Property Insurer Assessed Punitive Damages
A jury in Colorado awarded the maximum $3 million under a property and casualty policy for the value of a building totally destroyed by fire. In addition, the building’s owner obtained a punitive damage award in the sum of $2.3 million due to the insurance company’s bad faith handling and denial of the claim.
The owner of the building was a mortgage company that had taken title by foreclosure. After the fire, the insurer alleged that the building was worth nothing because it was an abandoned apartment complex. The insurer also refused to pay claiming that it should have been notified that the building was vacant.
The jury rejected the insurance company’s arguments and found that it acted in bad faith.
The case was venued in the District of Colorado.
See James River Ins. Co. v. Rapid Funding, 07-cv-01146.