David Ramsey obtained a property damage and liability insurance policy on his boat through International Water Safety Foundation (IWSF). Ramsey was subsequently involved in a boating accident in which several people were injured or killed.
Several months after Ramsey filed a claim, IWSF denied coverage on the basis that he had provided false information on his insurance application. The insurer also refused to provide Ramsey with a copy of his policy, despite repeated requests.
Ramsey was the subject of numerous lawsuits arising out of the accident and incurred about $86,800 in attorney fees and costs as a result of IWSF’s failure to provide coverage. He also suffered emotional distress from the stress and economic uncertainty he faced.
Ramsey sued IWSF, alleging bad-faith failure to provide coverage. He claimed that the insurer had a duty to either represent him or seek a declaratory action that it was not required to cover his claim.
The court awarded $8.5 million, including $6 million in punitive damages.
Citation: Ramsey v. Intl. Water Safety Found., No. CV2009-009354 (Ariz., Maricopa Co. Super. May 3, 2010).
Plaintiff counsel: AAJ member Daniel P. Massey, Phoenix.