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Monday, 24 June 2019 18:47

California Appellate Court Affirms $1 Million Bad Faith Judgment Against GEICO

Written by Autobody News Staff

Index

On August 11, 2008, Michael Mazik, 24, was involved in a serious automobile accident on a highway in Riverside County.

While driving about 45 to 50 miles per hour, he collided head-on with another car that was in his lane driving at about the same speed. The other driver, who had crossed over double yellow lines in his attempt to pass slower traffic, was killed.

 

Mazik received $50,000 from Mercury Insurance Company, the insurer for the driver of the other car who was at fault in the accident. That sum amounted to the full value of the driver’s policy.

 

On December 31, 2009, Mazik’s attorney submitted a claim to GEICO under Mazik’s underinsured motorist policy, which had a policy limit of $100,000. The letter included medical records of Mazik’s treatment to date along with other supporting documentation. In light of the “severity of the damages” and the residual effects of the injuries, the letter requested compensation of $50,000, representing the full policy amount offset by the $50,000 payment Mazik had already received.

 

Mazik filed this action for bad faith against GEICO on May 7, 2014. The case was tried to a jury in July 2016. The jury returned a verdict in favor of Mazik and awarded compensatory damages of $313,508. The compensatory damages consisted of $300,000 for “[m]ental suffering, anxiety, and emotional distress” and $13,508 for “attorney’s fees and costs to recover the insured policy benefits.”

 

The jury also awarded punitive damages of $4 million. Following a motion for a new trial, the trial court found that the punitive damages award was excessive in light of the ratio of punitive to compensatory damages and the fact that Mazik’s claim “relates to financial damages” rather than personal injury. The court reduced the amount of punitive damages to $1 million.

 

Mazik v. GEICO (2019) 35 Cal.App.5th 455 involved a policyholder’s claim for the $50,000 limits under his underinsured motorist policy. After a jury found that GEICO had unreasonably delayed paying those limits, it awarded the policyholder $313,508 in compensatory damages and $4 million in punitive damages.


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