Court of Appeals upholds $14.5 million defamation verdict against State Farm in hail fight
The largest defamation verdict in Indiana history — more than $14.5 million awarded to a contractor who claimed State Farm Fire & Casualty ruined his business and reputation — has been upheld by the Indiana Court of Appeals.
In a decision issued Tuesday, the three-judge panel found Hamilton Superior Court Judge Steven R. Nation correctly denied the insurance giant’s request for a new trial based on a claim that roofing contractor Joseph Radcliff obtained the judgment through fraud on the court.
The case grew out of a 2006 storm that battered Central Indiana with golf-ball-size hail and ravaged thousands of homes. The damage tally topped $1 billion, with State Farm alone paying out more than $200 million on about 50,000 damage claims.
The payout to Radcliff, however, was not the result of damage to homes or cars — but for what a Hamilton County jury determined was damage State Farm did to the roofing contractor’s reputation.
These cases are becoming so commonplace, I’ve taken to calling them the “second appeal”. Here’s the way they work.
The defendant loses in the trial court, then they lose on appeal, so they bring their own action or motion back in the trial court, claiming the original verdict was achieved by a “fraud on the court”, usually based on some evidence the defendant claims would have resulted in a different result.
There is support for such case, but the circumstances for a successful fraud on the court claim are extremely narrow. Here, the insurance company claimed that after the trial, it obtained a declaration from a witness who said the plaintiff had lied and withheld evidence. That approach won’t fly. Courts want finality to their verdicts, and that is evidence that could have been presented in the original trial. A defendant does not get to call a “Mulligan” because it failed to vigorously defend the case the first time around.
In one of my cases, a plaintiff sued my client and we counter-sued. In the end, we obtained a large judgment, and just as in this case, the plaintiff appealed and lost. The plaintiff then brought an action for fraud on the court, claiming the entire matter had been covered by an arbitration agreement, and that we had “defrauded” the court by allowing it to enter a judgement, knowing the matter was subject to arbitration. You read right. The plaintiff brought the action under an agreement that contained an arbitration clause, and then claimed that we had defrauded the court by not invoking the arbitration requirement. The case was thrown out on demurrer.