In Michigan First Credit Union v. CUMIS Insurance Society, Inc.pdf, Nos. 09-1925/1970 (6th Cir. May 24, 2011), the Sixth Circuit affirmed a $5 million + jury verdict arising from an insurer’s refusal to pay under a fidelity bond where the insured’s employees approved scores of bad loans in alleged “conscious disregard” of the insured’s policy. Following the jury’s verdict and the district court’s award of $2,730,415 in interest, the insurer moved for judgment as a matter of law (“JMOL”) and for a new trial. An appeal followed the district court’s denial of these motions.
On appeal, the Sixth Circuit affirmed the denial of the insurer’s motion for JMOL and rejected its challenge to the jury’s findings that the insured established and enforced its lending policy, the insured’s employees consciously disregarded that policy, and the insured did not acquiesce in the malfeasance.
The Court also rejected the insurer’s argument that the cumulative effect of several arguably minor errors deprived it of a fair trial. In doing so, the Court discounted its claims that the insured’s use of a “golden rule” argument in closing and the district court’s admission of evidence about the insured’s approval of the subject lending policy warranted a new trial.
Finally, the Court rejected the insured’s claim that the district court’s award of penalty interest should not have been offset by the award of prejudgment interest.
The Michigan First decision comes on the heels of the Court’s decision in Ventas, Inc. v. HCP, Inc. (6th Cir., Nos. 09-6385/6413, May 17, 2011) and is the second decision in a week affirming a very substantial judgment.