Jury awards $12 million in insurance case
Plaintiff's original request for $50,000 and legal costs had been turned down
An insurance company that turned down a request to settle a Juneau traffic accident claim for $50,000 in 2001 now faces more than $12 million in punitive damages.
After more than two weeks of testimony in Juneau Superior Court, a jury Thursday awarded the Arthur McLean estate $576,850 in compensatory damages, in addition to legal costs and the punitive damage award in its lawsuit against Leader Insurance, according to court documents.
McLean was involved in an accident with Juneau resident Troy Mutz on Jan. 13, 1999, on Egan Drive. McLean died of an unrelated cause Feb. 25, 1999.
The physician treating Mutz eventually advised him to give up his commercial fishing business because of his injuries from the accident, according to attorneys who sued the insurance company last year.
Mutz filed a claim against Leader Insurance, McLean's insurance company.
Five months later, Mutz offered to settle the dispute for $50,000, plus legal costs, but the insurance company did not respond, the suit states. Mutz renewed the offer to settle the case for $50,000 in November 2001. Again he received no response.
Mutz had filed a complaint against the estate on Oct. 17, 2000, but he was informed it was too late for creditors to file claims, according to the case history. The lawsuit charges that the insurance company knew of the claim within the required time.
On Oct. 3, 2002, the court awarded Mutz $512,242 from the McLean estate, estate attorneys wrote.
Mutz and the McLean estate then joined forces to sue the insurance company. The action claimed the company breached its duties to settle the claim by Mutz and exposed the policyholder's estate to excessive judgments.
The award is subject to appeal. Any award from the litigation was to be divided between Mutz and the McLean estate. Under Alaska law, half of the punitive damages are paid to the state.