In an unpublished two page decision filed August 11, 2009, the United States Court of Appeals for the Fifth Circuit upheld a $21.6 million jury verdict in favor of a New Orleans grocer with approximately $1 million in bad faith damages. A copy of the decision is attached here.
According to the decision, the plaintiff (“Marketfare”) owns grocery stores damaged by Hurricane Katrina. The decision goes on to note that “All the stores were insured by the same company (“United Fire”), by policies that covered damages from wind, and wind-driven rain, and looting but not from flooding." When disputes arose regarding coverage as to damages, Marketfare sued United Fire. "The jury awarded extensive damages and penalties for bad faith.”
United Fire appealed the judgment, and Marketfare appealed the calculation of a penalty. Upon review, the Court of Appeals found no reversible error on United Fire’s direct appeal and that “there was ample evidence to support bad-faith penalties.”