Filed 5/17/19

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION TWO

MICHAEL MAZIK,

Plaintiff and Respondent,

v.

GEICO GENERAL INSURANCE 

COMPANY,

Defendant and Appellant.

B281372

(Los Angeles County

Super. Ct. No. BC544968)

APPEAL from a judgment of the Superior Court of 

Los Angeles County. Richard E. Rico, Judge. Affirmed.

Sheppard, Mullin, Richter & Hampton, John T. Brooks and 

Karin Dougan Vogel for Defendant and Appellant.

Pine Tillett Pine, Norman Pine, Chaya M. Citrin; Alder 

Law, Michael Alder, Lauri L. Brenner; and Michael H. Silvers for 

Plaintiff and Respondent.

_________________________________
2

GEICO General Insurance Company (GEICO) appeals from 

a judgment against it awarding punitive damages to respondent 

Michael Mazik for GEICO’s bad faith breach of an insurance 

contract. A jury concluded that GEICO unreasonably delayed 

paying its policyholder Mazik the policy limits of $50,000 on an 

underinsured motorist policy after Mazik was injured in a serious 

automobile accident. The jury awarded compensatory damages of 

$313,508 and punitive damages in the amount of $4 million. The 

trial court subsequently reduced the punitive damages to 

$1 million.

GEICO appeals only the punitive damages award. It 

argues that (1) the evidence is insufficient to show that any 

“officer, director, or managing agent” was involved in any act of 

bad faith (Civ. Code, § 3294, subd. (b));1 (2) even if a managing 

agent was involved, the evidence is insufficient to show that such 

an agent personally engaged in “oppression, fraud, or malice,” or 

authorized or ratified such conduct by other employees, as 

required to support a punitive damages award (ibid.); and (3) the 

punitive damages award was excessive, even as reduced by the 

trial court.

We reject GEICO’s arguments and affirm. There is

sufficient evidence in the record to show that GEICO’s managing 

agent ratified conduct warranting punitive damages. In 

concluding that Mazik’s claim was worth far less than the policy 

limits, GEICO disregarded information provided by Mazik 

showing that he had a permanent, painful injury, and instead 

 

1 Subsequent undesignated statutory references are to the 

Civil Code.
3

selectively relied on portions of medical records that supported 

GEICO’s position that Mazik had fully recovered. As reduced by 

the trial court, the $1 million in punitive damages (approximately 

three times the amount of compensatory damages) is within the 

constitutionally permitted range in view of the degree of 

reprehensibility of GEICO’s conduct.

BACKGROUND

1. Mazik’s Accident and Treatment

On August 11, 2008, Mazik was involved in a serious 

automobile accident on a highway in Riverside County. While 

driving about 45 to 50 miles per hour, he collided head-on with 

another car that was in his lane driving about the same speed. 

The other driver, who had crossed over double yellow lines in his 

attempt to pass slower traffic, was killed.

Mazik received initial treatment at the Riverside County 

Regional Medical Center. Along with lacerations and abrasions, 

he was diagnosed with a “[g]rossly comminuted fracture of the 

left calcaneus,” i.e., heel bone.

Mazik sought subsequent treatment at the Idyllwild Health 

Center and from Dr. Barry Grames with the San Bernardino 

Medical Orthopedics Group. He also received physical therapy.

Dr. Grames confirmed the diagnosis of a severely

comminuted fracture to the left calcaneus. Dr. Grames treated 

the fracture as “nonoperative” due to the “severe soft tissue 

swelling and severe comminution” of the fracture. In early 

December 2008, nearly eight months after the accident, Dr. 

Grames concluded that Mazik “may have chronic pain and 

discomfort and may require a subtalar fusion.” Dr. Grames saw 

Mazik periodically from August 20, 2008, through June 30, 2009.

Dr. Grames’s final report stated that Mazik “is overall 

doing quite well.” However, he also reported that Mazik still had 
4

pain of “3–4 on a pain scale of 1 to 10,” and had “very limited 

range of motion of the hind foot and subtalar joint.” With respect 

to work status, Mazik was still “temporarily totally disabled.” Dr. 

Grames concluded that, if Mazik has “increasing pain or 

discomfort, he may be a candidate for a subtalar joint effusion in 

the future.”

Mazik again sought medical treatment in January 2012 

from Dr. Bobby Yee. The treatment was prompted by “problems 

walking and working due to the pain” in his left heel. Dr. Yee 

reported that Mazik had a severely restricted range of motion and 

arthritis in his ankle.

2. Mazik’s Injuries

Mazik’s medical expert at trial, Dr. Jacob Tauber, described 

the injury to Mazik’s heel as “devastating.” He explained that the 

“reason it hurts so much, is you not only have the deformity of the 

bone, but you’ve destroyed the joint between the ankle bone, the 

talus, and the heel bone, the calcaneus.” Dr. Tauber testified that 

he had reviewed X-rays and CAT scan records of Mazik’s injury, 

and they showed that Mazik’s bone had “literally exploded.” He 

testified that the severe nature of Mazik’s injury was apparent 

from his doctors’ diagnoses “right from the beginning.” He 

explained that the diagnosis of a “comminuted” fracture was a 

“fancy orthopedic word for many pieces.”

