In our last post [here] we discussed a decision from the Oklahoma Supreme Court recognizing a bad faith claim against a workers' compensation insurer. My Damon Key colleague and fellow blogger, Mark Murakami (hawaiioceanlaw.com), informed me of a similar case winding its way through the trial court on Kauai. See Ordonez v. Hawaii Employers Mutual Ins. Co., Civil No. 060138 (Circuit Court for the Fifth Circuit, State of Hawaii). The Pacific Business News reported on the case here in January. The case was also recently reported by the Advocates Research Company.
In Ordonez, the decedent was killed on January 4, 2005, when her all-terrain vehicle, used by her employer to check hiking trails, overturned. Decedent was survived by her indigent mother, a resident of Venezuela. A workers' compensation claim for full dependency benefits was filed on Plaintiff's behalf with Hawaii Employers Mutual Insurance Company (HEMIC).
HEMIC contested the claim and refused payment. After a hearing in January 2006, the Department of Labor and Industrial Relations ordered that full dependency benefits be paid. The Department found HEMIC had delayed making payments for more than a year without reasonable basis for doing so. After payment was made, Plaintiff sued HEMIC for bad faith in its delay in making payments.
After a trial, Findings of Fact and Conclusions of Law were issued on April 9, 2009. The court ruled HEMIC had sufficient information in January 2005 to determine the decedent's death was compensable. The delay in acknowledging the claim was unreasonable and violated established industry standards for good faith and fair dealing. The court further found HEMIC's motivation in denying Plaintiff's claim was to delay payment so the statute of limitations would expire and HEMIC could escape ever making payment. Plaintiff was awarded $75,000 in general damages and $250,000 in punitive damages.
Based on the on-line docket sheet, it appears that judgment has not yet been entered. HEMIC informed the Pacific Business News that it was considering an appeal.
