Court Opinion

ID: 1022555
Source: CourtListenerOpinion
Date Created: 2013-07-04 23:24:00.395093+00
Date Added: 2024-06-11T13:01:00.429925
License: Public Domain

UNPUBLISHED

                    UNITED STATES COURT OF APPEALS
                        FOR THE FOURTH CIRCUIT

                             No. 06-1511

LESLIE JOE NANCE,

                                              Plaintiff - Appellee,

           versus

KENTUCKY NATIONAL INSURANCE COMPANY,

                                              Defendant - Appellant,

           and

NATIONWIDE INSURANCE AGENCY, INCORPORATED,

                                                          Defendant.

Appeal from the United States District Court for the Southern
District of West Virginia, at Charleston. John T. Copenhaver, Jr.,
District Judge. (2:02-cv-00266)

Argued:   March 14, 2007                      Decided:   May 8, 2007

Before MICHAEL and KING, Circuit Judges, and HAMILTON, Senior
Circuit Judge.

Affirmed by unpublished per curiam opinion.

ARGUED: Douglas Michael Palais, LECLAIR RYAN, P.C., Richmond,
Virginia, for Appellant. William Lowell Mundy, MUNDY & NELSON,
Huntington, West Virginia, for Appellee.    ON BRIEF: Cameron S.
Matheson, LECLAIR RYAN, P.C., Richmond, Virginia, for Appellant.

Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:

     In the present appeal, Kentucky National Insurance Company

(Kentucky National) seeks reversal of the district court’s entry of

judgment against it in the amount of $233,000 in compensatory

damages and $850,000 in punitive damages.    The judgment resulted

from the jury’s verdict in favor of Leslie Joe Nance (Nance), one

of Kentucky National’s insureds, on Nance’s claim in the present

diversity action that Kentucky National violated the West Virginia

Unfair Claim Settlement Practices Act, W. Va. Code § 33-11-4(9), in

handling his uninsured motorist claim.      According to Kentucky

National, reversal is appropriate because the district court erred

in denying its motion for judgment as a matter of law, made

pursuant to Federal Rule of Civil Procedure 50(b).   We affirm.

                                I.

     Because this appeal challenges the district court’s refusal to

grant Kentucky National’s Rule 50(b) motion, we must view the

evidence in the light most favorable to Nance (and in support of

the jury’s verdict), drawing every legitimate inference in Nance’s

favor.   International Ground Transp. v. Mayor and City Council of

Ocean City, Md., 475 F.3d 214, 218-19 (4th Cir. 2007).   Therefore,

we present the facts in accord with this standard.

     On December 15, 1998, at approximately 7:20 a.m., Nance was

driving a tractor-trailer, owned by his employer, on U.S. Route

                               - 2 -
25-E in Barbourville, Kentucky.       At the time, Nance was thirty-

eight years old.        He was traveling the speed limit, fifty-five

miles per hour, which speed was later corroborated by the tractor-

trailer’s on-board computer.

      As Nance approached the intersection of U.S. Route 25-E and

Noeville Lane, with the fourteen lights on his tractor-trailer

illuminated, Lisa Cordell (Cordell) pulled out directly in front of

Nance, despite the fact that her lane of traffic was controlled by

a stop sign.      Trying to avoid striking Cordell’s vehicle, Nance

slammed on his brakes and swerved to the left.        Nonetheless, Nance

was unable to avoid hitting Cordell’s vehicle; the impact causing

his tractor-trailer to jackknife.

      Paramedics quickly arrived on the scene, extracted Nance from

the   cab   of   his   tractor-trailer,   and   transported   him   via   an

ambulance to the hospital for treatment of his physical injuries.

Within four minutes after the accident, two police officers arrived

on the scene and conducted an investigation.          Upon arrival, the

officers immediately noted that the windows of Cordell’s vehicle

were frosted over, which had prevented her from seeing Nance’s

vehicle approaching.        The police officers also determined that

Cordell had failed to yield the right of way and that Nance had not

engaged in any improper driving.

