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COA reverses award of attorney fees to couple

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The Indiana Court of Appeals found a trial court erred in awarding attorney fees to a couple that sued their insurer following a car accident. The trial court ruled that GEICO litigated the claim in bad faith.

Cheryl and Jim O’Mailia brought an underinsured motorist claim under their policy with GEICO after Cheryl O’Mailia was injured while riding as a passenger in someone else’s car. A week before trial, GEICO’s attorneys discovered on Florida Department of Public Health’s public website that Jim O’Mailia’s medical license was under investigation based on allegations he forged prescriptions for his wife, referred to as the Florida Information in the court record. He pleaded nolo contendere to violating five counts of Florida law by uttering a forged instrument and entered into a settlement.

GEICO did not alert the O’Mailias of the Florida Information it had found, and apparently the O’Mailias did not tell their counsel about the same. On cross-examination of Jim O’Mailia, the GEICO attorney brought up the Florida Information, leading to an objection by the O’Mailias. The GEICO attorney told the court their attorney did not disclose the information because he did not believe there was any obligation to based on trial rules.

Cheryl O’Mailia received a $125,000 judgment. The trial court denied the O’Mailias’ request for a new trial but awarded attorney fees under Ind. Code 34-52-1-1(b)(3), finding that GEICO litigated the action in bad faith with regard to its decision to not disclose the Florida Information. The court concluded that this failure to disclose ran afoul of Ind. Professional Conduct Rule 8.4(d).

In Geico General Insurance Company v. Laura B. Coyne, Cheryl A. O'Mailia, and James O'Mailia, 20A04-1307-CT-325, GEICO argued that it did not litigate in bad faith, and it points to the fact that it researched whether it had a duty to disclose and decided that there was none. The O’Mailias claimed that GEICO’s focus on the Indiana Trial Rules and Rules of Evidence is misplaced because the court found that GEICO’s counsel’s “actions were a breach of professionalism and courtesy and were prejudicial to the administration of justice.”

Based on the statements by GEICO’s counsel, the appellate court concluded that the decision not to disclose the Florida Information was not borne out of ill will, and was not dishonest or immoral, but instead was strategic in nature and believed to be within the bounds of the law.

“Indeed, the O’Mailias, as well as the court, agreed with the results of GEICO’s research that neither the Trial Rules nor the Rules of Evidence compelled GEICO to disclose the information, nor has case law been uncovered imposing such a duty. We cannot say that such circumstances are indicative of litigating in bad faith,” Judge Elaine Brown wrote.

Judge Michael Barnes concurred, writing, “I do so with some hesitation, though, because I believe that trial by ambush and rabbit-out-of-the-hat moments are not to be favored in our courtrooms.”

 

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  1. Hail to our Constitutional Law Expert in the Executive Office! “What you’re not paying attention to is the fact that I just took an action to change the law,” Obama said.

  2. What is this, the Ind Supreme Court thinking that there is a separation of powers and limited enumerated powers as delegated by a dusty old document? Such eighteen century thinking, so rare and unwanted by the elites in this modern age. Dictate to us, dictate over us, the massess are chanting! George Soros agrees. Time to change with times Ind Supreme Court, says all President Snows. Rule by executive decree is the new black.

  3. I made the same argument before a commission of the Indiana Supreme Court and then to the fedeal district and federal appellate courts. Fell flat. So very glad to read that some judges still beleive that evidentiary foundations matter.

  4. KUDOS to the Indiana Supreme Court for realizing that some bureacracies need to go to the stake. Recall what RWR said: "No government ever voluntarily reduces itself in size. Government programs, once launched, never disappear. Actually, a government bureau is the nearest thing to eternal life we'll ever see on this earth!" NOW ... what next to this rare and inspiring chopping block? Well, the Commission on Gender and Race (but not religion!?!) is way overdue. And some other Board's could be cut with a positive for State and the reputation of the Indiana judiciary.

  5. During a visit where an informant with police wears audio and video, does the video necessary have to show hand to hand transaction of money and narcotics?

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