Facts

On May 30, 2004, plaintiff Dorna Grant's husband was murdered in their home. On June 15, 2004, Dorna Grant made a claim for her husband's $500,000 life insurance policy held by Alabama-based insurance company defendant United Investors Life. The insurance company refused to pay the benefits for thirteen months, and Dorna Grant sold her house and much of her husband's property. United Investors Life interpleaded the sum of $518,616.44 in federal court.

At trial, United Investors asserted that they had no duty to pay the policy benefits because the local police had not cleared anyone as a suspect in the homicide, including Dorna Grant. United Investors maintained they complied with their contractual duties under California law by making five contacts with law enforcement over 13 months.

Plaintiff's counsel claimed that these contacts consisted of phone calls where merely a single question was asked, "Was Ms. Grant cleared as a suspect?" Plaintiff's counsel further contended that defendant had no in-house training in their claims department, nor any written guidelines or manuals on claims handling and processing.

United Investors Life's expert testified however that United Investors Life acted within California guidelines.

Result

The federal jury awarded $1,060,000 to Dorna Grant on the bad faith claim. The jury found that Dorna Grant had suffered $265,000 in economic damages due to United Investors Life's conduct, and awarded Grant $795,000 for mental distress and pain and suffering.

Deliberation

six minutes (interpleader), five hours (bad faith)

Length

two days