Supreme Court Decides Workers' Compensation Bad Faith Claim
In Thornton v. American Interstate Insurance Company , No. 15-1032 (Iowa May 19, 2017), plaintiff was awarded $284,000 in compensatory damages and $25 million in punitive damages by the jury in a case involving the payment of workers' compensation benefits in a permanent total disability case. The Supreme Court concludes that the insurer lacked any reasonable basis to dispute PTD status and affirmed summary judgment for the claimant. The Court also held, however, the district court erred in holding that the insurer acted in bad faith as a matter of law for resisting claimant's partial commutation petition. The judgments for compensatory and punitive damages were reversed and remanded. Plaintiff had a serious injury while working as an over the road truck driver. As a result of this injury, the insurance carrier began paying benefits and set its reserves in an amount based on a PTD finding. The evidence at trial indicated that the insurance carrier and its attorney believ