Holy Trinity Greek Orthodox Church v. Church Mut. Ins. Co., 2007 WL 706960 (D.Ariz., 2007) involves insurance claims made by the plaintiff Holy Trinity after a water pipe broke at Holy Trinity's education center. The defendant, Church Mutual, provided Holy Trinity with first-party property insurance coverage, and Holy Trinity alleged claims of bad faith and breach of covenant of good faith and fair dealing against Church Mutual.

 

Church Mutual moved for partial summary judgment on the punitive damages claim , arguing that there was “simply no basis given the facts of this case to find that Church Mutual was guided by evil motives or willful or wanton disregard of the interests of its insured“.

 

Church Mutual argues that it is entitled to summary judgment as to Holy Trinity's punitive damages claim because Holy Trinity was unable to establish that Church Mutual acted with the requisite intent to substantiate such a claim. Church Mutual contended that even if its conduct in allegedly failing to give as much consideration to the interests of its insured, Holy Trinity, as it gave to its own interests supports a cause of action for bad faith, this conduct itself remains insufficient for a punitive award.

According to the court, Arizona law dictated that in a bad faith tort case against an insurance company, punitive damages may only be awarded if the evidence reflects something more than the conduct necessary to establish the tort.

 

The court concluded that despite the fact that the parties in this case had a bona fide dispute as to the amount of Holy Trinity's water damage claim, such a dispute did not automatically give rise to a claim of punitive damages.

 

To establish a claim for punitive damages, the court explained, plaintiff must demonstrate by clear and convincing evidence that the defendant acted with the requisite evil mind. Here, Holy Trinity was unable to do so, as the evidence did not support a showing that Church Mutual (1) intended to cause injury; (2) engaged in wrongful conduct motivated by spite or ill will; or (3) acted to serve its own interests, having reason to know and consciously disregarding a substantial risk that its conduct might significantly injure the rights of others, even though defendant had neither desire nor motive to injure.

 

The court concluded that Church Mutual did not act with the requisite evil mind to support a punitive damages award in adjusting the claim. Therefore, the court granted Church Mutual's motion for partial summary judgment as to punitive damages.