Lance Camper Manufacturing Corp. v. Republic Indemnity Co. of America

Introduction

A workers’ compensation insurer, Republic Indemnity Company of America (Republic), appeals after a jury awarded $6.3 million in compensatory and punitive damages in an insurance bad faith and breach of contract action brought by an insured employer, Lance Camper Manufacturing Corporation (Lance Camper).

Contrary to Republic’s contentions, the award of contract damages is supported by substantial evidence, and no instructional error occurred regarding the concept of bad faith. There is no requirement that Lance Camper establish Republic’s conduct in setting reserves was inconsistent with what another “reasonable insurer” might do. Rather, the standard as to reserves is that they must be set at the reasonable expectation of the claim’s value. Nor is there any merit to Republic’s invitation essentially to judicially legislate a new theory limiting the tortious breach of the implied covenant of good faith and fair dealing only to violations of a public duty independent of the contract. And the jury was properly instructed on punitive damages, which were supported by clear and convincing evidence.

We also find largely unavailing Lance Camper’s cross-appeal…