      As a result of the accident, Nance suffered serious injuries

to his head, neck, shoulder, back, and brain.          The brain injury

                                  - 3 -
caused him continuous headaches.        Due to his injuries, Nance

underwent extensive treatment, including back surgery, chiropractic

treatment, and physical therapy.        In addition to his medical

expenses, Nance incurred significant past lost wages and future

lost wages as a result of the accident.

     Also as a result of the accident, Nance suffered a significant

loss of enjoyment of life.    For example, due to Nance’s injuries,

he could no longer perform tasks around his farm and he could no

longer engage in the activities that he once enjoyed with his

family.     During the trial in the present action against Kentucky

National, Conrad Diaz, Nance’s expert witness in claims adjusting,

valued Nance’s damages from the accident at between $750,000 and

$1,300,000, with a figure exceeding $1,000,000 “more likely,” (J.A.

663).

     At the time of the accident, Cordell was uninsured. Nance did

not learn of her uninsured status until a year after the accident.

A policy issued by Liberty Mutual Insurance Company (Liberty

Mutual) provided Nance the first $50,000 in uninsured motorist

coverage.    A policy issued by Kentucky National provided Nance an

additional $100,000 in uninsured motorist coverage, which coverage

was secondary to that provided under the Liberty Mutual policy.

Finally, a policy issued by Nationwide Mutual Insurance Company

(Nationwide) also provided Nance $100,000 in uninsured motorist

coverage, which coverage was also secondary to that provided under

                                - 4 -
the   Liberty    Mutual     policy.       Notably,      the   parties     agree   that

Kentucky National’s uninsured motorist coverage would not trigger

until the $50,000 policy limit under the Liberty Mutual policy had

been exhausted.

      In November 1999, when Nance was first advised that Cordell

might not have insurance, the one-year statute of limitations on

his claims in Kentucky was about to expire. Therefore, to preserve

his claims, Nance promptly filed suit in Kentucky state court (the

1999 Underlying Action) against Cordell, Kentucky National, and

Nationwide.1      Of relevance here, Nance’s complaint in the 1999

Underlying Action alleged tort liability based upon a negligence

theory against Cordell and contractual liability against Kentucky

National.

      Immediately after Nance filed the 1999 Underlying Action, on

November 29, 1999, counsel for Nance faxed a copy of the police

report to Kentucky National. The jury heard testimony establishing

that despite the clarity of liability, Kentucky National repeatedly

attempted to create bogus issues of negligence against Nance in

order     to   devalue   his    claim.      For   example,     with     no   evidence

whatsoever, Kentucky National asserted that Nance’s brakes on the

tractor-trailer      were      defective    at    the   time   of   the      accident.

Kentucky National later admitted that it never had any evidence to

      1
      Liberty Mutual was joined as a party in the 1999 Underlying
Action in late 2000.

                                         - 5 -
support     this     assertion.          In     fact,     the    Department       of

Transportation’s inspection of the tractor-trailer demonstrated

that everything was working properly.2                   For a second example,

Kentucky National also accused Nance of speeding until the tractor-

trailer’s onboard computer indicated otherwise.                         For a third

example, Kentucky National sought to work with Cordell in order to

place blame on Nance.

     For yet a fourth example, approximately three years after

Nance filed the 1999 Underlying Action, four years after the

accident occurred, and after a mediation between Nance and Kentucky

National, Kentucky National hired an accident reconstructionist.

Nance’s expert witness at trial regarding claims adjusting, Conrad

Diaz,    testified    that,    under   the     circumstances       of    this   case,

including    Kentucky    National’s      timing     in    hiring    the    accident

reconstructionist,       Kentucky        National        hired     the     accident

reconstructionist in an attempt to place liability for the accident

on Nance.   However, the accident reconstructionist placed no fault

on Nance.

