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February 23, 2006
For more information contact:
Allysn Hurley
Director of Marketing and Business Development
Eckert Seamans Cherin & Mellott, LLC
ahurley@eckertseamans.com
Jury Orders Insurance Company to Pay $20 Million in Punitive Damages for Bad Faith Handling of a Claim
Business insurance carriers are going to think twice before denying a claim
for a frivolous reason after this week’s jury award of $20 million in punitive
damages to Gallatin Fuels of Uniontown,
Pennsylvania.
“In the world of insurance, $20 million in punitive damages is considered a
very substantial jury award,” said Christopher Opalinski, an
attorney with Eckert Seamans, who successfully argued the case for
Gallatin in federal court with his
colleagues John Williams and Gary
Walker. "It's clear that this jury was sending a message to
Westchester that it would not tolerate deceptive claims handling practices or
the wrongful denial of a legitimate claim."
Gallatin lost all the mining
equipment it was leasing to the Mon View Mining Company in
Fayette County,
Pennsylvania, when power was terminated to
the Mathies Mine and the mine flooded in 2002. Westchester Fire Insurance
Company denied the claim and
Gallatin sued for the insured value
of the equipment, as well as punitive damages. Before Chief District Judge
Donnetta Ambrose of the Federal Court for the Western District of Pennsylvania,
the Eckert Seamans attorneys pointed out that the initial claim form was
rejected in part because it did not include documentation of the value of the
loss, although neither the claim materials nor the insurance company’s
representatives mentioned that it was necessary to provide this
documentation at the outset of the claim.
“The insurance carrier kept putting up a number of procedural roadblocks,
none of which involved the loss itself,” said Opalinski, “Judging from the
size of the punitive part of the jury’s verdict, I think we argued successfully
that the denial was for frivolous reasons. “
About Eckert Seamans Cherin & Mellott
Eckert Seamans Cherin & Mellott, LLC (www.eckertseamans.com), a national law firm with ten offices throughout the eastern United States, provides a full range of legal services nationwide to businesses of all sizes, institutions, municipalities, colleges and universities, government agencies and individuals. Its practice areas encompass litigation, including mass tort and products liability litigation, corporate and business law, intellectual property law, labor and employment relations, aviation law, bankruptcy and restructuring, employee benefits, environmental law, construction law, municipal finance, real estate, and tax and estate law. Eckert Seamans has offices in Pittsburgh, Harrisburg, Philadelphia, West Chester and Southpointe, Pennsylvania; Wilmington, Delaware; Morgantown, West Virginia; Boston, Massachusetts, Washington, D.C. and White Plains, New York.
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