JUNE 2006 BAD FAITH CASES STAY OF EXECUTION OF JUDGMENT PENDING APPEAL – DEFENDANT MUST POST BOND FOR ENTIRE JUDGMENT (Western District)

In Gallatin Fuels, Inc. v. Westchester Fire Ins. Co., defendant insurance company filed a motion to stay execution of judgment pending appeal, after the jury found that the company lacked a reasonable basis for denying benefits to plaintiff and awarded $20 million in punitive damages on the bad faith claim.  This award was thereafter reduced by the trial court to $4.5 Million. The company sought to stay execution of the judgment without posting a bond for the entire judgment. The company argued that the bond it posted during the post-trial motions was sufficient. The trial court disagreed, and held that the company must post a bond representing the full amount of the judgment.  The trial court concluded that the stay would become effective when the entire judgment was posted.

Date of decision:  June 13, 2006

Gallatin Fuels, Inc. v. Westchester Fire Ins. Co., United Stated District Court for the Western District of PA, No. 02-2116, 2006 U.S. Dist. LEXIS 38990 (W.D. Pa. June 13, 2006) (Ambrose, C. J.)