawsuit. The plaintiff has since earned her doctorate, and is now working at a Biological Station on Yellow Bay.
Evidence presented at trial showed that Fireman’s Fund Insurance Co.’s net assets in 2004, the same year the plaintiff made the claim for her benefits, exceeded $9.9 billion. The insurance company went for five years before it paid any of the plaintiff’s medical expenses. The plaintiff still suffers from a short-term memory defect, which affects her performance at work, and is still undergoing treatment for her brain injury.
The suit accuses the company of misrepresenting the amount of coverage available to the plaintiff, and of ignoring her persistent claims for assistance throughout the years. In the four years after Fireman’s Insurance received notice of the plaintiff’s claim, the company obtained just one page of medical records to investigate and took no recorded statement from the plaintiff or any other witnesses or health care providers, according to the lawsuit. The company did not request an independent medical examination, and refused to pay the ongoing medical expenses, even after receiving the collection notices that the plaintiff was getting. Meanwhile, the company’s own claim file characterizes the plaintiff’s case as having the “potential for high exposure” and says “the woman had a potentially serious head injury.” James A. Manley of Polson, Montana, represented the plaintiff and did a very good job.
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