Dr. Tauber further explained that surgery was not a good 

option for Mazik because Mazik’s bone had “burst into too many 

pieces.” The best option was the treatment that Mazik had 

received, which was to splint him until the fracture healed in 

“whatever deformed state” and consider a fusion in the future if 

“you can’t take the pain.” He testified it was his opinion that 

Mazik would “have a lifetime of chronic pain and issues related 

to” his heel injury.
5

3. Mazik’s Demand

Mazik received $50,000 from Mercury Insurance Company

(Mercury), the insurer for the driver of the other car who was at 

fault in the accident. That sum amounted to the full value of the 

driver’s policy.

On December 31, 2009, Mazik’s attorney submitted a claim 

to GEICO under Mazik’s underinsured motorist policy, which had 

a policy limit of $100,000. The letter included medical records of 

Mazik’s treatment to date along with other supporting 

documentation. In light of the “severity of the damages” and the 

residual effects of the injuries, the letter requested compensation 

of $50,000, representing the full policy amount offset by the 

$50,000 payment Mazik had already received.

4. GEICO’s Response

After receiving Mazik’s December 31, 2009 demand, a 

GEICO claims adjuster prepared a written “Claim Evaluation 

Summary” (Evaluation). The Evaluation summarized the 

medical records included with Mazik’s demand and assessed 

values for medical expenses, lost income, and “pain and 

suffering.” It calculated a “negotiation range” for the full value of 

the claim (including the $50,000 that Mercury had already paid) 

from $47,047.86 to $52,597.86. As discussed further below,

Richard Burton, a GEICO claims adjuster who later worked on 

Mazik’s file, testified at trial that the summary of the medical 

reports in the Evaluation omitted important information from the 

medical records that Mazik had provided.

After preparing the Evaluation, the adjuster obtained 

approval from GEICO’s regional liability administrator, Lon 

Grothen, to reject Mazik’s $50,000 claim. Accordingly, on 

January 22, 2010, GEICO offered Mazik a settlement of $1,000.
6

In September 2010, after a new claims adjuster began to 

work on the file but without receiving any additional information, 

GEICO increased its settlement offer to $13,800. Four months 

later, on January 22, 2011, GEICO increased its offer to $18,000. 

A note from Grothen approving the offer stated that he had 

“Increased The General Damage Range To Increase The 

Possibility of Settlement.”

GEICO requested an independent medical evaluation of 

Mazik, which occurred on May 23, 2011. The examiner, Dr. Don 

Williams, summarized Mazik’s prior medical records and then 

stated his brief conclusions. Dr. Williams reported that Mazik 

was “doing well two years after” the accident, and there was “no 

indication that he needs surgery.” He concluded that Mazik’s 

injury “does not restrict his occupation as a teacher” and that 

“[n]o further medical care is indicated.” He opined that Mazik’s 

“prognosis is good.”

On February 16, 2012, GEICO served a statutory offer to 

compromise Mazik’s claim for $18,887. Mazik rejected the offer 

and reasserted his demand for the policy limits.

GEICO did not make any additional settlement offers. 

Grothen explained that GEICO declined to do so, even though he 

had authorized payment of more money, because “there was no 

negotiation from the other side. So they never came off their 

policy limit. We call that throwing good money after bad. If we 

can’t get them to negotiate, he would have been—it’s bidding 

against yourself.”

On August 31, 2012, even after GEICO had received copies 

of Dr. Yee’s treatment records reporting continuing medical 

issues three years after the accident, Grothen gave his “Ok To 

Move This Toward Arbitration. I Do Not See This As A Policy 

Limits Case.”
7

5. The Arbitration

The arbitration took place in April 2013. The arbitrator 

issued an award for the full policy limits, and GEICO provided 

Mazik with a check for $50,000 in June 2013, 30 months after the 

jury in this case concluded that GEICO should have paid the 

policy limits.

6. Mazik’s Bad Faith Action

Mazik filed this action for bad faith against GEICO on 

May 7, 2014. The case was tried to a jury in July 2016. The jury 

returned a verdict in favor of Mazik and awarded compensatory 

damages of $313,508. The compensatory damages consisted of 

$300,000 for “[m]ental suffering, anxiety, and emotional distress” 

and $13,508 for “attorney’s fees and costs to recover the insured 

policy benefits.”

The jury also awarded punitive damages of $4 million. 

Following a motion for a new trial, the trial court found that the 

punitive damages award was excessive in light of the ratio of 

punitive to compensatory damages and the fact that Mazik’s

claim “relates to financial damages” rather than personal injury. 

The court reduced the amount of punitive damages to $1 million.

DISCUSSION

1. Standard of Review

A. Oppression, fraud, or malice

Punitive damages may be awarded only on proof by “clear 

and convincing evidence” that the defendant “has been guilty of 

oppression, fraud, or malice.” (§ 3294, subd. (a).) A finding that 

the defendant engaged in such conduct is reviewed under the

substantial evidence standard. (Kelly v. Haag (2006) 145 

Cal.App.4th 910, 916.) In applying that standard, we “view the 

evidence in the light most favorable to the prevailing party, 

giving it the benefit of every reasonable inference and resolving 
8

all conflicts in its favor.” (Bickel v. City of Piedmont (1997) 16 

Cal.4th 1040, 1053.)

