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Bankers Life & Casualty Co. v. Crenshaw

United States Supreme Court
486 U.S. 71 (1988)


Lloyd Crenshaw (plaintiff) accidentally dropped a car alternator on his foot while performing work on a workbench. After attempting to treat the wound himself, he visited a local hospital and, after several visits, was diagnosed with a condition requiring amputation below the knee. After his amputation, Crenshaw made a claim with his insurer, Bankers Life & Casualty (defendant) for $20,000, the amount allowed by the policy. Bankers denied the claim, stating that Crenshaw’s amputation was caused by a pre-existing condition and not the incident with the alternator. Crenshaw contested this claim, corresponding with Bankers extensively. After several months, Crenshaw sued Bankers in Mississippi state court, seeking $20,000 in actual damages and $1,635,000 in punitive damages for the tort of bad-faith refusal to pay an insurance claim. The jury found for Crenshaw and awarded $20,000 in actual damages and $1.6 million in punitive damages. Bankers appealed to the Mississippi Supreme Court, which affirmed the jury verdict in its entirety. Bankers then filed a motion for rehearing, arguing for the first time “[t]he punitive damage verdict . . . constitutes excessive fine [sic], and violates constitutional principles.” The Mississippi Supreme Court denied the petition for rehearing. Bankers appealed to the United States Supreme Court.

Rule of Law


Holding and Reasoning (Marshall, J.)

Concurrence (White, J.)

Concurrence (O’Connor, J.)

Concurrence (Scalia, J.)

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