May 28, 2009

Rehearing Denied in Leeper-Johnson

The California Court of Appeal (Fourth District, Division One) has issued an order denying the defendant's petition for rehearing in Leeper-Johnson v. Prudential, a case we previously blogged about.

Although the court denied rehearing, it modified its opinion. The modification makes clear that, when calculating the ratio of punitive damages to compensatory damages in an insurance bad faith case, the court should consider only the tort damages (not contract damages, such as unpaid policy benefits). This modification follows the approach of other California opinions such as Textron Financial v. National Union and Major v. Western Home.