Dziadek v. The Charter Oak Fire Insurance Company (Eighth Circuit)

This case involves a third-party claim under an automobile insurance policy. Although the insurer eventually paid the entire $900,000 claim, the plaintiff alleged that misrepresentations by the insurer delayed payment for over two years. A jury awarded $250,000 in attorneys’ fees, almost $400,000 under South Dakota’s 10% prejudgment interest statute, and $2.75 million in punitive damages. The Chamber of Commerce, American Tort Reform Association, and American Insurance Association retained us to file a brief addressing several issues related to the excessiveness of the punitive award. Our brief argued that above-market prejudgment interest should not be included in the denominator of the Supreme Court’s ratio guidepost and that the punitive damages in a case like this should be limited to an amount equal to or less than the compensatory damages.