Belated Payment of Claim Does Not Avoid Punitive Damages

When a lawyer asks for punitive damages against an insurer for bad faith conduct he or she will always ask the jury to “teach the insurer a lesson” to stop it from doing the same to others. The argument has been successful in thousands of bad faith suits brought from California to Florida and from Texas to Wyoming. The United States Supreme Court weakened, if not destroyed, that argument in Philip Morris USA, v. Williams, Personal Representative of Estate of Williams, Deceased, on Certiorari to the Supreme Court of Oregon, 127 S.Ct. 1057, 75 USLW 4101, 07 Cal. Daily Op. Serv. 1754, 2007.SCT.0000022 (2007).

The U.S. Supreme Court has put a stop to that practice. Juries can no longer be confused. They must be cautioned that no matter how awful they think the insurer’s actions were the punishment they can impose is  limited to a consideration of the harm done to the plaintiff alone.

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