The parties agree that the substantial evidence standard 

applies to the jury’s finding that punitive damages are 

appropriate, but differ as to how to apply that standard in light of 

the requirement that a plaintiff prove oppression, fraud, or malice 

by clear and convincing evidence. GEICO argues that the clear 

and convincing burden is “incorporated into the substantial 

evidence standard of review.” Citing Crail v. Blakely (1973) 8 

Cal.3d 744, 750 (Blakely), Mazik argues that, on appeal, the 

“substantial evidence standard remains the same whether the 

‘preponderance of the evidence’ or ‘clear and convincing evidence’ 

standard applied in the trial court.”

The dispute is not material. While some cases have 

described the appropriate inquiry as “whether the record contains 

‘substantial evidence to support a determination by clear and 

convincing evidence’ ” (Shade Foods, Inc. v. Innovative Products 

Sales & Marketing, Inc. (2000) 78 Cal.App.4th 847, 891; 

Tomaselli v. Transamerica Ins. Co. (1994) 25 Cal.App.4th 1269, 

1287), the “clear and convincing evidence” component of this 

formulation is not of great significance on appeal. As our 

Supreme Court has explained, the “ ‘clear and convincing’ ” 

standard was adopted “for the edification and guidance of the 

trial court, and was not intended as a standard for appellate 

review.” (Blakely, supra, 8 Cal.3d at p. 750.) The clear and 

convincing requirement in the trial court does not change the rule 

on appeal that we consider “conflicting evidence in a light 

favorable to the judgment, with the presumption the trier of fact 

drew all reasonable inferences in support of the verdict.” (Hoch v. 

Allied-Signal, Inc. (1994) 24 Cal.App.4th 48, 60.) The practical 
9

effect of this rule is that the quantum, or weight, of the evidence 

before the jury is not a factor for appellate review.2

B. Amount of punitive damages

We review de novo whether an award of punitive damages 

is constitutionally excessive. (Simon v. San Paolo U.S. Holding 

Co., Inc. (2005) 35 Cal.4th 1159, 1172 (Simon).)

2. The Evidence Was Sufficient to Show That 

Grothen Was a “Managing Agent”

Mazik does not contend that any of the claims adjustors 

who worked on his file were managing agents of GEICO. Rather, 

he claims that Grothen was a managing agent based upon 

Grothen’s authority over claims exceeding $35,000. Mazik 

explains that his “position rests solely on the fact that Grothen 

had broad regional powers over adjusters and managers in cases 

up to $100,000 and used that broad discretion to enforce his 

‘negotiation’ regime.”3 Thus, the question of whether the record 

 

2 For example, under the substantial evidence standard the 

testimony of one witness may be sufficient to support the verdict, 

even if there is other evidence that would support contrary 

findings. (In re Marriage of Mix (1975) 14 Cal.3d 604, 614; Pope 

v. Babick (2014) 229 Cal.App.4th 1238, 1245–1246.) In the 

context of the dispute in this case, if there was evidence sufficient 

for the jury to conclude that GEICO’s managing agent was aware 

of and approved oppressive, malicious, or fraudulent conduct, we 

must affirm even if there was also substantial evidence that the 

agent was not aware of such conduct.

3 GEICO argues that there is no evidence to support the 

claim that Grothen had settlement authority up to $100,000 and 

that the record supports only a conclusion that Grothen had 

settlement authority for claims between $35,000 and $50,000. As 
10

contains substantial evidence of culpable conduct by a managing 

agent must be answered by evaluating Grothen’s role.

Section 3294 establishes the legal standard for punitive 

damages. Section 3294, subdivision (a) requires proof that a 

“defendant has been guilty of oppression, fraud, or malice.” 

Section 3294, subdivision (b) then describes the proof necessary 

when the defendant is an employer whose employee allegedly 

engaged in such conduct. An employer may not be liable for 

punitive damages based upon the acts of an employee unless the 

employer (1) “had advance knowledge of the unfitness of the 

employee and employed him or her with a conscious disregard of 

the rights or safety of others”; or (2) “authorized or ratified the 

wrongful conduct for which the damages are awarded”; or (3) 

“was personally guilty of oppression, fraud, or malice.” (Ibid.) 

And, with respect to a corporate employer, “the advance 

knowledge and conscious disregard, authorization, ratification or 

act of oppression, fraud, or malice must be on the part of an 

officer, director, or managing agent of the corporation.” (Ibid.)

In White v. Ultramar, Inc. (1999) 21 Cal.4th 563 (White), 

our Supreme Court explained that managing agents are 

employees who “exercise substantial independent authority and 

judgment in their corporate decisionmaking so that their 

decisions ultimately determine corporate policy.” (Id. at pp. 566–

567.) The court further explained that, under section 3294, 

subdivision (b), a “plaintiff seeking punitive damages would have 

 

discussed below, the issue is not material, as the record shows 

that Grothen had substantial regional authority over a large 

number of claims.
11

to show that the employee exercised substantial discretionary

authority over significant aspects of a corporation’s business.” 

(White, at p. 577.) The court disapproved two prior cases holding 

or suggesting that a supervisor may be a managing agent merely 

because he or she has the ability to hire and fire workers. (Id. at 

p. 574, fn. 4.)

