INSURANCE LAW REVIEW
Jury Awards Over $1 Million On Finding 'Bad Faith' by Insurer in Handling of Residential Fire Claim.
A verdict by a jury in the U.S. District Court for the Southern District of New York, which included an award of $1,275,000 for an insurer's "bad faith" was characterized by the attorney who represented the claimant, "as a vindication" for all policyholders " who have been victimized by insurance companies."
Dennis T. D'Antonio, principal attorney in the New York law firm of Weg & Myers, P.C., said that the question of "bad faith" damages against Chubb Insurance was allowed to go to jury " in an unprecedented ruling" by District Court Judge Barbara Jones, who held that under New York law, every insurance company owes to duty to every policyholder, of good faith and fair dealing in adjusting insurance claims.
The claim related to a trash fire which D'Antonio said did "extensive smoke damage' to the penthouse duplex apartment of Joan Postel, a former opera singer. The November 17, 1993 fire was in an inner stairwell of the Riverhouse, which broke out at 3:00 a.m. Riverhouse is the home of such notables as Henry Kissinger, Gerald Levin and Rodman Rockefeller, among others, D'Antonio explained.
The effort by Mrs. Postel to recover for the damages to her home and possessions stretched over two years. Mr. D'Antonio said that she found herself locked in a battle with Chubb that included "low-balling tactics and 25 months of delays before any portion of the property damage claim was paid."
But he culmination, according to the attorney was the jury verdict at 8:00 p.m. on May 8. After hearing testimony during a three-week trial, the jury awarded Mrs. Postel approximately $2,000,000, the amount claimed for the property damage. And by virtue of the ruling by Judge Jones, the $1,275,000, based on its finding that Chubb had breached the implied covenant of good faith.
According to Mr. D'Antonio, prior to bringing in its verdict, the jury sent a note to the court, asking whether it would be permitted to award Mrs. Postel more damages than had been asked for.
Associated with Mr. D'Antonio in the action against Chubb, was John C. Lerner also of Weg & Myers and John Panico, a public adjuster with Affiliated Adjustment Group, Ltd. on Long Island. Mr. D'Antonio said that the Weg & Myers has had other victories for policyholders. He cited a prior action against Chubb for a house fire in Greenwich, Conn., where the verdict for a loss from a house fire was in excess of $2 million and just prior to that there was a recovery of $9 million for a homeowner whose estate in Bernardsville, NJ., involving a different insurer.