Foran Glennon shareholders Michael Foran and John Eggum secured a summary judgment victory in a four-year-long dispute arising from a fire at an Indiana hotel and restaurant. The United States District Court for the Northern District of Indiana recently entered summary judgment in favor of Foran Glennon’s insurer client, agreeing that there was no issue of fact for trial.
The policyholder alleged that a fire caused more than $5 million in damage, due to alleged smoke damage throughout the insured hotel and restaurant and demanded appraisal. The Court approved the framing of the issues to be addressed by the appraisal panel proposed by Foran Glennon, including RCV and ACV valuations of all insured property, in light the amount of insurance carried and the coinsurance provisions of the policy. After rejecting Plaintiff’s attempt to name its public adjuster as an appraiser, the Court declined to appoint any of Plaintiff’s proposed attorney umpires and ordered Plaintiff to select an umpire from the Insurer’s list of adjusting and construction professionals. When the appraisal award came in more than $5 million less than Plaintiff sought, it hired new attorneys and launched a lengthy effort to vacate the award. Regardless of whether the award was vacated, Plaintiff also claimed it was still entitled to present claims for bad faith and punitive damages. Indiana courts have been willing to impose significant punitive damage awards, having affirmed punitive damage awards against property insurers of more than 12.8 times the compensatory damages.
The underlying loss adjustment process was complex, involving building consultants, electrical engineers, mechanical engineers, industrial hygienists, structural engineers, forensic accountants, and other professionals. The record on summary judgment was thousands of pages, and after more than six months of consideration, the Court agreed with Foran Glennon’s client that there was no triable issue of fact for the jury and that the client was entitled to judgment as a matter of law. The Court also found the insurer properly applied the policy coinsurance provisions because, based on the valuations of the property made by the appraisers, the property was severely underinsured. Regarding the claim for bad faith and punitive damages, the Court found: “This record permits no finding of bad faith by a reasonable jury,” and accordingly granted summary judgment.
Also notable, the Court confirmed that the Indiana Unfair Claims Settlement Practices Act (UCSPA) “neither creates a private cause of action”, “nor informed the breach of contract action.” This ruling could be helpful in future cases where plaintiffs try to use the USCPA to support their claims.
Foran Glennon is proud to have delivered this great result for its client following a lengthy and hotly-contested litigation process.
Mike concentrates his practice in first-party property insurance disputes. His experience includes the full array of first-party property insurance matters, including bad faith claims, environmental damage, builder’s risk claims, construction and design defect claims, arson and fraud issues and cargo losses. His experience also extends to reinsurance disputes, particularly those dealing with first-party property claims, as well as subrogation and casualty defense.
John litigates property insurance claims around the country, including in lawsuits where bad faith and claim handling disputes are at issue. He is a frequent speaker at insurance industry events, including on topics of appraisal, causation, and claim handling practices. He’s been recognized by various organizations for his work and leadership in the legal and insurance industries, including by The American Lawyer, which named him a Midwest Trailblazer, the Illinois Association of Defense Trial Lawyers, the Chicago Daily Law Bulletin and Chicago Lawyer, Super Lawyers and Leading Lawyers.