Polisso

Century Surety Company (Century), an insurance company, appeals from the judgment after a jury awarded Charles A. (hereafter sometimes Chuck) and Therese (hereafter sometimes Terry) Polisso (the Polissos) and Kinzel Glass Company (Kinzel) $637,911 in total compensatory damages and $2,015,000 in punitive damages on their cross-complaint for, inter alia, breach of contract, breach of the implied covenant of good faith and fair dealing, and malicious prosecution.

In 1996 Chuck Polisso, as “owner” of Kinzel, contracted with S.W. Allen Construction, Inc. (Allen) to install seven glass panels in an underground viewing chamber being built by the United States Forest Service at Taylor Creek near Lake Tahoe. Before the project was completed, a heavy rainstorm hit the Tahoe area and caused the creek to overflow and submerge the viewing chamber, triggering a series of events that resulted in damage to the glass.

In the same year, “Chuck Polisso DBA: Kinzel Glass Co.” purchased from Century a commercial lines policy for property damage liability and glass coverage in connection with the Allen contract. The policy covered not only Charles Polisso as a named insured but also his…