     As early as January 2000, Nance attempted to discuss with

Kentucky    National    an    amicable   settlement.         Kentucky      National

refused to even discuss settlement, and after one and one-half

years of undergoing discovery, Nance attempted to set the 1999

     2
      The  record   is   unclear   whether  the                  Department       of
Transportation was a federal or state agency.

                                       - 6 -
Underlying Action for trial.     However, Kentucky National opposed

setting the case for trial and instead requested mediation, which

mediation the court ordered.      Therefore, on September 17, 2001,

Nance, his wife, and Nance’s counsel traveled over three hours to

attend a mediation conference.    At this mediation conference, on a

date chosen and agreed to by Kentucky National, Kentucky National

refused to even make an offer to Nance to settle his claim and then

unilaterally aborted the mediation at noon. Nance testified during

the trial in the present case that his dire financial situation and

the burden of litigation with Kentucky National, both caused by

Kentucky National’s mishandling of his uninsured motorist claim,

caused him extreme stress. The stress was so great that, beginning

in either 2000 or 2001, he began taking prescription anti-anxiety

medication, which medication he continued to take at the time of

the trial in the present case (November 2005).    In November 2001,

Nance settled with Liberty Mutual for the policy limit of $50,000.

     The evidence at trial in the present case showed that, despite

clear liability on a claim worth between $750,000 and $1,300,000,

Kentucky National did not make its first settlement offer of

$25,000 until October 11, 2002, three years after Nance filed the

1999 Underlying Action, seven months after Kentucky National admits

that it learned Liberty Mutual had settled with Nance for Liberty

                                 - 7 -
Mutual’s $50,000 policy limit, and approximately two weeks before

the scheduled trial date in the 1999 Underlying Action.

      Approximately one week later, on October 18, 2002, Kentucky

National upped its offer by $10,000 to $35,000.      Prior to this

second offer, Kentucky National’s defense counsel suggested to

Kentucky National that it offer Nance $80,000, a recommendation

which Kentucky National rejected.   Because of a technical problem

with the jury, the trial court in the 1999 Underlying Action

continued the start of that trial until April 2003.         As the

rescheduled trial date approached, although the facts of the case

and the amount of damages had not changed, Kentucky National

increased its offer to $50,000, just half of its policy limit.

Nance rejected the offer.

     Despite the fact that Nance had been treated by over twenty

physicians, some required by Workers’ Compensation, and armed with

his medical records, Kentucky National asked Nance to undergo a

medical examination in Lexington, Kentucky, approximately two and

one-half hours from his home. Nance requested that he be permitted

to see a doctor closer to his home as his medical condition made

travel difficult, but Kentucky National refused. After the two and

one-half hour trip, Kentucky National’s designated doctor examined

Nance for only approximately eight to ten minutes.

     After Nance and his wife Debra left the appointment with

Kentucky National’s designated doctor, the Nances became aware that

                              - 8 -
someone had been following them, which frightened the couple.    At

trial in the present case, Nance’s wife specifically testified

regarding the events which took place after they left the doctor’s

office in Lexington, Kentucky:

          Well, we had parked in a parking garage, and when we
     pulled out of the parking garage, we just looked back in
     the mirror and we noticed there’s a guy, the car behind
     us, has a video camera up to our car, and we thought
     that’s kind of weird, you know, a guy in a parking garage
     filming somebody. So we pull out of the parking garage.
     The guy proceeds to pull out with us. We make a right,
     he makes a right. He has still got that video camera.
     Me and Joe start to think there’s something weird -–
     something is weird about this. So we had to get on 64 to
     come home. So we get on 64, this brown car gets on to
     64. The guy is still filming us. We change lanes, he
     changes lanes. We get faster, he gets faster. By this
     time, you know, I’m getting a little scared, I’m thinking
     what is this guy after, what -– what’s he wanting, you
     know? We didn’t know what he was after.

                            *      *     *

          [W]e gave Todd Biddle[, one of the lawyer’s
     representing Nance in the 1999 Underlying Action,]      a
     call because, I mean, it was getting scary because he was
     right up on us, and we couldn’t see his license plate
     number, and we asked Todd should we call the police, and
     Todd said that more than likely we were being followed by
     the insurance company.

