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A federal appeals court on Wednesday affirmed a $1.1 million bad faith jury verdict against an insurer over its handling of a construction accident in which a worker lost his ability to walk.
Within months after Ernest Guthrie fell from a roof and became paralyzed from the waist down, his medical bills climbed to more than $400,000, with future payments projected into the millions, according to the ruling by the 11th U.S. Circuit Court of Appeals in Atlanta in American Builders Insurance Co. v. Southern-Owners Insurance Co.
Lansing, Michigan-based Southern-Owners was the primary insurer for Mr. Guthrie’s company, while at the time of the accident he was performing contracting work for a company that had a primary policy with Montgomery, Alabama-based American Builders and an excess policy with Markel unit Evanston Insurance Co., the ruling said.
American Builders investigated the accident, assessed the construction company’s liability and evaluated Mr. Guthrie’s claim, the ruling said.
“Southern-Owners, in contrast, did little to nothing for months” and “when push came to shove” refused to pay anything to Mr. Guthrie to settle the claim, while American Builders and Evanston contributed up to $1 million each, according to the ruling.
American Builders sued Southern-Owners, charging bad faith, which resulted in a three-day jury trial in which the U.S. District Court in West Palm Beach, Florida, entered a final $1.1 million judgment.
A three-judge appeals court panel affirmed the judgment.
“There was enough evidence to allow the jury to reasonably find that Southern-Owners acted in bad faith because it delayed acting on its duty to investigate and settle Guthrie’s claim,” the ruling said.
Attorneys in the case did not respond to requests for comment.