GEICO argues that the court further restricted the 

definition of a managing agent in Roby v. McKesson Corp. (2009) 

47 Cal.4th 686 (Roby). The court in that case held that a 

supervisor who harassed and discriminated against an employee 

on account of a medical condition was not a managing agent of 

the defendant company. The supervisor supervised only four 

employees in a local distribution center for a company that had 

over 20,000 employees. (Id. at p. 714.) The court explained that, 

“[w]hen we spoke in White about persons having ‘discretionary 

authority over . . . corporate policy’ (White, supra, 21 Cal.4th at 

p. 577), we were referring to formal policies that affect a 

substantial portion of the company and that are the type likely to 

come to the attention of corporate leadership.” (Roby, at pp. 714–

715, italics added.)

GEICO claims that, based upon this definition, a managing 

agent must have responsibility over “formal” policies, which 

GEICO interprets as policies that are not simply “ad hoc.” Thus, 

GEICO argues that Mazik must show substantial evidence that 

“Grothen established policies (i) intended to be applied across a 

broad scope of situations, (ii) that affected a substantial portion of 

GEICO, and (iii) that were likely to come to the attention of

GEICO’s corporate leadership.”

We need not consider this claim because GEICO did not 

request a jury instruction containing such a definition of 

managing agent. Rather, Mazik and GEICO jointly requested, 
12

and the trial court gave, the standard instruction on the 

definition of managing agent contained in CACI No. 3946. That 

instruction tracks the language in White in explaining simply 

that “[a]n employee is a ‘managing agent’ if he or she exercises 

substantial independent authority and judgment in his or her 

corporate decision making such that his or her decisions 

ultimately determine corporate policy.” (CACI No. 3946; White, 

supra, 21 Cal.4th at pp. 566–567.) GEICO does not assert any 

error in this or any other jury instruction on appeal.

As the court explained in Bullock v. Philip Morris USA, Inc. 

(2008) 159 Cal.App.4th 655, “We review the sufficiency of the 

evidence to support a verdict under the law stated in the 

instructions given, rather than under some other law on which 

the jury was not instructed.” (Id. at pp. 674–675; see Null v. City 

of Los Angeles (1988) 206 Cal.App.3d 1528, 1535 [“We therefore 

conclude that where a party to a civil lawsuit claims a jury 

verdict is not supported by the evidence, but asserts no error in 

the jury instructions, the adequacy of the evidence must be 

measured against the instructions given the jury”].) A trial court 

in a civil case generally “has no duty to instruct on its own 

motion.” (Bullock, at p. 675.) Thus, assessing the evidence based 

upon a standard that was not presented to the jury or the trial 

court below “would allow reversal of a judgment on a jury verdict, 

requiring a retrial, even though neither the jury nor the court 

committed error.” (Ibid.)

4

 

4 Pursuant to Government Code section 68081, we invited 

the parties to submit letter briefs addressing the issue whether 

GEICO forfeited the right to argue that the evidence was 

insufficient based upon a definition of “managing agent” that was 
13

There is ample evidence in the record that Grothen met the 

definition of managing agent that the jury was given.5 Grothen 

had wide regional authority over the settlement of claims. He 

testified that he was a regional liability administrator for Orange 

County, Los Angeles, San Bernardino, and Alaska. Over 100 

claims adjusters are “funneled up” to him for approval of 

settlements within the range of his authority, which included 

claims up to at least $50,000. This responsibility affects a large 

 

not given to the jury. In its letter brief, GEICO argues that the 

definition of “formal” policy that it urges in its brief is simply the 

“common meaning of the term ‘corporate policy’ that is already 

embraced in the words of the instruction” included in CACI 

No. 3946. But GEICO proposes a very specific definition of a 

formal policy that a jury would not necessarily glean from the 

standard instruction. GEICO forfeited the right to argue that the 

evidence is insufficient to meet that specific definition by failing 

to request an instruction that included it. To the extent that 

GEICO argues that a “formal” policy simply means something 

other than a decision “ ‘for the particular case at hand without 

consideration of wider application’ ” (i.e., its definition of “ad 

hoc”), as discussed below the evidence of Grothen’s role was 

sufficient to meet that definition.

5 It is likely that the evidence would support Grothen’s 

status as a managing agent even under the specific definition 

that GEICO urges. An employee’s authority over the systematic 

application of policies in a claims manual or other formal 

corporate document might “determine corporate policy” as 

effectively as the formulation of the policies themselves. (White, 

supra, 21 Cal.4th at pp. 566–567.) It is doubtful that the court in 

Roby intended its reference to “formal” policies to exclude persons 

with such authority from its definition of a managing agent. 

Nevertheless, we need not address that question here.
14

number of claims. Grothen testified that he typically has 18 to 20 

meetings per day with claims adjusters seeking his approval or 

direction for handling particular claims.

Grothen’s own testimony established that an important

part of his job was to establish settlement standards within his 

region. He testified that it is “an extremely important part of 

[his] role” to “maintain consistency in settlement valuations.” He 

further explained that “consistency is also important so we can be 

profitable.” The jury reasonably could have concluded that this 

type of broad decisionmaking responsibility for establishing 

GEICO’s settlement standards “ultimately determine[d] corporate 

policy.” (White, supra, 21 Cal.4th at pp. 566–567.)

3. The Evidence Was Sufficient To Show That 

Grothen Ratified Conduct Warranting Punitive 

Damages

As the trial court concluded in denying GEICO’s motion for 

judgment notwithstanding the verdict, Mazik provided evidence 

at trial that GEICO “deliberately ‘cherry-picked’ medical 

information and disregarded unfavorable findings.” The evidence 

supports this conclusion.

