A federal appeals court on Wednesday upheld a $1.1 million jury verdict against an insurer for its handling of a construction accident in which a worker lost his ability to walk.
Within months after Ernest Guthrie fell from a roof and was paralyzed from the waist down, his medical bills climbed to more than $400,000, with future payments projected into the millions, according to the ruling by the 11th U.S. Circuit Court of Appeals in Atlanta in American Builders Insurance Co. v. Southern-Owners Insurance Co .
Lansing, Michigan-based Southern-Owners was the primary insurer for Mr. Guthrie’s company, while at the time of the accident, was performing contracting work for a company that had a primary policy with Montgomery, Alabama-based American Builders and a deductible with Markel unit Evanston Insurance Co., the ruling said.
American Builders investigated the accident, assessed the construction company̵7;s liability and evaluated Guthrie’s claim, the ruling said.
“Southern-Owners, by contrast, did little to nothing for months” and “when push came to shove” refused to pay Mr. Guthrie anything to settle the claim, while American Builders and Evanston contributed up to $1 million each, according to the ruling .
American Builders sued Southern-Owners, alleging bad faith, resulting in a three-day jury trial in which the U.S. District Court in West Palm Beach, Florida entered a final judgment of $1.1 million.
A three-judge appeals court upheld the verdict.
“There was sufficient evidence to permit the jury to reasonably find that Southern-Owners acted in bad faith because they delayed acting on their duty to investigate and settle Guthrie’s clam,” the ruling said.
Attorneys in the case did not respond to requests for comment.