APRIL 2006 BAD FAITH CASES
STAY OF EXECUTION ON PUNITIVE DAMAGES AWARD ON BAD FAITH CLAIM GRANTED, ON CONDITION THAT A $5.825 MILLION BOND WAS POSTED (Western District)

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In Gallatin Fuels v. Westchester Fire Insurance Company, defendant filed a Motion for Stay of Execution of Judgment in response to the earlier judgment in favor of Plaintiff in the amount of $1.325 million on plaintiff’s breach of contract claim and $4.5 million in the form of punitive damages on plaintiff’s bad faith claim.

The U.S. District Court for the Western District of Pennsylvania granted the motion in part and denied it in part. Defendant moved under the proper vehicle for a stay of execution of the judgment, Rule 62(b) of the Federal Rules of Civil Procedure, which requires the court to take into account “the security of the adverse party.” After due consideration, the court found that it would be unfair to plaintiff to grant a stay of execution without requiring defendant to post a bond; therefore, defendant’s motion for stay was granted on the condition that defendant post a bond in the amount of $5.825 million, the amount of the judgment, within two days, while the motion was denied in all other respects.

Date of Decision:  April 12, 2006

Gallatin Fuels v. Westchester Fire Ins. Co., United States District Court of the Western District of Pennsylvania, Civil Action No. 02CV2116, 2006 U.S. Dist. LEXIS 22144 (W.D. Pa. April 12, 2006) (Ambrose, C.J.)

This case was affirmed in part and reversed in part on appeal by the U. S. Court of Appeal for the Third Circuit.

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STAY OF EXECUTION ON PUNITIVE DAMAGES AWARD ON BAD FAITH CLAIM GRANTED, ON CONDITION THAT A $5.825 MILLION BOND WAS POSTED (Western District)”


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