(J.A. 717-18).

     Nance testified on the matter as follows:

          When we come out of the doctor’s office, I mean,
     there were several people in the garage. I seen this
     man, but you don’t think nothing of it. But when the car
     starts staying real close to you, made me start getting
     kind of nervous of what is going on. He followed us.
     Every turn I made, he just kept staying right with us,
     and that’s when I got pretty nervous. I did not know,
     you know, what the intentions of this man was and it
     scared me. So I did -– I had my cellphone with me, and

                                 - 9 -
     I called Todd Biddle, and I told him because I did
     suspect, after we got out on the interstate and nothing
     had happened yet, that maybe this guy was like an
     investigator following us. So I called Todd and asked
     him should I call the state police and have this
     gentleman stopped or what I should do, and he said, “I
     will take care of it.”

(J.A. 782).       The evidence at trial established that Kentucky

National and Nationwide jointly hired the private investigator who

frightened the Nances.

     The jury in the present action also heard evidence of similar

bad-faith refusal-to-settle-conduct by Kentucky National.                  The

first     incident   involved    Kentucky   National’s     handling   of   an

underinsured motorist claim filed by James Garland (Garland).

Attorney Guy Bucci (Attorney Bucci) represented Garland.              A drunk

driver, who had just stolen gas from a convenience store, traveling

at a high rate of speed, down a busy street, without any lights on,

crossed    the   center   line   and   struck   Garland   traveling   in   his

employer’s vehicle. Garland suffered substantial physical injuries

while the passenger riding with the drunk driver was killed.

        Like the present case, Kentucky National contested liability

in Garland’s case. Moreover, Kentucky National attempted to create

issues of liability and place the blame on its own insured by

baselessly alleging Garland had crossed over the center line.

Throughout its handling of Garland’s claim, Kentucky National

refused to acknowledge that Garland had a legitimate claim for his

substantial injuries until the eve of trial. Throughout the course

                                   - 10 -
of litigation, none of the circumstances had changed to warrant

Kentucky National’s sudden offer of the policy limit to settle

Garland’s claim other than the fact that trial was about to occur

and that Kentucky National had not done a proper evaluation of

Garland’s claim in the first place.          As Attorney Bucci explained,

Kentucky    National’s    attitude    with   regard    to   claims   handling

amounted to “fight and delay.”        (J.A. 405).

     In the second case exemplifying Kentucky National’s fight-and-

delay approach to claims handling, Joe Holstein (Holstein) was a

passenger in a vehicle driven by a Kentucky National insured who

was speeding and wrecked in a single vehicle accident.             Holstein’s

counsel, William Tiano (Tiano), testified in the present case that

Kentucky National offered Holstein an amount substantially less

than even his documented medical bills to settle his claim.

Kentucky National forced Holstein to file suit against it.              After

several additional unreasonable offers, and on the eve of trial,

Kentucky National finally offered its policy limit to settle

Holstein’s claim.

     The jury also heard expert testimony from Vincent King (King),

who is a West Virginia licensed attorney, a West Virginia licensed

insurance adjuster, a former Deputy Insurance Commissioner for West

Virginia,    and   a   former    General   Counsel    for   West   Virginia’s

Insurance Commissioner.         King testified to multiple dealings with

Kentucky National during his time at the West Virginia Insurance

                                    - 11 -
Commission and in private practice in which Kentucky National

violated ordinary claims practices standards.

     As with both Garland and Holstein, Kentucky National’s fight-

and-delay approach to claims handling began to wear on Nance and

his wife.     As a result of Kentucky National’s refusal to make a

good faith settlement offer, the Nances suffered major financial

difficulty.    The Nances’ financial position became so precarious

that they were required to re-mortgage their house at a high

interest rate, even though it was free of debt at the time, in

order to prevent repossession of some of their assets.     Over the

years, as the claim process with Kentucky National dragged on, the

Nances continued to have difficulty making ends meet, causing them

to have yard sales to raise cash, which yard sales resulted in

great embarrassment to Nance as some of his coworkers attended.

