Carter v. Old American Ins. Co.

Brenda Carter sought damages from Old American Insurance Company ("insurance company") based on breach of contract, fraud in the inception, and bad faith refusal to pay insurance proceeds. Ms. Carter dismissed her fraud count with prejudice and her contract count without prejudice. The insurance company denied the allegations of the bad faith count and asserted as a further defense the unconstitutionality of punitive damages in Alabama in general, and in particular insofar as such damages are permitted in Alabama for the violation of a covenant of good faith and fair dealing only in contracts…