Opsal

A jury awarded plaintiff Peter Opsal substantial contract and tort damages based on his argument that defendant United Services Automobile Association (USAA) improperly denied a claim for reimbursement under Opsal’s homeowners insurance policy. While we agree with Opsal that he was entitled to coverage under the policy, we conclude the evidence was insufficient to meet the higher standard required to support an award of compensatory and punitive damages in tort.

Factual and Procedural Background

In 1977 Peter Opsal, an active duty United States Navy officer, and his wife, Sandy, purchased a single-family residence on Healy Street in Santee. Opsal obtained homeowners insurance for the residence from USAA.

Between 1980 and 1983, the Opsals lived elsewhere and rented out the Healy Street property. In December 1983, they returned to Healy Street and replaced the carpeting in the house. Peter Opsal noticed a crack in the slab foundation “running from the entryway through the living room through a corner of an adjacent bedroom.” It was not until 1986, however, that the Opsals learned the extent of the damage. They were in the process of selling the house when a Federal…