Victaulic Co. v. American Home Assurance Co.Annotate this Case
Victaulic, a manufacturer, sued its insurers in connection with product liability claims that resulted in litigation. Following summary adjudication for Victaulic (duty to defend) and a declaratory ruling (duty to indemnify), the case proceeded to a jury trial on Victaulic’s bad faith claim. Numerous witnesses testified and over 100 exhibits were introduced. Reversing an in limine ruling, the court allowed Victaulic to interrogate Finberg, the examiner on most of the claims, who had verified the insurers’ responses to Victaulic’s requests for admissions (RFAs). The court concluded Finberg “made an admission that she perjured herself” and stopped Finberg’s testimony. When she resumed the stand the next day, represented by personal counsel, the court ruled that she could, on a blanket basis, claim the Fifth Amendment privilege against self-incrimination— in front of jury. Victaulic’s closing arguments focused on “Finberg,” “RFAs,” “lies,” and “penalty of perjury.” The jury awarded damages for breach of contract totaling $1,073,868.80, with attorney fee damages for bad faith of $8,259,712.31. The punitive damages trial resulted in an award of $46 million. The court of appeal reversed, finding prejudicial errors, beginning with the court’s allowance of the use of the RFA responses, compounded by the court’s intensive questioning of Finberg, and by several errors in handling Finberg’s invocation of the Fifth Amendment.