ORDER

On February 13, 2001, the parties came, in person, by representative, and by counsel, for trial of this matter. All parties were ready for trial with no preliminary motions. Each party objected to the seating of a juror and requested the juror be struck for cause. The objections were overruled and each party used a preemptory strike for the juror to which it objected. Thereafter, the jury was duly empanelled without further objection, opening statements were given by counsel for all parties, and evidence was presented on behalf of the plaintiff. Court adjourned until 10:00 a.m. on February 14, 2001.

On February 14, 2001, the parties again came before the Court, in person, by representative, and by counsel, along with the jury, for consideration of additional evidence. During the course of plaintiff's case in chief, plaintiff proffered evidence of plaintiff's consequential damages to which defendant objected on the ground that the policy excluded consequential damages. The Court denied admission of this evidence before the jury at this time and took the matter under advisement. At the close of the plaintiff's case, counsel for the defendant made a motion to strike both counts of plaintiff's case, which the Court denied after consideration of argument by counsel. Thereafter, evidence was presented on behalf of the defendant. Court adjourned until 11:00 a.m. on February 15, 2001.

On February 15, 2001, the parties again came before the Court, in person, by representative, and by counsel, along with the jury, for consideration of additional evidence. At the conclusion of the defendant's case, defendant renewed its prior motion to strike and moved for summary judgment in its favor on all counts, which motions were denied after argument thereon by counsel. The plaintiff then presented rebuttal evidence. Subsequently, the Court ruled that:

1. if the jury determined that Allstate breached its contract of insurance and if the Court determined Allstate acted in bad faith in failing to pay under the contract, then the plaintiff was entitled to present evidence of consequential damages despite the contract's provision excluding consequential damages;

2. the question of whether certain types of damage were properly classifiable as consequential damages was an issue for the Court to decide; and

3. the question of whether consequential damages were foreseeable was an issue for the jury to decide.

All parties having rested their cases and the parties having agreed on the form of the jury instructions, subject to counsel for the defendant's objection thereto on the grounds previously argued in support of defendant's motions to strike and motion for summary judgment, the Court instructed the jury, counsel made their closing arguments, and the jury retired for deliberations, carrying with them to the jury room the exhibits admitted into evidence and the instructions. While the jury was deliberating, plaintiff moved for leave to increase its ad damnum clause on Count I to $57,000 to conform with the evidence. The defendant objected, and the Court denied plaintiff's motion.

During their deliberations, the jury requested a dictionary and asked the Court how to interpret one of the exhibits. The Court, after consulting counsel for the parties, declined both requests and instructed the jury to give words their ordinary meaning and to use their common sense and recall of the testimony to aid their interpretation of the exhibit. After completing their deliberations, the jury returned to the courtroom and delivered their verdicts as follows:

We, the jury, on the issues joined as to Count I, find as follows:

We find in favor of the plaintiff, Karen K. Farrow and award her compensatory damages in the amount of $57,000.

/s/ Andrea Lawrence

Foreperson

We, the jury, on the issues joined as to Count II, find as follows:

We find in favor of the plaintiff, Karen K. Farrow, and award her compensatory damages in the amount of $50,000 and punitive damages in the amount of $250,000.

/s/ Andrea Lawrence

Foreperson

The jury confirmed this as their verdict in open Court, and upon motion of the defendant, they were polled and each juror individually confirmed the verdict in open Court. The jury again retired. Defendant moved to remit the damages on the contract claim to $45,000, the amount of the ad damnum, which motion was granted over the objection of the plaintiff. Defendant moved the Court for a judgment notwithstanding the verdict on all counts, or in the alternative, for a new trial on all issues, both of which were denied. Defendant moved to remit the amount of damages on Count II in light of the small amount of medical bills and to remit the amount of punitive damages in light of the evidence, both of which motions were denied. Defendant's objections to the Court's rulings on these motions were noted and preserved.

The Court then ruled that, pursuant to Va. Code § 38.2-209 and under the standards set forth in CUNA Mutual Insurance Soc. v. Norman, 237 Va. 33 (1989), the defendant acted in bad faith when it failed to pay plaintiff's claim, and that as a consequence it would take evidence of attorneys' fees and of consequential damages. Defendant objected, the Court overruled the objection and noted its exception. The Court ruled it would accept evidence not only of plaintiff's trial counsel's fees, but also of the fees of the attorney who represented her prior to the commencement of litigation, finding that in light of the punitive and remedial nature of the statute, the award of pre-litigation attorneys' fees would function to discourage insurance companies from further misconduct. Upon consideration of the evidence as to attorneys' fees and costs, the Court further finds that plaintiff has incurred attorneys' fees and costs in the amount of $46,772.00 and $1,262.79, respectively, finds that amount to be reasonable, and awards that amount to plaintiff pursuant to Va. Code § 38.2-209, all to which Defendant objected. In view of the Court's ruling on the ad damnum clause and the fact that the award of plaintiff's direct damages already exceeded that amount, plaintiff declined to present further evidence of consequential damages. On plaintiff's motion, judgment was then entered on the verdict and counsel for plaintiff was instructed to prepare an order reflecting the Court's ruling. The jury was then discharged.

Accordingly, it is hereby ORDERED that judgment be entered in favor of the plaintiff, Karen K. Farrow, against the defendant Allstate Indemnity Company in the amount of THREE HUNDRED FORTY FIVE THOUSAND AND 00/100 DOLLARS ($345,000.00) plus $46,772.00 for attorneys' fees and $1,262.79 for costs, together with interest thereon at the judgment rate from February 15, 2001, and for an award of her taxable costs.

Nothing further remaining to be done herein, it is hereby ORDERED that this case be stricken from the docket and placed among the ended causes.

The Clerk is requested to mail a true copy teste of this order to counsel of record.

ENTER: / /

________________________________

Circuit Court Judge

WE ASK FOR THIS:

________________________________

Christopher M. Malone

Kimberly A. Taylor

Thompson & McMullan, PC

100 Shockoe Slip, 3rd Floor

Richmond, Virginia 23219

(804) 649-7545

Fax: (804) 780-1813

Counsel for Karen Farrow

SEEN AND OBJECTED TO:

___________________________

E. Lewis Kincer, Jr.

Eure Kincer, P.C.

1111 E. Main Street

Richmond, Virginia 23219

(804) 649-4000

Fax: (804) 649-1899

Counsel for Allstate Indemnity Co.