As mentioned, Burton (the GEICO claims adjuster who 

testified at trial) admitted that GEICO’s initial claim evaluation 

summary omitted important information that appeared in 

Mazik’s medical records. The omitted information included that

(1) Mazik was still on crutches and had a cast several weeks after 

his accident; (2) Mazik had back pain despite no history of back 

problems; (3) the fracture to Mazik’s calcaneus (i.e., heel bone) 

was “severe”; (4) as of January 20, 2009, over five months after 

the accident, Mazik’s symptoms were worse with walking and he

had significant discomfort in his cast and was medicating with 

Vicodin and ibuprofen; (5) Mazik had limited joint motion nearly 
15

three months after the accident; (6) Mazik’s pain level had 

decreased by November only when he was not using his foot, not 

in general as the summary implied; and (7) as of the end of 

December 2008, Mazik still had current pain complaints and 

functional limitations and was continuing physical therapy.

GEICO’s claims adjusters also prepared summaries in 

advance of the arbitration that were misleading and omitted 

significant information. A summary prepared on February 14, 

2012, incorrectly stated that Mazik had not submitted any 

documentation in support of his request for reimbursement of 

expenses that Mazik’s mother and a friend had incurred in 

assisting him after the accident. In fact, Mazik had submitted 

such documentation with his initial demand.

Another prearbitration summary dated June 12, 2012,

noted as “strengths of case” that there had been “no medical 

treatment since May 2009, then went back to a Dr. Yee for 

5 visits between 1/10/12 and 3/23/12. This appears to be for 

fitting of shoes.” This summary grossly trivialized Dr. Yee’s 

diagnosis and treatment. Dr. Yee’s records showed that special 

shoes were not simply a convenience, but were necessary because 

of ongoing “problems walking and working due to the pain.” They 

noted that Mazik has “undergone significant trauma to the left 

heel and foot which has resulted in a rearfoot deformity.” While a 

New Balance shoe helped to solve this problem to a “great 

degree,” Mazik was “still having problems due to a sensation that 

he is inverted.” Orthotics were necessary for a “persistent 

sensation of falling to the outside” that “appears to be 

overwhelming him.”

GEICO concedes that “[i]t is possible” a reasonable jury 

could conclude that the claims adjusters responsible for Mazik’s 

file “intentionally disregarded” facts in the medical records when 
16

preparing their summaries. However, GEICO argues that the 

claims adjusters’ conduct cannot support a punitive damages

award because Grothen himself was “not personally involved in 

reviewing Mazik’s medical records or otherwise personally 

involved in investigating his claim.”

We reject the argument. There was sufficient evidence for 

the jury to conclude that Grothen engaged in oppressive conduct 

by ignoring information concerning the serious and permanent 

nature of Mazik’s injuries for the purpose of saving the company 

money.

First, the jury reasonably could have concluded that 

Grothen was aware the claims adjusters had reported only 

selected information. Grothen testified that because of his 

limited contact with individual claims, he relies on claims 

examiners to provide him with accurate summaries. However, he 

also testified that in reviewing proposed settlement offers, he has

access to the entire claims file and spot checks the information 

the examiner provides. If he concludes that the examiner has not 

done a thorough job, he investigates further.

Grothen had sufficient contact with Mazik’s file for the jury 

to find that he knew the adjusters’ summaries were misleading. 

GEICO maintains an electronic claims diary that records all the 

pertinent events concerning its handling of claims. That diary 

reflects that Grothen provided direction and/or approval for 

claims decisions on numerous occasions:

(1) On January 19, 2010, Grothen gave his approval to 

reject Mazik’s initial demand for payment of the policy limits on 

his claim.

(2) On January 25, 2010, Grothen instructed the claims 

adjuster that “We Need To Confirm What The Attorney Alleges 

In The Letter. He Says There Is A Permanent Limp. Ask For An 
17

[independent medical examination (IME)]. Send A Wage Loss 

Auth So We Can Get His Records From His Employer. Advise 

The Attorney We Will Re Evaluate The Claim Once This 

Information Is Received.”

(3) On February 22, 2011, Grothen approved an offer of 

up to $18,000 and directed the adjuster to “Get The [IME] Asap.” 

He also directed the adjuster to bring the file back to him when it 

is completed, stating that “We Can Re Evaluate Our Offer At 

That Time.”

(4) On February 14, 2012, Grothen directed a note to the 

claims adjuster stating that “We Met This Morning. I Agree That 

This Does Not Appear To Be A Policy Limits Case. Unless They 

Move Off That Demand I Would Let The Case Be Arbitrated.”6

(5) On March 6, 2012, Grothen directed a note to the 

claims adjuster stating that “We Met. We Have A Very Positive 

[IME] That Indicate [sic] There Will Be No Restrictions In Terms 

Of The Insured’s Employment. There Has Been No Additional 

Treatment In Nearly 3 Years. I Suggest That We Let This Go 

Forward. Please Contact Defense Counsel.”

(6) On August 31, 2012, Grothen gave his approval to 

move the case toward arbitration, stating that “I Do Not See This 

As A Policy Limits Case.”

 

6 The evidence showed that Grothen signed a prearbitration 

summary on February 14, 2012, after discussing the summary 

with Burton. Thus, GEICO’s assertion that the evidence shows 

only that Grothen reviewed the initial Evaluation is incorrect. 

