Court Affirms Bad Faith Judgment But Reduces Punitive Damages

LOS ANGELES - A California appellate court has affirmed a bad faith judgment for a policyholder that sued over lost income from a flood, but reduced punitive damages and removed prejudgment interest from the compensatory award. Amerigraphics v. Mercury Casualty Co., No. B208654 (Calif. Ct. App., 2nd Dist.).

The California Court of Appeal, Second District, held in a published opinion on March 23 that Amerigraphics Inc. was entitled to the $130,000 it sought in compensatory damages, and was also entitled to $500,000 in punitive damages for Mercury Casualty Co.'s "egregious conduct."

Amerigraphics sued Mercury for breach of contract and bad …