Causes of Action: UCSPA, Actual damages not include attorney fees (policy language reviewed)

From Excel v. Liberty Mutual, COA, NPO, 5/6/2011

Next, Exel contends the trial court erred by finding that it failed to present evidence to support a finding that Liberty’s actions caused actual damage or injury to Exel. Specifically, Exel alleges it suffered compensable damages in the form of attorney fees in regards to the underlying action, the expenses associated with Exel’s attorney’s time spent assisting Liberty in its defense of Exel, the loss of coverage under its policy with Liberty, and its increased loss experience resulting from Liberty’s settlement with Borden. We disagree.

The goal of compensatory or actual damages is to compensate a plaintiff for injuries and make the plaintiff whole by awarding a monetary amount to equal the wrong by the defendant. Jackson v. Tullar, 285 S.W.3d 290, 297-98 (Ky.App. 2007). Here, Exel’s claims of damages do not specifically allege any compensable injuries to support its claim of bad faith. The insurance policy with Liberty held by Exel contained no provision permitting Exel to recover attorney fees in such an instance. See Glass, 996 S.W.2d at 455 (absent a written agreement or statute, parties are generally not allowed to recover attorney fees) (citation omitted). Further, Exel failed to provide any evidence of the expenses incurred by its general counsel while assisting Liberty in its defense of Exel besides the counsel’s salary paid by Exel, which would have been paid despite Liberty’s actions. In addition, Exel’s claim that it incurred actual injury as a result of its policy limit being exhausted is also without merit. Exel suffered no actual injury as a result of Liberty paying out the policy limit because it defense costs were entirely paid by either Liberty or Great American. Lastly, Exel did not provide any evidence that it suffered an increased loss expectancy or that an increased loss expectancy could be attributed to Liberty’s actions which are alleged to be in bad faith. Accordingly, the trial court did not err by granting Liberty’s motion for summary judgment.