Riordan v. Nationwide Mut. Fire Ins. Co., 977 F. 2d 47 - Court of Appeals, 2nd Circuit 1992

Defendant-appellant Nationwide Mutual Fire Insurance Company appeals from a judgment entered on January 15, 1992 after a jury trial in the United States District Court for the Southern District of New York (Brieant, Ch. J.), awarding a total of $349,304.34 in damages and $174,652.17 in attorney\u27s fees to plaintiffs-appellees John Riordan and Jane Fox (the Riordans ). The Riordans, a married couple, commenced this action after their house and its contents suffered severe damage as a result of a fire. The Riordans initially made a claim under their homeowners insurance policy with Nationwide. After six months elapsed without settlement of their claim, the Riordans brought this action, alleging that Nationwide breached the insurance contract and committed deceptive acts and practices in violation of N.Y.Gen.Bus.Law § 349 (McKinney 1988) ( GBL § 349 ). The Riordans sought compensatory, statutory and punitive damages as well as the attorney\u27s fees permitted by GBL § 349(h). At the close of trial, the jury returned a verdict in favor of the Riordans, awarding compensatory and punitive damages in addition to damages under GBL § 349. The district court then approved an attorney\u27s fees award. On appeal, Nationwide asserts a variety of errors. Its principal contentions relate to the applicability of GBL § 349 to the insurance industry, the availability of attorney\u27s fees in this case, the availability of punitive damages in a first party action against an insurance company, and the sufficiency of the evidence adduced at trial supporting the GBL § 349 and punitive damages awards. Nationwide also seeks certification of certain questions to the New York Court of Appeals, contending that New York law on those issues is not settled and that therefore New York\u27s highest court must resolve the issues before they can be litigated in this diversity suit. We hold GBL § 349 applicable to insurance companies\u27 interactions with insureds and that sufficient evidence supported the damages awarded under that section. We also reject Nationwide\u27s arguments that the Riordans\u27 attorneys were required to submit contemporaneous time records and that the district court abused its discretion in awarding attorney\u27s fees pursuant to GBL § 349. We certify questions regarding the availability of punitive damages in this case to resolve a split of authority between Appellate Division Departments on this issue