The financial distress also caused the Nances to sell, inter alia,

a dump truck, a flatbed truck, a horse, training equipment for

horses, and dogs and equipment for coon hunting.      Additionally,

Kentucky National’s fight-and-delay approach to claims handling

caused the Nances to deplete both a personal savings account and an

account for their son’s college education.      The jury also heard

evidence to the effect that Nance suffered mental and emotional

trauma due to Kentucky National’s delay tactics and refusal to

offer a good faith settlement.

                               - 12 -
      Eventually, in April 2003, just a couple of days before the

start of the rescheduled trial in the Underlying 1999 Action,

Kentucky National offered $60,000 to Nance to settle his claim

against it.      At trial in the present case, Conrad Diaz expertly

opined that Kentucky National’s $60,000 offer was neither prompt

nor a good faith offer based upon the value of the claim.

      Ultimately,     Kentucky   National         wore    Nance     down   so   much

emotionally and financially that he accepted its $60,000 offer.

The Nances knew that to continue litigation would cost additional

money and take additional time with the possibility of an appeal.

At this point, the Nances had $80 in their savings account.                       As

Nance testified during trial in the present case, “[Kentucky

National] had finally beat me down.”3             (J.A. 793).

      In the present case, Nance alleged that Kentucky National

violated the West Virginia Unfair Claim Settlement Practices Act,

W. Va. Code § 33-11-4(9), in handling his uninsured motorist claim.

Of   relevance   in   this   appeal,   the    West       Virginia    Unfair     Claim

Settlement Practices Act provides:

      (9) Unfair claim settlement practices. - No person shall
      commit or perform with such frequency as to indicate a
      general business practice any of the following:

                                 *     *      *

           (c) Failing to adopt and implement reasonable
           standards for the prompt investigation of claims
           arising under insurance policies;

      3
       Nationwide settled with Nance for $50,000.

                                     - 13 -
           (d) Refusing to pay claims without conducting a
           reasonable investigation based upon all available
           information;

                                  *     *      *

           (f)   Not attempting in good faith to effectuate
           prompt, fair and equitable settlements of claims in
           which liability has become reasonably clear . . . .

Id.

      The district court conducted a jury trial in the present case

from November 1, 2005 through November 7, 2005.             At the close of

Nance’s evidence, Kentucky National moved for judgment as a matter

of law.   See Fed. R. Civ. P. 50(a).           The district court denied the

motion.    At the close of Kentucky National’s case in defense,

Kentucky National orally renewed its motion for judgment as a

matter of law.    The district court again denied the motion.

      The jury returned a verdict in favor of Nance, awarding him:

(a) $150,000 for increased costs and expenses; (b) $100,000 for

aggravation,     inconvenience,       and   annoyance;   (c)    $100,000   for

emotional distress; and (d) $850,000 in punitive damages, for a

total of $1,200,000.      On November 18, 2005, the district court

entered judgment in the amount of $1,200,000.                  Upon motion by

Kentucky National and with the agreement of Nance, the district

court remitted the $150,000 figure to $33,000.            Thus, the district

court entered an amended judgment in favor of Nance for a total of

$233,000 in compensatory damages and $850,000 in punitive damages

(combined total of $1,083,000).         This resulted in a 1 to 3.64 ratio

                                      - 14 -
of compensatory damages to punitive damages.          The district court

denied the remainder of Kentucky National’s post-trial motion for

judgment as a matter of law, or in the alternative, for a new

trial.    See Fed. R. Civ. P. 50(b).

     Kentucky National noted a timely appeal, raising two distinct

challenges to the judgment.      We address each in turn.

                                    II.

