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Textron Financial Corp. v. National Union Fire Insurance Co. of Pittsburgh6/28/2002
Plaintiff Textron Financial Corporation sued defendant National Union Fire Insurance Company of Pittsburgh, Pennsylvania (National Union) and others over its refusal to honor a claim for insurance benefits concerning property damage to a commercial bus in which plaintiff held a security interest. Plaintiff settled with two parties and proceeded to trial against National Union and American International Adjustment Company, Inc. (AIAC), National Union's claims adjuster. After a trial divided into three phases, the trial court entered judgment on a jury's special verdict awarding plaintiff $165,414.40 in compensatory damages and $10 million in punitive damages against National Union. The court entered judgment, including costs, for AIAC against plaintiff.
Both plaintiff and National Union filed postjudgment motions. The trial court denied National Union's motion for judgment notwithstanding the verdict and plaintiff's motion for a new trial, but conditionally granted National Union a new trial unless plaintiff agreed to reduce the punitive damage award to $1.7 million. Plaintiff agreed to the remittitur. The court also struck plaintiff's request for expert witness fees.
Both plaintiff and National Union appealed from the judgment and postjudgment orders. Plaintiff challenged the trial court's striking of its cause of action for unfair business practices, the judgment in favor of AIAC, including costs, the remittitur of punitive damages, and the denial of its request for expert witness fees. National Union attacked the punitive damage award on several grounds, and the trial court's refusal to offset the amounts plaintiff received in the pre-trial settlements.
In an unpublished opinion filed January 29, 2001, we affirmed the judgment and postjudgment orders in their entirety. National Union filed a petition for writ of certiorari with the United States Supreme Court. On October 9, the Supreme Court issued an order granting the writ, vacated our judgment and remanded the matter to us for further consideration in light of Cooper Industries, Inc. v. Leatherman Tool Group, Inc. (2001) 532 U.S. 424. We granted the parties the opportunity to file supplemental briefs on the issue of whether the punitive damage award violates federal due process when reviewed under a de novo standard of review.
Having reviewed the matter in accordance with the United States Supreme Court's direction, we again affirm the trial court's judgment and postjudgment orders in their entirety.
FACTS
Il Sung Ko operated a tour bus company, Taeguk Tour and Sightseeing (Taeguk). Plaintiff loaned Ko funds to purchase a bus, receiving in return a security interest in the vehicle. The security agreement required Ko to insure the bus. Ko obtained a National Union liability insurance policy through D. W. Ferguson & Associates, Inc. (Ferguson), an independent insurance brokerage. The policy was issued through TRM International, Inc. (TRM), a company appointed by National Union to solicit, bind, write, and administer policies for its commercial bus program. The policy listed plaintiff as a loss payee and required National Union to mail plaintiff notice in advance if it cancelled the policy.
Taeguk suffered a downturn in business and Ko failed to timely pay his insurance premiums. In October 1992, TRM sent Ko notice it intended to cancel the policy. TRM did not send a copy of the cancellation notice to plaintiff. The policy terminated November 27.
Beginning in late October and throughout November, Ferguson and Taeguk discussed reducing the insurance premiums by deleting coverage for some of Ko's vehicles. Ferguson also corresponded with a TRM und
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