JUNE 2006 BAD FAITH CASES
STAY OF EXECUTION OF JUDGMENT PENDING APPEAL – DEFENDANT MUST POST BOND FOR ENTIRE JUDGMENT (Western District)

Defendant insurance company filed a motion to stay execution of judgment pending appeal, after the jury found that the company lacked a reasonable basis for denying benefits to plaintiff and awarded $20 million in punitive damages on the bad faith claim.  This award was thereafter reduced by the trial court to $4.5 Million.

The company sought to stay execution of the judgment without posting a bond for the entire judgment. The company argued that the bond it posted during the post-trial motions was sufficient. The trial court disagreed, and held that the company must post a bond representing the full amount of the judgment.  The trial court concluded that the stay would become effective when the entire judgment was posted.

Date of decision:  June 13, 2006

Gallatin Fuels, Inc. v. Westchester Fire Ins. Co., United Stated District Court for the Western District of PA, No. 02-2116, 2006 U.S. Dist. LEXIS 38990 (W.D. Pa. June 13, 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.