Leslie Weinstein and Linda Weinstein, husband and wife, individually and as guardians ad litem for Sarah Weinstein v. Prudential Property and Casualty Insurance Company, Prudential General Insurance Company, Liberty Mutual Insurance Company, and LM Property and Casualty Insurance

Summary

The Idaho Supreme Court reviewed an insurance coverage and bad-faith dispute arising from an automobile accident involving uninsured motorists. The court affirmed the compensatory-damages judgment, upheld the constitutionally permissible remitted punitive-damages amount, denied the plaintiffs’ cross-appeal, and vacated the attorney-fee award and the option for a new punitive-damages trial. The opinion addressed breach of MedPay and uninsured-motorist provisions, insurer bad faith, punitive damages, jury instructions, and attorney fees.

Holdings

1. The UM policy did not require a single lump-sum payment or permit Liberty Mutual to delay payment of undisputed medical expenses until the entire UM claim was settled. Because the policy specified no payment time, the law implied a reasonable time for performance, and Liberty Mutual breached the policy by failing to pay undisputed amounts within a reasonable time.
2. A first-party insured must show that the insurer intentionally and unreasonably denied or withheld payment, the claim was not fairly debatable, the denial or failure to pay was not the result of a good-faith mistake, and the resulting harm was not fully compensable by contract damages.
3. An insurer may rely on the terms of its policy but may not delay payments based solely on internal policies that are not part of the insurance contract.
4. Punitive damages against an insurance corporation require proof that an officer or director participated in or ratified the wrongful conduct, but direct evidence of such participation or ratification is not required. Undisputed evidence of a company-wide claims-handling policy may establish corporate liability by inference.
5. An insured seeking attorney fees under Idaho Code section 41-1839 must submit a proof of loss providing sufficient information to investigate and determine liability and must identify the claimed loss or provide a basis for calculating it. A proof of loss limited to past medical expenses does not support fees for future medical expenses, general damages, or other amounts not demanded before suit.
6. The remitted punitive-damages amount of $1,890,000 was consistent with due process, and the court declined to vacate the punitive-damages award based on the asserted evidentiary and instructional errors.

Questions Presented

1. Whether the district court abused its discretion by allowing amendments to the complaint, including amendment to add punitive damages.
2. Whether distribution of annotated exhibits to the jury required a mistrial or new trial.
3. Whether the jury instructions adequately addressed emotional distress, the Idaho Unfair Claim Settlement Practices Act, and corporate liability for punitive damages.
4. Whether substantial evidence supported the findings of breach of the UM coverage and insurance bad faith.
5. Whether the damages were excessive or inadequately mitigated.
6. Whether Sarah was entitled to attorney fees under Idaho Code section 41-1839.
7. Whether the 2003 amendments to Idaho Code section 6-1604 applied.
8. Whether juror misconduct required a new trial.
9. Whether the punitive-damages award was unsupported, procedurally defective, or violated due process.

Disposition

other