$20 Million in Punitive Damages Awarded Against Insurance Company

By Hubert Vigilla

Published on February 24, 2006

The jury, which consisted of two women and six men, awarded the punitive damages to Gallatin Fuels, which originally filed the lawsuit in late 2002. The jury also ordered Westchester Fire Insurance Co., the insurance provider, to pay an additional $1.3. million to Gallatin Fuels for the lost equipment.

The suit arose after Westchester Fire Insurance Co. refused to cover the value of lost equipment following the flooding of the Mathies Mine in Fayette County. From 2000 to 2002, Gallatin Fuels leased mining equipment to Mon-View Mining, the entity that owned and operated the Mathies Mine. The mine was closed in March 2002 and was flooded in April of the same year, destroying all of the leased equipment.

According to Christopher Opalinski, one of several attorneys who argued on behalf of Gallatin Fuels, Westchester Fire Insurance Co. denied coverage for the equipment stating that the policy on the damaged equipment was canceled and that they could not access the mine to assess the damages.

Opalinski believes that the $20 million punitive damages award, which some believe could be record-setting, will send a message to other insurance companies that if they act outrageously they will run the risk of greater punishment.

Comment on this article →