Last week, a jury in California awarded a homeowner more than $1.3 million arising from a dispute with his Ameriprise insurer.1

According to the complaint, the coverage dispute arose after the insured’s home was damaged during a September 2013 burglary. The burglars not only stole property, but also turned on the water in an upstairs bathtub, causing water to flood the home and soak drywall behind kitchen cabinets downstairs.

After the insured was unable to resolve numerous disputes with Ameriprise, he filed suit. In his complaint, the insured stated that Ameriprise refused to pay his claim in full and made insufficient repairs, resulting in his family being displaced for 14 months. After returning home, one of insured’s sons, with severe epilepsy, experienced increased difficulty breathing and had to be hospitalized.

Later, at the insured’s urging, Ameriprise agreed to have a third-party vendor retest the home for mold. In 2015, the vendor issued a report finding the home tested positive for mold and recommending measures the insured had requested all along.

The complaint further alleged that Ameriprise refused to pay for additional repairs or living expenses owed under the insurance policy.

The Los Angeles jury found that Ameriprise was liable and awarded more than $134,000 in withheld benefits. The jury also awarded the insured $200,000 in damages for mental suffering, anxiety, humiliation, and emotional distress (a category of damage recoverable in a claim for breach of the implied covenant of good faith and fair dealing).

The jury also awarded the insured plaintiff $1 million in punitive damages after concluding that an Ameriprise employee engaged in wrongful conduct that amounted to malice, oppression or fraud.

This case serves as a good example of how policyholder advocates can obtain justice for their clients when insurers fail to properly adjust, investigate, pay claims on time, and treat insureds unfairly. When an insurer breaches the implied covenant of good faith and fair dealing, it exposes the insurer to a wider variety of damages than a mere a breach of contract, including economic losses (such as attorneys fees) caused by the insurer. It can also (as was the case here) subject the insurer to damages for emotional distress.

Last, while punitive damage awards are very difficult to establish and recover because they require a showing that the insurer engaged in malice, oppression, or fraud, when there is evidence to support such a showing (as was the case here), claims for punitive damages provide insureds an opportunity to “punish” insurers for their bad conduct and harmful treatment.
1 Steven Lopez v. IDS Property Casualty Insurance Co. et al., No. BC605264, in the Superior Court of the State of California for the County of Los Angeles, Central District.

  • shirley heflin

    Dear Mr. Pollack:

    It’s great when an Insured is awarded punitive, emotional trauma/stress and breach of contract damages at the same time – looks like that’s how they do it in California.

    Tampa, FL

    • me not you

      It sure is. But one has to wonder if a trillion dollar company that is as ruthless and useless as Ameriprise acts like even cares about writing a $1.3 million check. I suspect it is more like they like the bad publicity that they believe will discourage people from suing them because a trial can take years. I wonder what God will do to this company.

  • me not you

    Ameriprise has done the exact same things they did to the above cited family, and far worse to me and my family, even causing the disappearance or death of my service-dog, over the course of the past 18 months and counting on our claim following a very similar type of claim with extreme damage that began with a burglary. They have a tendency it seems to exploit the disabled whether it is the homeowner or their children. Ameriprise has sadistically exploited my Marine Corps service-connected total disabilities along the same lines as they did to the homeowners above and their severely disabled child. I thank Merlin Law Group for looking at my at my claim in the past and giving me very useful feedback and direction along the way. I have tried to avoid suing Ameriprise after filing court papers through another law firm several months ago. While the Bible says to go to your neighbor and try to work things out instead of rushing into court, I would caution, ‘Watch out for Ameriprise, they are vicious, corrupt, very sneaky, and worse than useless.’ Semper Fi to Merlin Law Group.