James River Ins. Co. v. Rapid Funding, LLC, No. 10-1145 (10th Cir. 2011)
Annotate this CaseThis case stems from a fire that destroyed a Michigan apartment building. The owner, Rapid Funding, LLC (a Colorado company), submitted a claim to its insurer James River Insurance Company (an Ohio company). James River denied the claim because it determined that the building's pre-fire value was less than zero. Rapid Funding sued in Colorado federal district court for breach of contract and insurance bad faith and received the full $3 million amount of the policy plus $2.35 million in punitive damages. James River argued on appeal that the damages verdict was based on valuation testimony that should have been excluded at trial. Upon review of the applicable legal authority and briefs submitted by the parties, the Tenth Circuit held that the valuation testimony was erroneously admitted, and the error was not harmless. The Court reversed and remanded the case for a new trial limited to the damages issue.
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