As I read Hamilton Mutual Insurance Co. of Cincinnati v. Buttery, 2005-CA-000233-MR & 000426-MR (January 26, 2007)(To be published) out of the Kentucky Court of Appeals I was dismayed by the horrendous conduct of the insurance company and how long the process dragged on. I’d bet the insurer suffered little actual economic loss because they had time to invest the monies and reap the interest. Plus, they get to deduct these damage awards from their tax liability.
The home of this fellow, Buttery, was burglarized and vandalized in 1998. The adjuster who came out told him he would have the insurance money withing 10 days. I guess this insurer felt godlike where a single day is like a year and a year is like day becuase it is 2007 folks!
Buttery was asked to complete and submit claim forms. Although his homeowner’s policy provided for the more generous replacement value of the items taken or destroyed, Hamilton Mutual instead provided Buttery with claim forms to recover the actual cash value of the lost items without advising Buttery that his policy covered replacement value for losses. Buttery completed and submitted the proof of loss forms within twenty-four hours. . . .
In seeking compensation for the loss, Buttery ultimately submitted a vast amount of paper work and documentation, including: three proof of loss statements; all the receipts that he had for the stolen or destroyed items; written estimates that he had obtained for the cost of repairs to his home; and his tax returns for the previous five years. Buttery also appeared for four examinations under oath conducted by Hamilton Mutual. When he sought to present his accountant for interrogation, Hamilton declined an interview. Buttery claimed that he had sustained a loss of nearly $58,000.00. Nearly a year after the loss, Hamilton Mutual had not yet satisfied any part of the claim. Buttery filed suit. Following a jury trial, judgment was entered in favor of Buttery in the amount of $57,375.47. . . .
In an opinion rendered on June 8, 2001, a panel of this court unanimously affirmed the judgment. Hamilton Mutual then filed a motion for discretionary review in the Supreme Court, which was denied on June 5, 2002. Nonetheless, Hamilton still refused to comply with the judgment. Buttery had to file a motion in the trial court for forfeiture of Hamilton’s supersedeas bond. At long last, after more than four years, Buttery received payment for his claim. By that point, Buttery had incurred more than $28,000.00 in fees and expenses . . . .
In June 2001, Buttery filed this bad faith action against Hamilton Mutual. A jury trial was conducted in October 2004. After considering the evidence presented to explain Hamilton Mutual’s delay in paying the claim made under the homeowner’s policy, the jury returned its verdict in favor of Buttery. The jury found that Hamilton Mutual lacked a reasonable basis to refuse payment of Buttery’s claim and that it either knew that it lacked such a basis to refuse payment or that it acted with reckless disregard as to whether such a basis existed to justify its refusal to pay. The jury also found that Hamilton Mutual had violated nine separate provisions of Kentucky’s Unfair Claims Settlement Practices Act, Kentucky Revised Statutes (KRS) 304.12-230 (“UCSPA”). Buttery was awarded $251,003.05, including punitive damages; $12,737.17 in prejudgment interest; and an additional $27,102.64 in attorney’s fees.
Thankfully, the Court of Appeals agreed that the insurer’s behavior was outrageous and affirmed the decisions out of the Knox County Circuit Court. DO YOU KNOW WHO YOUR INSURER IS?