     On    the   issue   of   punitive    damages,   the   district   court

instructed the jury as follows:

          In addition to compensatory damages, punitive
     damages may be awarded for violation of the Unfair Claims
     Settlement Practices Act if such violation or violations
     occurred during the plaintiff’s claim, and we’re talking
     about the plaintiff’s underlying claim, and constitute
     both a general business practice and rise to the level of
     a high threshold of actual malice toward the plaintiff in
     the settlement process.

          Actual malice in this context means that the
     insurance company actually knew that the policyholder’s
     claim was proper, but willfully, maliciously, and
     intentionally utilized an unfair business practice in the
     manner it dealt with its insured, the plaintiff, in
     handling the plaintiff’s claim in this case. I should
     say, in the underlying case, as it were.

(J.A. 1025).     On appeal, while Kentucky National does not take

issue with the actual content of these instructions, it does take

issue with the district court’s decision to send the issue of

punitive damages to the jury.        In this vein, Kentucky National

challenges as erroneous the district court’s denial of its motion

for judgment as a matter of law with respect to the issue of

                                  - 15 -
punitive damages.     According to Kentucky National, insufficient

evidence existed for the issue of punitive damages to go to the

jury.4

     Kentucky National’s challenge poses the following question on

appeal:     Did a legally sufficient evidentiary basis exist for a

reasonable jury, viewing the evidence in the light most favorable

to Nance, to find actual malice on the part of Kentucky National in

its handling of Nance’s uninsured motorist claim. See Fed. R. Civ.

P. 50(a); Bryant, 333 F.3d at 543.      If reasonable minds could

differ with respect to the finding of actual malice, we are obliged

to affirm.     See Bryant, 333 F.3d at 543.    As with other legal

rulings, we review de novo the conclusions of law on which a trial

court’s denial of a motion for judgment as a matter of law is

premised.    Benner v. Nationwide Mut. Ins. Co., 93 F.3d 1228, 1233

(4th Cir. 1996).

     In denying Kentucky National’s motion for judgment as a matter

of law on this issue, the district court stated as follows in its

March 28, 2006 written memorandum opinion and order:

     4
      Nance’s first response to Kentucky National’s argument on
this issue is to claim that Kentucky National failed to preserve
this issue for appellate review.      Our review of the record
convinces us otherwise.    Accordingly, we will review Kentucky
National’s challenge to the district court’s submission of the
punitive damages issue to the jury under our normal standard of
review, which is de novo. Bryant v. Aiken Reg’l Med. Ctrs. Inc.,
333 F.3d 536, 543 (4th Cir. 2003).

                               - 16 -
          Punitive damages are available if a plaintiff shows
     that his insurer acted with actual malice.       The West
     Virginia Supreme Court has explained that actual malice
     means “that the company actually knew that the
     policyholder’s   claim   was   proper,   but   willfully,
     maliciously and intentionally utilized an unfair business
     practice in settling, or failing to settle, the insured’s
     claim.” Syl. pt. 2, McCormick v. Allstate Ins. Co., 505
     S.E.2d 454 (W.Va. 1998). Defendant asserts that there
     was no “clear and convincing evidence” that it acted with
     actual malice, and the testimony adduced at trial showed
     that “the litigation was handled as other litigation in
     Knox County, Kentucky.” (Def. Mem. at 7).

          [T]he evidence presented at trial showed little or
     no action by defendant with respect to plaintiff’s claim
     for a very long time.       Though Diaz testified that
     liability was reasonably clear based on the accident
     report, nearly three years passed before any offer of
     settlement was made to plaintiff. Additionally, through
     witnesses like King and Bucci, plaintiff showed that
     defendant had engaged in similar conduct as a general
     business practice, which may be evidence of intent.
     State Farm Mutual Ins. Co. v. Stephens, 425 S.E.2d 577,
     584 (W.Va. 1992). Under these circumstances, the jury’s
     determination that defendant acted with actual malice is
     warranted.

(J.A. 1259-60).

     We hold the district court did not err in allowing the issue

of punitive damages to go to the jury.   The evidence presented at

trial, viewed in the light most favorable to Nance, shows that

Kentucky National, at a minimum, should have immediately offered

its policy limit of $100,000 to Nance in March 2002, when Kentucky

National learned that Liberty Mutual (insurer of the tractor-

trailer driven by Nance) had settled for its $50,000 policy limit.

