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Woman wins $4K on bad faith claim

Carrier lacked ‘legitimate reason for not paying’ bills

A Hampton Roads woman who brought a bad-faith claim against her insurance company has won full payment of her medical bills, along with attorney’s fees and $4,000 in punitives.

Virginia Beach lawyer Sandra L. Sampson said her client, a woman named Kellee Kraft, was hurt when her minivan was totalled in a T-bone collision. Kraft incurred more than $24,000 in medical bills.

Kraft had $10,000 in coverage for medical payments with USAA. Sampson said that after numerous requests for payment and denials, she filed suit for breach of contract. USAA had a pattern of asking for more information, then asking again. There was an appeal for almost every item in the medical bills.

The claim included a request for punitive damages under Virginia Code § 8.01-66.1, the bad faith statute.
Sampson said that after suit was filed, the company offered to pay the bills, in exchange for withdrawing the punitives claims. She said that this is the fifth time that she has filed suit against USAA – in each case, once she filed the papers, the company offered to settle at 100 percent.

This time was different. The plaintiff refused to withdraw the punitives claim.

Sampson said that after trial and the submission of briefs to the court, the company offered to pay the bills and $500 in attorney’s fees. The plaintiff refused this as well.

Virginia Beach General District Judge Calvin R. DePew Jr. ruled in the plaintiff’s favor. In a letter opinion in Kraft v. USAA Casualty Ins. Co. (VLW 012-10-01), he chastised the company.

DePew wrote, “The Court finds that for over one year the defendant refused to pay a number of medical bills submitted by the plaintiff.

“At no time did the defendant offer a legitimate reason for not paying under the policy,” he said.

The company should pay attorney’s fees and punitive damages for “its failure to respond in a reasonable manner,” he concluded. He awarded awarding her 100 percent of the remaining bills, $1,500 in attorney’s fees and $4,000 in punitive damages.

The total verdict was $13,187.

Sampson said that the company first indicated that it would appeal, then it withdrew the appeal and paid Kraft the award.

Norfolk lawyer Allan S. Reynolds Jr. represented USAA in the Kraft case.

Paul Berry, a USAA company spokesman in San Antonio, Texas, said that a month before trial, the company offered to pay the claim in full, but the plaintiff pressed forward.

Following the judge’s ruling, the result is essentially what the company offered, Berry said. The company paid the verdict rather than appeal.

“While we are disappointed in the finding of punitive damages, in the scheme of things, this is just another ruling we are paying,” Berry said.

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