Robert Jacobsen, Plaintiff, Appellee and Cross-Appellant v. Allstate Insurance Company, Defendant and Appellant

Summary

The Court held that a third-party claimant may not recover attorney fees or settlement costs as damages in a common-law or statutory insurance bad-faith action absent an applicable exception to the American Rule. It upheld the rulings concerning advance-pay evidence, punitive-damages submission, jury instructions, and the rescinded release, but required production of the McKinsey documents and held that serious-or-severe emotional distress is not a threshold requirement for parasitic emotional-distress damages. The Court therefore reversed the compensatory and punitive awards and remanded for a new trial. Justice Cotter, joined by Justice Nelson, would have allowed the attorney-fee recovery, while Justice Rice would have found additional trial errors concerning advance-pay evidence, jury instructions, and the release.