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Example of a Massachusetts Bad Faith Insurance Lawsuit

The 2003 Supreme Court ruling in the case State Farm Mutual Automobile Insurance Co. vs. Campbell served to limit the punitive damages that can be awarded in bad faith insurance lawsuits.

In 1981, Curtis Campbell, an 83-year-old Utah resident, was driving a car that hit two other vehicles, killing Todd Ospital and causing permanent disabilities to Robert Slusher.

Campbell had auto insurance coverage through State Farm, and when Campbell was taken to court civilly, State Farm represented him. During the course of Campbell's civil trial, State Farm committed various acts of bad faith insurance, including:

• Altering company records to make Campbell look less liable
• Choosing to ignore the advice of an in-house investigator
• Refusing offers that were within Campbell's policy limit
• Telling Campbell that he didn't have to worry about losing his assets
• Telling Campbell that he didn't need legal representation in addition to that provided by State Farm

When the jury found Campbell to be completely liable for the accident and fined him more than $135,000 over his policy limit of $50,000, State Farm did not stand behind its client. Instead, State Farm responded by refusing to pay the additional $135,000 fine and instructed Campbell to sell his property.

State Farm eventually paid the fine, but Campbell decided to sue the insurer for multiple examples of bad faith insurance. By the time that State Farm vs. Campbell reached the Supreme Court, juries had awarded Curtis Campbell $145 million in punitive damages.

The Supreme Court, in a 6 to 3 ruling, stated that the $145 million in punitive damages was excessive, thereby, in essence, limiting the amount of punitive damages that can be awarded to less than 10 times the compensatory damages.

Learn more about Massachusetts Bad Faith Insurance Lawsuits by visiting our library. 

Phillips & Garcia will fight for your consumer rights in your bad faith insurance claim. Contact a qualified bad faith insurance class action attorney, contact Phillips & Garcia today to schedule your FREE legal consultation - (877) 892-562.