Gagnon

Statement of the Case

Plaintiff Theresa F. Gagnon and her husband Milton L. Gagnon (the decedent) sued defendant Continental Casualty Company (Continental) for compensatory and punitive damages arising from Continental’s termination of the decedent’s benefits under a disability insurance policy. They alleged causes of action for breach of contract, breach of the implied covenant of good faith and fair dealing, breach of fiduciary duty, fraud, and violations of Insurance Code section 790.03. 1 Milton Gagnon died prior to trial, and *1601 thereafter plaintiff prosecuted the action both as executrix of his estate and in her individual capacity. After a trial, the jury found that Continental had breached its fiduciary duty toward the decedent and violated section 790.03, subdivision (a) [issuing a misleading brochure] and subdivision (h)(7) [unfair settlement attempts]. It awarded plaintiff $70,000 for her emotional distress due to the Insurance Code violations and $2.5 million in punitive damages due to these violations and the breach of fiduciary duty.

On appeal, Continental claims the award of damages for emotional distress must be reversed because plaintiff lacked…