‘Bad Faith’ Award Cut to $2.1 Million

A Hollywood couple who won a $7.4-million jury verdict because they failed to get a prompt settlement of their insurance claim have been ordered to accept $2.1 million or face a new trial on the amount of damages.

Los Angeles Superior Court Judge Carlos E. Velarde said compensatory damages awarded to Alex and Mary Jean Hronis last May were excessive and unsupported by sufficient evidence of their emotional distress. Jurors had granted $225,000 to Alex Hronis, 71, and $125,000 to his 66-year-old wife.

He also ruled that the $3.5-million punitive damages granted each of the two victims against Liberty Mutual Insurance Co. were excessive in light of the company’s efforts to settle the insurance claim shortly after the couple were injured in a rear-end automobile accident Feb. 21, 1978.

Velarde, ruling on Liberty’s motions argued July 9, said Hronis should receive only $50,000 compensatory damages and his wife $75,000, plus $1-million punitive damages each. Although the jury had granted Hronis more money than his wife, the judge said evidence showed she suffered more emotional distress because the insurance company’s actions aggravated her migraine headaches.

‘Bad Faith’ Suit

The case was one of the first “bad faith” suits against an insurance carrier tried under new California case law requiring insurers to negotiate claims fairly and promptly.

Evidence showed, the judge ruled, that the couple suffered no economic loss from the delayed insurance payment and that their chief injuries were anger and frustration.

As for the accident itself, Velarde said, the couple suffered only minor back injuries, and Liberty had initially offered to settle the claim for 3 1/2 times the cost of their medical bills, which totaled $2,780. Four years after that, as a lawsuit over the injuries neared trial, the company settled Hronis’ claim for $10,000 and his wife’s for $12,500.