Moreover, it was reasonable for the jury to infer that Grothen saw 

the other summaries as well.
18

(7) On February 22, 2013, Grothen gave his 

authorization to let the statutory settlement offer expire.

Thus, Grothen had far more than a passing familiarity with 

Mazik’s claim. The jury reasonably could have concluded that 

Grothen understood the claims adjusters’ summaries told only

part of the story.

Second, the jury also could have reasonably concluded that 

Grothen himself was fully aware of the serious nature of Mazik’s 

injuries. The summaries that Grothen reviewed, although 

misleading, did contain information that the jury could have 

concluded would have alerted an experienced reviewer like 

Grothen to the serious nature of Mazik’s injuries. For example, 

the claims adjuster’s initial Evaluation in January 2010 stated 

that Mazik had a “grossly comminuted fracture.” Grothen 

understood that a comminuted fracture means that the bone is 

“kind of split apart” and fragmented. He admitted that it was a 

serious injury. The Evaluation also mentioned that Mazik had 

osteoporosis, which Burton admitted was “not” “a good thing to 

have.”

Mazik’s original treating doctor, Dr. Grames, also stated in 

one of his reports that Mazik was likely to have chronic aching 

pain. Grothen admitted that this was important information, and 

testified that he could not say he “didn’t know it.”

Burton’s testimony also suggested that Grothen received 

more information than was included in the summaries. Burton 

explained that, when meeting with a supervisor for approval of a 

settlement offer, claims adjusters typically expand on the 

information included in the summaries. For example, while the 

January 2010 Evaluation referred to Mazik’s injury as a “left 

fractured foot,” when meeting with a supervisor the claims 
19

adjuster would expound on that description by explaining that it 

was a “comminuted fracture of the calcaneus.”

Third, the jury could have reasonably concluded that 

Grothen adopted an improper adversary approach to resolving 

Mazik’s claim. Grothen testified that he approved GEICO’s

settlement offer of $18,800 even though the adjuster, with 

Grothen’s approval, had estimated a claim value of up to $23,000. 

Grothen explained that offering the low end of the evaluated 

settlement range was part of a negotiation strategy. While 

Grothen’s explanation of this negotiating strategy concerned an 

offer that Grothen claimed was within the range of 

reasonableness, the jury reasonably could have rejected that 

explanation and concluded that Grothen was simply attempting 

to negotiate as low a payment as possible regardless of Mazik’s 

injuries.

In explaining why GEICO did not provide Dr. Tauber’s 

report to the independent medical examiner, Dr. Williams, 

Grothen also testified that GEICO was “going into an arbitration 

proceeding,” which was an adversary process similar to Mazik’s 

lawsuit. Although he admitted that GEICO had a duty to 

constantly evaluate Mazik’s claim based on new information, 

Grothen testified it was “up to the lawyers” whether to share Dr. 

Tauber’s report with Dr. Williams based on their legal strategy. 

The jury could have concluded that this adversary approach 

placed GEICO’s interests above Mazik’s and led GEICO to ignore 

information that supported Mazik’s claim.7

 

7 Mazik’s bad faith expert testified, without objection, that 

Grothen’s tactic of offering the low end of a range within which 

GEICO was prepared to settle was itself inconsistent with 
20

In light of this evidence, the jury had a sufficient basis to 

conclude that Grothen approved unreasonably low offers to Mazik 

that ignored medical records showing the serious and permanent 

nature of his injuries. Mazik’s bad faith expert evaluated Mazik’s

claim at $400,000 to $450,000 based only on Mazik’s initial 

demand letter and the documentation provided in support of that 

demand. Dr. Tauber described Mazik’s injury as “devastating” 

and testified that the severity of the injury was obvious from the 

beginning. GEICO’s own claims adjuster, Burton, admitted that 

he understood why Mazik considered GEICO’s initial $1,000 offer 

“insulting,” and said that he would have handled it differently 

than the adjuster who made that offer.8 Burton also agreed that 

Mazik has a deformity in his left foot and that such a permanent 

deformity is something that should be taken into consideration in 

determining compensation for pain and suffering.

Thus, the record supports the jury’s conclusion that 

GEICO’s conduct amounted to oppression or malice warranting 

punitive damages. Section 3294 defines “malice” as intentional 

injury or “despicable conduct which is carried on the defendant 

with a willful and conscious disregard of the rights or safety of 

others.” (§ 3294, subd. (c)(1).) “Oppression” is “despicable 

conduct that subjects a person to cruel and unjust hardship in 

conscious disregard of that person’s rights.” (§ 3294, subd. (c)(2).)

 

GEICO’s obligation to its insured and amounted to bad faith. He 

also testified that GEICO should have sent Dr. Tauber’s report to 

Dr. Williams and that its failure to do so amounted to 

intentionally selecting information to defeat Mazik’s claim.

8 As discussed, this initial offer was approved by Grothen.
21

An insurer is not permitted to rely selectively on facts that 

support its position and ignore those facts that support a claim. 

Doing so may constitute bad faith. (Wilson v. 21st Century Ins. 

Co. (2007) 42 Cal.4th 713, 721; Maslo v. Ameriprise Auto & Home 

Ins. (2014) 227 Cal.App.4th 626, 634.) When sufficiently 

egregious, an insurer’s intentional disregard of facts supporting a 

claim also meets the standard for punitive damages. (Egan v. 

