Insurer terminates benefits: Refusal to pay: Bad faith: Verdict: Punitive damages

Law Reporter, Sep 2002

Gibson v. ITT Hartford Ins. Co., Iowa, Pottawattamie County Dist. Ct., No. LACV068142, Apr. 22, 2002.

Gibson, 38, was working at a cafe when he slipped and fell in a walk-in refrigerator. He aggravated a previous back injury, resulting in a 28 percent impairment. A worker's compensation insurer determined that the injury was workrelated and paid benefits for a year. When Gibson was cleared to return to work, the cafe did not rehire him. Gibson was later referred to a psychiatrist for treatment of major depression. The insurer claimed that the injury was not work-related, terminated Gibson's benefits, and refused to pay for psychiatric care. Gibson was out of work for approximately three years.

Gibson and his wife sued the insurance company, alleging bad faith, abuse of process, intentional interference with a contract, misrepresentation, breach of fiduciary duty, loss of consortium, and intentional infliction of severe emotional distress.

The court granted defendant's motions for directed verdict on the issues of punitive damages, intentional infliction of emotional distress, and breach of fiduciary duty. The jury found for plaintiffs on the remaining issues, awarding about $24,800, including $7,000 to Gibson's wife for loss of consortium, plus interest and costs. The trial court then granted defendant's motions for judgment notwithstanding the verdict on all of the claims submitted to the jury, except bad faith and abuse of process.

Plaintiffs appealed the judge's ruling on punitive damages, and the Iowa Supreme Court reversed. 621 N.W.2d 388 (Iowa 2001). In a second trial, the jury awarded plaintiffs $20 million in punitive damages.

Plaintiffs' psychiatry expert witness in this case was Bruce Gutnik, Omaha, Neb.

Defendant's worker's compensation expert was Barry Moranville, Des Moines, Iowa.

Plaintiffs' Counsel

*W. Curtis Hewett, Council Bluffs, Iowa

Documents in this case are available through the Court Document Sets section in the back of this issue, courtesy of Mr. Hewett.