Federal Kemper Insurance Co. v. Hornback

STEPHENSON, Justice.

The trial court entered judgment against Federal Kemper Insurance Company, imposing punitive damages for bad faith refusal to settle a fire loss with its policyholder. The Court of Appeals affirmed. We granted discretionary review and reverse.

The Hornbacks’ fire insurance policy with Federal Kemper was raised from $6,000 to $30,000. Thirty-five days later, the house burned. The evidence clearly showed that the fire was set. As stated by the Court of Appeals, there was little evidence that the Hornbacks set the fire. However, there was clearly a jury issue presented which…