Insurance Company is Hit With Punitive Damage Award After Refusing to Settle Personal Injury Case

In Anderson et al. v. American International Group, Inc. et al., a Superior Court judge found the insurance company AIG liable for treble damages and attorney’s fees under chapters 93A and 176D after it refused to settle a case in which the liability of its insured, the driver of a shuttle bus, was clear. The plaintiff had received severe personal injuries including brain damage, after being struck by the bus. The judge determined that the insurance company committed unfair claims settlement practices by, among other things, failing to conduct a reasonable investigation based on all available evidence; by relying on a defense to the claim that relied on fictitious evidence; and by failing to promptly settle the plaintiff’s claim once liability had become reasonably clear. The judge rejected AIG’s position that the jury’s determination that the plaintiff was comparatively negligent for the accident demonstrated that liability was not reasonably clear, because he concluded that the comparative negligence finding was the result of AIG and its defense counsel’s misconduct.