Indiana Court of Appeals Affirms Huge Award Against

April 11, 2013

April 11, 2013
By Gregory M. Gotwald, PSRB Partner

The Indiana Court of Appeals today affirmed what it says is one of the
largest defamation awards in U.S. history.  The court says in its decision
in  State Farm Fire & Casualty Company v. Joseph Martin Radcliff and
Coastal Property Management LLC, a/k/a CPM Construction of Indiana that
State Farm should pay damages of $14.5 million to Joseph Radcliff and his
company Coastal Property Management LLC after finding the insurance
company could not prove its arguments on appeal.

A lawsuit from State Farm and a counterclaim of defamation came in the
wake of State Farm denials of homeowner claims for hail damage in Indiana
that occurred in April of 2006.  Radcliff had formed a company to repair
the storm-damaged homes.  State Farm Fire & Casualty Company began denying
many of the policyholders’ claims even though other companies were
covering similar damage.  Radcliff and his company began to help
homeowners fight State Farm for coverage.  State Farm then launched an
insurance-fraud investigation into Radcliff and his company that led to
Radcliff’s arrest on 14 felony counts.  The charges were eventually
dismissed pursuant to a diversion agreement with the State.  State Farm
then sued Radcliff and his company for racketeering, prompting the
defamation counterclaim.  A Hamilton County jury awarded Radcliff and
Coastal Property Management the $14.5 million in 2011.

The Court of Appeals upheld the jury’s award.  In doing so, it disagreed
with State Farm’s three arguments on appeal that: (1) Radcliff failed to
prove actual malice by clear and convincing evidence, (2) State Farm was
entitled to a new trial on damages and (3) the public interest privilege
for crime reporting and statutory immunity should have protected State
Farm’s communications with the National Insurance Crime Bureau and the
Indianapolis Metropolitan Police Department.

If you have any questions about the decision, please contact Greg Gotwald.
Plews Shadley Racher & Braun LLP is recognized as a national leader in
establishing the rights of policyholders in a variety of insurance cases.

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