Mock

The defendant and appellant, Michigan Millers Mutual Insurance Company (Michigan Millers), appeals from a judgment entered following a jury verdict in which the plaintiffs Owen R. Mock and Dora Mock (plaintiffs) were awarded compensatory and punitive damages. The action arose out of a claim made by plaintiffs under a policy of homeowner’s insurance issued to them by Michigan Millers.

Plaintiffs asserted that Michigan Millers had unreasonably delayed its investigation, adjustment and payment of that claim and had improperly attempted to condition the ultimate payment which was made. Plaintiffs sought and obtained a recovery of compensatory and punitive damages based on a special jury verdict which found that Michigan Millers had breached the implied covenant of good faith and fair dealing and had violated Insurance Code section 790.03, subdivision (h). The jury also found that Michigan Millers had done so with malice.

While we agree that the evidence supports the jury’s conclusion on liability for compensatory damages, we conclude that it clearly miscalculated those damages. In addition, the trial court prejudicially misinstructed the jury on the award of punitive…