Expert witness testimony by Conrad Diaz established that, at this

point in time (indeed, as early as February 2001), liability on the

                              - 17 -
part of Cordell was reasonably clear, and the fact that Nance’s

damages well exceeded Liberty Mutual’s $50,000 policy limit and

Kentucky National’s $100,000 policy limit was reasonably clear to

Kentucky   National.   Nonetheless,    Kentucky   National   waited    an

additional seven months to offer Nance even the paltry sum of

$25,000, all the while knowing that the accident had occurred

almost four years prior in December 1998.     Then, although nothing

had changed, Kentucky National took an additional five months to

offer Nance $50,000, just half of its policy limit.

     Additionally, several factual circumstances established by

Nance at trial, when viewed collectively and in conjunction with

the expert testimony of Conrad Diaz, establish actual malice:         (1)

Kentucky National took steps to place liability on the part of

Nance, when the circumstances clearly showed that Nance was not at

fault; (2)   Kentucky National refused to follow the advice of its

outside counsel to offer Nance $80,000 without any plausible reason

for so doing; and (3) the jury heard testimony from Attorneys King,

Tiano, and Bucci, demonstrating that it was Kentucky National’s

company policy to use unfair claims practices, to delay, and to

fight the payment of just claims.

     In conclusion, we hold the district court did not err in

denying Kentucky National’s motion for judgment as a matter of law

on the issue of punitive damages.

                              - 18 -
                                      III.

       Next,   Kentucky    National    challenges   the      jury’s   $850,000

punitive damage award as excessive in violation of the Due Process

Clause of the Fifth Amendment.         U.S. Const. amend. V.      Our review

of the record discloses that Kentucky National did not make such a

challenge below.     Accordingly, we are constrained to review for

plain error.     See In re: Celotex Corp., 124 F.3d 619, 630-31 (4th

Cir.   1997)   (adopting   plain   error     standard   of   review   used   in

criminal cases, as set forth in United States v. Olano, 507 U.S.

725 (1993), for application in civil cases when party failed to

preserve error below).

       Under the plain error standard of review, we may only exercise

our discretion to correct a forfeited error, if we: (1) find error;

(2) find the error is plain; (3) find the error affects the

substantial rights of the party or parties alleging the error; and

(4) after examining the particulars of the case, find the error

seriously affects the fairness, integrity or public reputation of

judicial proceedings.        Id.      We conclude that even if Kentucky

National could satisfy the first prong of Olano’s plain error test,

which we doubt, it certainly cannot satisfy the second prong of

establishing that the error is plain, which prong requires the

error to be clear or equivalently obvious.          Olano, 507 U.S. at 734

(explaining that for purposes of plain-error review, “‘[p]lain’ is

synonymous with ‘clear’ or, equivalently, ‘obvious’”).

                                   - 19 -
     In BMW of North Am., Inc. v. Gore, 517 U.S. 559, 562 (1996),

the Supreme Court set forth three guideposts for appellate courts

to consider de novo in reviewing a punitive damage award for

excessiveness:    “(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 the civil penalties authorized or imposed in

comparable cases.”5   State Farm Mut. Auto. Ins. Co. v. Campbell,

538 U.S. 408, 418 (2003) (citing BMW).          The Supreme Court has

further stated:

     “[T]he most important indicium of the reasonableness of
     a   punitive   damages   award    is   the   degree   of
     reprehensibility of the defendant’s conduct.” We have
     instructed courts to determine the reprehensibility of a
     defendant by considering whether: the harm caused was
     physical as opposed to economic; the tortious conduct

