Textron Financial Corp. v. National Union Fire Ins. Co. (2004) 118 Cal.App.4th 1061

Horvitz & Levy LLP represented National Union in this matter, which was before the Court of Appeal on remand from the U.S. Supreme Court (the second such remand), with instructions to reconsider the punitive damage award in light of State Farm Mut. Auto Ins. Co. v. Campbell, (2003) 538 U.S. 408 [123 S.Ct. 1513, 155 L.Ed.2d 583].

The Court of Appeal had twice previously affirmed the $1.7 million punitive damage award, but this time the court held that, under Campbell and Diamond Woodworks, Inc. v. Argonaut Insurance Co. (2003) 109 Cal.App.4th 1020, the award was excessive. The court reduced the award to $360,000, roughly four times the compensatory tort damages. The court agreed with National Union that, in assessing the ratio, the punitives should be compared with the tort damages only, not the contract damages.

The court also held National Union, who paid the judgment under threat of execution in 2001, was entitled to recoup not only the now-reversed portion of the punitive damage award but also interest on that portion. (Click to see the Court of Appeal's Textron decision.)

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