Mental Anguish Insurance Claims

Fort Worth insurance lawyers need to be able to recognize a claim wherein conduct arises to a level allowing recovery for mental anguish damages. The 1999, Fort Worth Court of Appeals case styled, “Mid-Century v. Foreman” is helpful. Here is some of the relevant information.
Joyce Foreman was involved in a car accident with Karl Buehner. Foreman’s policy included $250,000 in underinsured (UIM) benefits. Foreman settled with Buehner’s insurance for the limits of $20,000. Because of extensive medical bills, Foreman filed an UIM claim with Mid-Century. Fisher, the Mid-Century adjuster, mailed an acknowledgement of the claim and a request for information. Foreman told Fisher that they had previously settled their liability claim and that they had hired a lawyer. As a result, Fisher stopped all contact with Foreman.
Foreman sued Mid-Century to recover contractual and extra-contractual damages. After reviewing Foremans’ medical records, the claim was denied.
Foremans’ claim for UIM benefits was severed and tried separately from the extra-contractual causes of action. In the trial for UIM benefits, the jury awarded $112,287 to Joyce.
The extra-contractual claims were then tried. The Foreman’s focused on Mid-Century’s denial of the claim. The jury found that Mid-Century caused Foreman damages by committing deceptive acts, breached its duty of good faith and fair dealing, and knowingly failed to promptly pay the claim. The jury also found that Mid-Century’s conduct was knowing and intentional. The jury awarded $150,000 to Foreman for mental anguish damages.
This appeals court held that there was no evidence that the insurance company acted “knowingly,” and the judgment was reversed in favor of the insurance company.
The court stated that a culpable mental state is required to recover mental anguish damages. “Knowingly” means an actual awareness of the falsity, unfairness or deception of the act or practice made the basis for the claim. “Actual awareness” may be inferred where objective manifestations indicate that a person acted with actual awareness.
The court stated that “actual awareness” does not mean merely that a person knows what he is doing, but it does mean that a person knows that what he is doing is false, deceptive or unfair.
In this case there is no evidence that Mid-Century knew it was acting falsely, deceptively or unfairly towards the Foremans. Therefore, their mental anguish claim did not stand.