Mutual of Omaha Ins. Co. (1979) 24 Cal.3d 809, 821–822 (Egan).) 

Viewing the record in light of the substantial evidence standard, 

the jury reasonably could have found that Grothen ratified such 

egregious conduct in approving settlement offers that ignored 

Mazik’s serious and permanent injuries.

4. The Amount of Punitive Damages Is Within the 

Range Permitted By Due Process

The due process clause of the Fourteenth Amendment to 

the United States Constitution “places constraints on state court 

awards of punitive damages.” (Roby, supra, 47 Cal.4th at p. 712, 

citing State Farm Mut. Automobile Ins. Co. v. Campbell (2003) 

538 U.S. 408, 416–418 (State Farm).) Grossly excessive or 

arbitrary punitive damages awards are constitutionally 

prohibited because “ ‘due process entitles a tortfeasor to “ ‘fair 

notice not only of the conduct that will subject him to 

punishment, but also of the severity of the penalty that a State 

may impose.’ ” ’ ” (Roby, at p. 712, quoting Simon, supra, 35 

Cal.4th at p. 1171.)

Three “guideposts” govern the analysis of whether the 

amount of punitive damages is constitutionally permissible: 

“ ‘(1) the degree of reprehensibility of the defendant’s misconduct; 

(2) the disparity between the actual or potential harm suffered by 

the plaintiff and the punitive damages award; and (3) the 

difference between the punitive damages awarded by the jury and 
22

the civil penalties authorized or imposed in comparable cases.’ ” 

(Roby, supra, 47 Cal.4th at p. 712, quoting State Farm, supra, 538 

U.S. at p. 418.) Of these, the most important is the degree of 

reprehensibility of the defendant’s conduct. (Roby, at p. 713.)

A. Degree of Reprehensibility

In analyzing the reprehensibility of the defendant’s 

conduct, we consider whether “ ‘[1] the harm caused was physical 

as opposed to economic; [2] the tortious conduct evinced an 

indifference to or a reckless disregard of the health or safety of 

others; [3] the target of the conduct had financial vulnerability; 

[4] the conduct involved repeated actions or was an isolated 

incident; and [5] the harm was the result of intentional malice, 

trickery, or deceit, or mere accident.’ ” (Roby, supra, 47 Cal.4th at 

p. 713, quoting State Farm, supra, 538 U.S. at p. 419.)

The first two factors do not apply here. As the trial court 

found in ordering the reduction of the punitive damages award 

from $4 million to $1 million, “this is a bad faith case premised on 

delay rather than a suit for personal injury. As such, the claim 

relates to financial damages.”

However, the last three factors are present:

Financial vulnerability

Mazik was financially vulnerable. Both he and his mother 

testified that GEICO’s failure to pay the full $50,000 of the policy 

on his claim caused him financial hardship. He went into debt to 

pay bills, including a fee for testing that he required to obtain 

more time to complete the test for entrance to graduate school. 

The accident caused him to lose the free room and board that he 

previously received as part of his compensation for his 

employment at a space camp for children. And he had to turn 

down social invitations for lack of money.
23

Repeated Conduct

GEICO’s oppressive conduct was repeated. As discussed 

above, on numerous occasions Grothen either authorized 

unreasonably low settlement offers or approved decisions not to 

increase those offers. Those decisions began with the $1,000 offer 

to Mazik in response to his initial demand, and extended through 

decisions to go to arbitration rather than pay the full value of the 

claim. Grothen declined to pay policy limits on the claim even 

after receiving Dr. Tauber’s report in advance of the arbitration. 

Grothen minimized Dr. Tauber’s opinion by characterizing his 

reputation as “an expert that testifies in litigation.”

Citing Amerigraphics, Inc. v. Mercury Casualty Co. (2010) 

182 Cal.App.4th 1538 (Amerigraphics), GEICO argues that its 

conduct was not repeated because it concerned only one claim. In 

Amerigraphics, this court observed that the defendant insurer’s 

conduct “could be characterized as more than a single isolated 

incident, as the evidence showed several discrete acts of 

misconduct involving Amerigraphic’s claim for coverage under 

various policy provisions.” (Id. at p. 1563.) However, we

concluded that there was no evidence that the insurer was a 

“ ‘repeat offender’ ” because the “conduct at issue ultimately 

involved only one insured and one claim.” (Ibid.)

In contrast, there is evidence here suggesting that GEICO’s 

approach to Mazik’s claim was not isolated. As mentioned, 

Grothen testified that an important part of his job was to 

establish consistent approaches to settlement valuations within 

his region. Thus, there is reason to believe from Grothen’s own 

characterization of his responsibilities that he has adopted the 

same approach in other cases that he employed here of selective 

reliance on helpful facts and acting as an adversary rather than a 

fiduciary. (See Egan, supra, 24 Cal.3d at p. 820 [“ ‘The 
24

obligations of good faith and fair dealing encompass qualities of 

decency and humanity inherent in the responsibilities of a 

fiduciary’ ”], quoting Goodman & Seaton, Foreward: Ripe for 

Decision, Internal Workings and Current Concerns of the 

California Supreme Court (1974) 62 Cal.L.Rev. 309, 346–347.)

