Riordan v. Nationwide Mut. Fire Ins. Co.
| Decision Date | 21 January 1993 |
| Docket Number | D,No. 1793,1793 |
| Parties | John W. RIORDAN; Jane Fox, Plaintiffs-Appellees, v. NATIONWIDE MUTUAL FIRE INSURANCE COMPANY, Defendant-Appellant. ocket 92-7160. |
| Court | U.S. Court of Appeals — Second Circuit |
Neil A. Goldberg, Buffalo, NY (Lawrence A. Schulz, Richard J. Cohen, Saperston & Day, of counsel) for defendant-appellant.
Jonathan J. Wilkofsky, New York City (Mark L. Friedman, David B. Karel, Wilkofsky, Friedman, Karel & Cummins, of counsel) for plaintiffs-appellees.
Before WINTER, MINER and McLAUGHLIN, Circuit Judges.
Defendant Nationwide Mutual Fire Insurance Company appealed from a judgment entered on January 15, 1992 after a jury trial in the United States District Court for the Southern District of New York (Brieant, Ch.J.) awarding a total of $349,304.34 in damages, including $150,000 for punitive damages, and $174,652.17 in attorney's fees to plaintiffs John Riordan and Jane Fox. Nationwide argued, inter alia, that N.Y.Ins.Law § 2601, providing the Commissioner of Insurance with a range of administrative remedies, preempted a private claim for punitive damages against an insurance company; that N.Y.Gen.Bus.Law § 349(h) did not apply to transactions between insurance companies and their insureds; and that the district court abused its discretion by awarding attorney's fees equal to one-half the judgement awarded. On October 2, 1992, we affirmed the judgment of the district court in all respects, except as to the punitive damages issue. See Riordan v. Nationwide Mut. Fire Ins. Co., 977 F.2d 47 (2d Cir.1992).
Because the issue of the applicability of N.Y.Ins.Law § 2601 to punitive damage awards against insurance companies directly implicated a strong public policy interest of New York and because a split of authority existed between at least two Appellate Division Departments, we certified the following two questions to the New York Court of Appeals:
1. Does Ins.Law § 2601 preempt the common law right to punitive damages in private lawsuits premised on unfair claim practices in breach of an insurance contract?
2. If Ins.Law § 2601 does not preempt the common law right to punitive damages, must the insured, in order to recover punitive damages, prove that the insurer engaged in morally reprehensible conduct aimed at the general public such that anyone doing business with the insurer could be exposed to the conduct?
Id. at 56-57. The New York Court of Appeals has not yet decided whether to accept the certified questions.
Subsequent to our submission of these certified questions, Nationwide tendered, and the plaintiffs accepted, the full amount of the judgment, plus interest, costs and disbursements. A...
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