The US Fifth Circuit Court of Appeals has vacated a $2.5 million punitive damage award granted in a lawsuit against State Farm insurance. Mississippi homeowners Norman and Geneviere Broussard filed suit against State Farm to collect benefits under their homeowners policy after their Biloxi property was completely destroyed during Hurricane Katrina. The Broussards had argued that State Farm had breached their contract for rejecting their insurance claim and a lower court agreed. A jury later awarded punitive damages after concluding that State Farm had acted in bad faith.
However, the Fifth Circuit reversed and held on Monday that punitive damages were unwarranted in the case. Furthermore, because the District Court judge found for the Broussards under a motion for judgement as a matter of law, the case has also been remanded for a new trial.
Source: http://www.ca5.uscourts.gov/opinions/pub/07/07-60443-CV0.wpd.pdf
