Austero

The action in the trial court was for breach of contract, declaratory relief, emotional distress, so-called bad faith, and for fraud brought by an insured in a first party case against his own disability insurance carrier (the Company). Trial was had before a jury. The jury returned a verdict in favor of plaintiff in the amount of $67,200 compensatory and $336,000 exemplary damages. By later stipulation of counsel, $2,800 in interest was added to the award. The Company now appeals from the judgment entered on the verdict.

The Policy Provisions

In 1957, plaintiff as a member of a group developed from the roster of the Orange County Bar Association subscribed for disability coverage under a policy written by the Company. In 1969, a new policy was issued, which provided in pertinent part:

In January 1973, a third policy was issued which provided in pertinent part:

The Disability History

Plaintiff entered private law practice in 1955, and, until 1971, maintained a successful and prosperous practice. In 1971, plaintiff’s son, Wayne, passed the California State Bar Examination and became an associate in his father’s firm. During 1971, according to the later statements of…