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Failure to Provide a Proper Standard for Damages Reduced Judgement
Post 4758
In Malcolm Wiener v. AXA Equitable Life Insurance Company, No. 3:18-cv-00106-RJC-DSC, United States District Court, W.D. North Carolina, Charlotte Division (March 8, 2024) Wiener obtained a $16 Million jury award that the Fourth Circuit required the USDC to address AXA's argument for post-trial relief challenging the amount of damages AXA argued that the jury rested its $16 million award on an improper standard, and thus, that the award lacks a basis in substantial evidence.
BACKGROUND
In 1986 and 1987, Malcolm Wiener purchased three life insurance policies from AXA Equitable Life Insurance Company with a total face value of $16 million. In December 2013, each of the three policies lapsed for nonpayment of premiums. Wiener sought reinstatement, but AXA denied his application.
The current case relates only to AXA's negligence in coding Wiener's medical history. In January 2018, Wiener filed the present action alleging, among other things, that AXA was negligent in “failing to adequately read, understand and verify and accurately report Plaintiff's medical history, conditions and events to third parties." According to evidence introduced at trial, Wiener sought new insurance coverage from at least eight carriers but two denied him coverage altogether and those that offered insurance made only preliminary, revocable offers for $10 million policies at double the standard rate. Wiener's history of atrial fibrillation and monoclonal gammopathy was the basis for the refusals.
The Fourth Circuit addressed the causation issue, holding that “[a]mple evidence supported the jury's verdict for Wiener.” “But because AXA's argument for post-trial relief challenging the amount of damages . . . was neither raised nor briefed before [the Fourth Circuit],” the panel remanded that narrow issue back to the USDC.
DISCUSSION
AXA contended the jury based its award on an improper standard (the $16 million death benefit from his lapsed policies); and second, that, even if the $16 million death benefit was an appropriate measure, Wiener failed to provide necessary evidence of future premiums to offset that $16 million award.
Under North Carolina law, the party seeking damages must show that the amount of damages is based upon a standard that will allow the finder of fact to calculate the amount of damages with reasonable certainty.
Here, the jury awarded Wiener actual damages of $16 million before deducting $8 million for his own failure to mitigate. The jury's award, AXA argued, relied upon an improper standard because this action sought compensatory damages for AXA's negligence in coding Wiener's medical history, not reinstatement of Wiener's previous policies.
The Court found that Wiener's lapsed $16 million death benefit is an improper baseline of damages. Because Wiener offered no baseline to support the jury's $16 million award, the award lacks a sufficient evidentiary basis.
Throughout this case, Wiener has offered no expert testimony or other evidence of the damage caused by his effective uninsurability. And the record makes clear that, even absent the erroneous MIB codes, Wiener was effectively uninsurable or uninsurable at a reasonable cost. The Court found that “no substantial evidence” supports the jury's $16 million actual damages award.
Even extending Wiener “the benefit of all reasonable inferences” and resolving all disputed facts in his favor, the Court found that no jury, viewing the evidence in the light most favorable to the winning party, could have properly reached the conclusion reached by this jury on compensatory damages. The Court found that the damages award was against the clear weight of the evidence and conditionally granted a new trial in the event that the Order is vacated or reversed.
AXA Equitable Life Insurance Company's Renewed Motion for Judgment as a Matter of Law, was granted. The jury verdict was set aside, and Plaintiff Malcolm Wiener is instead entitled to an award of nominal damages in the amount of one dollar ($1).
ZALMA OPINION
Nothing is certain in the law. The $16 million verdict was overturned because, although the jury felt bad for Mr. Weiner, the reason his insurance policies lapsed was that he did not pay the premium and when he tried to reinstate them his health conditions had changed and he was uninsurable. The jury rewarded him with the cash value of the policies that would have been available if he had paid the premium which had no relationship to the actual alleged tortious conduct. The big verdict became nothing more than a piece of paper that counsel could frame and hang on a wall but will not result in cash to the plaintiff.
(c) 2024 Barry Zalma & ClaimSchool, Inc.
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Subscribe to my substack at https://lnkd.in/gcZKhG6g
Go to X @bzalma; Go to Barry Zalma videos at Rumble.com at https://lnkd.in/gV9QJYH; Go to the Insurance Claims Library – https://lnkd.in/gwEYk
Jury’s Findings Interpreting Insurance Contract Affirmed
Post 5105
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Madelaine Chocolate Novelties, Inc. (“Madelaine Chocolate”) appealed the district court’s judgment following a jury verdict in favor of Great Northern Insurance Company (“Great Northern”) concerning storm-surge damage caused by “Superstorm Sandy” to Madelaine Chocolate’s production facilities.
In Madelaine Chocolate Novelties, Inc., d.b.a. The Madelaine Chocolate Company v. Great Northern Insurance Company, No. 23-212, United States Court of Appeals, Second Circuit (June 20, 2025) affirmed the trial court ruling in favor of the insurer.
