Callahan & Blaine, California’s premier litigation firm, announced a major victory against the insurance industry’s new attitude of “deny the claim” and “pay after sued” policy. In a unanimous decision, the Court of Appeal in San Diego, California, agreed with Callahan & Blaine that Prudential Insurance could be held liable for the damage it caused by its wrongful refusal to pay a widow’s claim on her husband’s life insurance – even though Prudential paid the claim shortly after the initial lawsuit was filed.
“Mark Trapana purchased a life insurance policy from Prudential Insurance only two days before he died in a tragic motorcycle accident. But when his widow, Lisa Trapana, asked Prudential to honor her husband’s life insurance, the company refused to recognize the insurance policy.”
“Once we filed a lawsuit on Mrs. Trapana’s behalf, Prudential paid the claim a week later, but offered nothing to compensate her for its bad faith in denying her claim in the first place. We argued that it was against public policy to allow an insurance company to act in bad faith by denying the existence of an insurance policy and paying claims only if the insured hired an attorney to prosecute her claims. We asked for a penalty to discourage insurance companies from acting in bad faith in the future.”
The court agreed that Prudential could be held liable for the damage it caused by its wrongful refusal to pay Mrs. Trapana’s claim. They awarded the widow attorneys’ fees, emotional distress, and punitive damages.
