Mitch Stooksbury vs. American National Property

Mitch and Gina Stooksbury ("Plaintiffs") purchased homeowners insurance from American National Property and Casualty Company ("Defendant"). After Plaintiffs' home was destroyed by fire, they were informed by Defendant that their insurance policy had been cancelled prior to the date of loss because of an underwriting risk arising from missing railing on a deck. Defendant claimed to have mailed a cancellation notice and refund check to Plaintiffs in accordance with the terms of the policy. Plaintiffs denied receiving the cancellation notice or refund check. A jury concluded Defendant failed to prove by a preponderance of the evidence that it mailed the cancellation notice to Plaintiffs. The jury also concluded Defendant acted unfairly and in bad faith, and that Defendant's failure to pay the loss was through fraudulent and deceptive practices. The Trial Court entered a judgment for Plaintiffs in the amount of $92,750, for damages pursuant to the insurance contract, plus prejudgment interest on that $92,750. The Trial Court also assessed a 25% bad faith penalty and an additional 5% for punitive damages. Both parties appeal. We affirm the judgment for Plaintiffs in the amount of $92,750 and the prejudgment interest awarded on that $92,750. The bad faith penalty and award of punitive damages is reversed.