BACKGROUND
Great Northern refused to pay the full claim amount and paid Madelaine Chocolate only about $4 million. In disclaiming coverage, Great Northern invoked the Policy’s flood-exclusion provision, which excludes, in relevant part, “loss or damage caused by ....
Failure to Name a Party as an Additional Insured Defeats Claim
Post 5104
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Contract Interpretation is Based on the Clear and Unambiguous Language of the Policy
In Associated Industries Insurance Company, Inc. v. Sentinel Insurance Company, Ltd., No. 23-CV-10400 (MMG), United States District Court, S.D. New York (June 16, 2025) an insurance coverage dispute arising from a personal injury action in New York State Supreme Court.
The underlying action, Eduardo Molina v. Venchi 2, LLC, et al., concerned injuries allegedly resulting from a construction accident at premises owned by Central Area Equities Associates LLC (CAEA) and leased by Venchi 2 LLC with the USDC required to determine who was entitled to a defense from which insurer.
KEY POINTS
Parties Involved:
CAEA is insured by Associated Industries Insurance Company, Inc. ...
Exclusion Establishes that There is No Duty to Defend Off Site Injuries
Post 5103
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Attack by Vicious Dog Excluded
In Foremost Insurance Company, Grand Rapids, Michigan v. Michael B. Steele and Sarah Brown and Kevin Lee Price, Civil Action No. 3:24-CV-00684, United States District Court, M.D. Pennsylvania (June 16, 2025)
Foremost Insurance Company (“Foremost”) sued Michael B. Steele (“Steele”), Sarah Brown (“Brown”), and Kevin Lee Price (“Price”) (collectively, “Defendants”). Foremost sought declaratory relief in the form of a declaration that
1. it owes no insurance coverage to Steele and has no duty to defend or indemnify Steele in an underlying tort action and
2. defense counsel that Foremost has assigned to Steele in the underlying action may withdraw his appearance.
Presently before the Court are two ...
ZIFL Volume 29, Issue 10
The Source for the Insurance Fraud Professional
See the full video at https://lnkd.in/gK_P4-BK and at https://lnkd.in/g2Q7BHBu, and at https://zalma.com/blog and at https://lnkd.in/gjyMWHff.
Zalma’s Insurance Fraud Letter (ZIFL) continues its 29th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma. It is provided FREE to anyone who visits the site at http://zalma.com/zalmas-insurance-fraud-letter-2/ You can read the full issue of the May 15, 2025 issue at http://zalma.com/blog/wp-content/uploads/2025/05/ZIFL-05-15-2025.pdf
This issue contains the following articles about insurance fraud:
Health Care Fraud Trial Results in Murder for Hire of Witness
To Avoid Conviction for Insurance Fraud Defendants Murder Witness
In United States of America v. Louis Age, Jr.; Stanton Guillory; Louis Age, III; Ronald Wilson, Jr., No. 22-30656, United States Court of Appeals, Fifth Circuit (April 25, 2025) the Fifth Circuit dealt with the ...
Professional Health Care Services Exclusion Effective
Post 5073
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This opinion is the recommendation of a Magistrate Judge to the District Court Judge and involves Travelers Casualty Insurance Company and its duty to defend the New Mexico Bone and Joint Institute (NMBJI) and its physicians in a medical negligence lawsuit brought by Tervon Dorsey.
In Travelers Casualty Insurance Company Of America v. New Mexico Bone And Joint Institute, P.C.; American Foundation Of Lower Extremity Surgery And Research, Inc., a New Mexico Corporation; Riley Rampton, DPM; Loren K. Spencer, DPM; Tervon Dorsey, individually; Kimberly Dorsey, individually; and Kate Ferlic as Guardian Ad Litem for K.D. and J.D., minors, No. 2:24-cv-0027 MV/DLM, United States District Court, D. New Mexico (May 8, 2025) the Magistrate Judge Recommended:
Insurance Coverage Dispute:
Travelers issued a Commercial General Liability ...
A Heads I Win, Tails You Lose Story
Post 5062
Posted on April 30, 2025 by Barry Zalma
"This is a Fictionalized True Crime Story of Insurance Fraud that explains why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is designed to help everyone to Understand How Insurance Fraud in America is Costing Everyone who Buys Insurance Thousands of Dollars Every year and Why Insurance Fraud is Safer and More Profitable for the Perpetrators than any Other Crime."
Immigrant Criminals Attempt to Profit From Insurance Fraud
People who commit insurance fraud as a profession do so because it is easy. It requires no capital investment. The risk is low and the profits are high. The ease with which large amounts of money can be made from insurance fraud removes whatever moral hesitation might stop the perpetrator from committing the crime.
The temptation to do everything outside the law was the downfall of the brothers Karamazov. The brothers had escaped prison in the old Soviet Union by immigrating to the United...
