The ultimate verdict shouldn’t be essentially the top of an insurance coverage dispute. That’s precisely what we’re seeing now after the jury returned a really massive enterprise interruption verdict in extra of $80 million towards the insurers within the JW Aluminum case. The insurers have filed post-trial motions asking the courtroom to put aside the decision, order a brand new trial, or considerably scale back the judgment. 1
This isn’t uncommon. In reality, it’s virtually computerized after a big policyholder win.
The insurers’ main argument is easy: the jury acquired it mistaken. They declare that no affordable jury might have reached this verdict primarily based on the proof. In response to the insurers, the enterprise interruption damages have been speculative, untethered from actuality, and pushed extra by emotion than proof. They argue that the policyholder failed to determine that it might legally function its tools through the claimed loss interval and did not show misplaced income with the extent of certainty the regulation requires.
In different phrases, the insurers are saying the jury ought to by no means have been allowed to award what it did, and the decide ought to now step in and repair it.
The insurers additionally assault the authorized framework the jury was given. They argue that the courtroom utilized the mistaken authorized requirements, notably regarding alternative value protection and the so-called prevention doctrine. In response to the insurers, the jury was requested the mistaken questions and allowed to seek out legal responsibility with out the required findings, comparable to intent. They are saying these errors alone justify a brand new trial or an amended judgment.
There may be additionally a well-recognized subtext operating via the motions: the decision was too large to be proper. The insurers level to the dimensions of the award as proof that keenness, prejudice, or sympathy influenced the jury. That theme reveals up incessantly in post-trial motions after a policyholder wins a big case. Juries are accused of punishing insurers relatively than making use of the regulation, and judges are urged to step in because the final line of protection.
None of this could shock anybody who has tried massive insurance coverage circumstances. Nonetheless, I generally assume individuals fail to say that post-trial motions after which appeals happen as a rule when the result’s a big cost.
Put up-trial motions like these are normal working process. Insurers can be criticized internally if they didn’t file them. Any person has to clarify why the loss occurred. Even when the possibilities of success are slim, these motions protect points for attraction and generally persuade trial judges to trim verdicts or order new trials.
What occurs subsequent can also be predictable. The trial decide will rule on the motions. If the decision survives intact or largely intact, an attraction is nearly sure. Appeals are widespread after massive verdicts. Insurers usually imagine appellate courts can be extra receptive to technical arguments about proof, jury directions, and damages methodology.
For policyholders, this section requires persistence. A jury verdict is a significant milestone, however it’s not often the top of the street. Put up-trial motions and appeals are a part of the terrain, notably when enterprise interruption losses attain 9 figures.
The true lesson shouldn’t be that the decision is fragile, however that insurers combat hardest when the stakes are highest. Massive verdicts invite large authorized battles. That’s not a flaw within the system. It’s merely how insurance coverage litigation works.
I beforehand wrote about a big verdict being overturned earlier this 12 months in When the Jury’s Phrase Doesn’t Stand: Trial Court docket Overturns Brotherhood Mutual Unhealthy Religion Verdict. So, one can not simply say that insurance coverage corporations at all times lose these motions and are submitting them for delay.
I’ll hold readers abreast of developments on this case and supply a extra detailed dialogue of the problems introduced on this fire-related enterprise interruption lawsuit.
Thought For The Day
“The arc of the ethical universe is lengthy, however it bends towards justice.”
— Martin Luther King Jr.
1 JW Aluminum Co. v. ACE American Ins. Co., No. 2:21-CV-1034 (D. S.C.) (See, Defendants’ Rule 59 Movement for a New Trial or to Amend the Judgment Relating to the Prevention Doctrine and Award of Substitute Value Worth, and Defendants’ Movement for Judgment However the Verdict on Plaintiff’s Solid Coil Declare).
