Case Summary

4826 REVIEW DENIED In an action for insurance bad faith based on an insurer's delay in paying, or refusal to pay, benefits due under the policy, the insured is entitled to attorney fees as an item of compensatory damages; in determining that an award of emotional distress damages was not excessive, the court considered the ratio of emotional distress damages to the benefits recovered plus the attorney fees and found a ratio of two to one was justified; a punitive damages to compensatory damages ratio of one to one was found not to be excessive; based on a finding that the claims representative's discretion to decide, with little or no supervision, how much to pay the insured made him a corporate policy maker, the representative's fraudulent, malicious, or oppressive conduct was chargeable to the insurer-employer making it liable for the punitive damages award.

MAJOR v WESTERN HOME INSURANCE (Bad-Faith Damages) 169 CA4 1197 [See: Foley v Interactive 47 C3 654; Gruenberg v Aetna 9 C3 566; Brandt v Superior Court 37 C3 813; State Farm v Campbell 538 US 408, T/AT 7/03]