Other courts have concluded that repeated bad faith actions 

with respect to a single insured over a long period of time 

enhances the reprehensibility of an insurer’s conduct. (See 

Century Surety Co. v. Polisso (2006) 139 Cal.App.4th 922, 965

(Polisso); Diamond Woodworks, Inc. v. Argonaut Ins. Co. (2003) 

109 Cal.App.4th 1020, 1054–1055.) In light of the extent and 

duration of GEICO’s bad faith conduct toward Mazik and 

Grothen’s own description of his role in establishing settlement 

practices, we conclude that the same approach is appropriate 

here.

Intentional malice, trickery, or deceit rather than 

accident

There is evidence that GEICO intentionally manipulated 

the facts to create a favorable record justifying its offers to Mazik 

below policy limits. As mentioned, the trial court found that 

GEICO “ ‘cherry picked’ medical information and disregarded 

unfavorable findings.” While we review the amount of punitive 

damages under the de novo standard, “findings of historical fact 

made in the trial court are still entitled to the ordinary measure 

of appellate deference.” (Simon, supra, 35 Cal.4th at p. 1172.)

The trial court’s assessment is supported by the evidence. 

Grothen acknowledged that Dr. Tauber’s report prior to the 

arbitration suggested that Mazik was “going to have ongoing 

problems.” For strategic reasons, GEICO did not provide that 

report to its own expert, Dr. Williams, on whom GEICO relied for 

its claim valuation. While this strategic manipulation is perhaps 
25

less egregious than outright fraud, it nevertheless indicates 

intentional conduct rather than “mere accident.” (Cf. Nickerson 

v. Stonebridge Life Ins. Co. (2016) 5 Cal.App.5th 1, 22

[“Stonebridge’s practice was never to authorize peer reviewers to 

communicate with treating physicians, thus intentionally 

concealing material information from the claims’ functional 

decision maker so as to limit the amount Stonebridge would have 

to pay out on its policies”].)

B. Disparity between the harm and the 

punitive damages award

As reduced by the trial court, the punitive damages award 

of $1 million is approximately three times the compensatory 

damages the jury awarded. In State Farm, the Supreme Court 

declined to “impose a bright-line ratio which a punitive damages 

award cannot exceed.” (State Farm, supra, 538 U.S. at p. 425.) 

However, the court cited as “instructive” the “long legislative 

history, dating back over 700 years and going forward to today, 

providing for sanctions of double, treble, or quadruple damages to 

deter and punish.” (Ibid.) As Mazik points out, this court has

previously approved a punitive damages award with a punitive to 

compensatory damages ratio of more than three-to-one even 

where only one of the reprehensibility factors was present. (See 

Amerigraphics, supra, 182 Cal.App.4th at pp. 1562, 1566.)

GEICO relies on our Supreme Court’s decision in Roby in 

arguing that the punitive damages award here should be reduced 

to equal the amount of compensatory damages. In Roby, the 

court reduced a punitive damages award to equal the amount of 

compensatory damages. (Roby, supra, 47 Cal.4th at p. 719.) The 

court relied in particular on the “relatively low degree of 

reprehensibility” and the “substantial compensatory damages 

verdict,” which “included a substantial award of noneconomic 
26

damages.” (Ibid.) The court cited the suggestion of the United 

States Supreme Court in State Farm that “ ‘[w]hen compensatory 

damages are substantial, then a lesser ratio, perhaps only equal 

to compensatory damages, can reach the outermost limit of the 

due process guarantee.’ ” (Roby, at p. 718, quoting State Farm, 

supra, 538 U.S. at p. 425, italics added by Roby.)

However, the reprehensibility of the conduct by the 

defendant’s managing agent in Roby was significantly more 

limited than the conduct at issue here. In that case, managing 

agents of the defendant company were involved only in a “onetime failure” to take action on a report of harassment. (Roby, 

supra, 47 Cal.4th at pp. 715–716.) In contrast, here, GEICO’s 

managing agent repeatedly approved bad faith settlement offers 

and on numerous occasions ignored information supporting 

Mazik’s claim.

C. Comparable civil penalties

GEICO cites Insurance Code section 790.035 in arguing 

that the punitive damages award here is far greater than the 

$10,000 penalty per act that the Legislature has established for 

unfair or deceptive insurance practices. Like the courts in 

Amerigraphics and Polisso, we do not find this comparison 

particularly useful as a measure of an insurer’s culpability where 

the conduct at issue involved repeated acts of bad faith over a 

lengthy period of time. (See Amerigraphics, supra, 182 

Cal.App.4th at p. 1566; Polisso, supra, 139 Cal.App.4th at p. 967.) 

The jury here found that GEICO delayed payment for 30 months. 

As discussed above, the evidence showed that GEICO’s managing 

agent repeatedly approved unreasonable settlement decisions 

over that time period.
27

D. Conclusion

In light of the factors indicating significant reprehensible 

conduct and the three-to-one ratio of punitive to compensatory 

damages, we cannot say that the trial court’s decision approving 

punitive damages of $1 million exceeds constitutional restraints. 

We therefore affirm the punitive damages award.

DISPOSITION

The judgment is affirmed. Mazik is entitled to his costs on 

appeal.

CERTIFIED FOR PUBLICATION.

LUI, P. J.

We concur:

CHAVEZ, J.

HOFFSTADT, J.