George and Betty Lorenz, Cross-Appellants v. Valley Forge Insurance Company, Cross-Appellee

BAUER, Chief Judge.

This is a diversity action, tried before a federal magistrate pursuant to 28 U.S.C. § 636(c). The original case ended in a mistrial when it became necessary for the plaintiffs’ attorney to testify in. the case. After the second trial, the jury found that the defendant, Valley Forge Insurance Company (“Valley Forge”), had denied plaintiffs’, George and Betty Lorenz (“Lor-enzes”), insurance claim in bad faith. Judgment was entered against Valley Forge for $9,494.90 in compensatory damages 1 and $250,000 in punitive damages. On appeal the defendants allege (1) that the…