     5
      We note that BMW involved an excessiveness challenge to a
punitive damages award under the Due Process Clause of the
Fourteenth Amendment, while Kentucky National’s challenge to the
punitive damages award here is properly brought under the Due
Process Clause of the Fifth Amendment, given that the governmental
action challenged involved a federal tribunal. Johnson v. Hugo’s
Skateway, 974 F.2d 1408, 1411 n.1 (4th Cir. 1992) (en banc)
(punitive damages award arising from federal tribunal is properly
challenged under the Due Process Clause of the Fifth Amendment).
Because the parties agree that BMW applies in the Fifth Amendment
context, and there appears no sound reason to apply a different
excessiveness test in the Fifth Amendment context as opposed to the
Fourteenth Amendment context, Morgan v. Woessner, 997 F.2d 1244,
1255 (9th Cir. 1993) (“The two Clauses should be applied in the
same manner when two situations present identical questions
differing only in that one involves a proscription against the
federal government and the other a proscription against the
States.”), we apply BMW.

                                - 20 -
     evinced an indifference to or a reckless disregard of the
     health or safety of others; the target of the conduct had
     financial vulnerability; the conduct involved repeated
     actions or was an isolated incident; and the harm was the
     result of intentional malice, trickery, or deceit, or
     mere accident. The existence of any one of these factors
     weighing in favor of a plaintiff may not be sufficient to
     sustain a punitive damages award; and the absence of all
     of them renders any award suspect.

Campbell, 538 U.S. at 419 (internal citations omitted).

     Application of the first and most important BMW guidepost

unequivocally cuts in favor of the reasonableness of the jury’s

punitive damages award in favor of Nance.              The evidence at trial

established that the harm caused by Kentucky National’s actions and

inaction in handling Nance’s uninsured motorist claim was not

limited to economic harm.         Indeed, the jury heard testimony from

both Nance and his wife that Kentucky National’s tortious tactics

in   handling    Nance’s    uninsured       motorist    claim   caused   them

significant     emotional   and    mental    suffering,     including    being

frightened on their return trip from Lexington, Kentucky, upon

discovering they were under surveillance.              Nance’s emotional and

mental distress required treatment with prescription anti-anxiety

medication, which treatment continued through the time of trial in

the present case.    Kentucky National’s tortious conduct evinced an

indifference to or a reckless disregard of at least the emotional

and mental health of Nance and his wife.           The record also leaves

little doubt that Nance, as the target of Kentucky National’s

tortious conduct, had financial vulnerability.              The record shows

                                   - 21 -
that Kentucky National’s conduct involved repeated actions taken

with intentional malice, resulting in harm to Nance and his wife.

In short, each of the factors the Supreme Court has instructed us

to consider in determining the degree of reprehensibility of a

defendant supports the conclusion that the degree of Kentucky

National’s reprehensibility is indeed high.

     We conclude the second BMW guidepost cuts in favor of Nance

also.   Although the Supreme Court has refused to endorse a bright-

line ratio, it approved a 1 to 4 ratio of compensatory damages to

punitive damages in Pacific Mutual Life Insurance Company v.

Haslip, 499 U.S. 1, 18 (1991), which ratio is slightly higher than

we have in the present case of 1 to 3.64.        Id.    (approving $800,000

punitive damage award against life insurance company in fraud

case). Moreover, in a medical malpractice case, the Eighth Circuit

subsequently relied upon Haslip to remit a 1 to 10 ratio of

compensatory damages to punitive damages ($500,000 in compensatory/

$5,000,000   in   punitive)   to    a   1   to   4     ratio   ($500,000   in

compensatory/$2,000,000 in punitive) stating “the four-to-one ratio

approved . . . by the U.S. Supreme Court in Haslip [is an]

                                   - 22 -
appropriate       due   process      maximum.”6        Stogsdill    v.     Healthmark

Partners, L.L.C., 377 F.3d 827, 833 (8th Cir. 2004).

     Relying on Campbell, 538 U.S. at 426, Kentucky National argues

that we can only compare the ratio between the $33,000 (remitted

from $150,000) the jury awarded Nance to compensate him for his

out-of-pocket      damages     with    the     $850,000    in    punitive      damages,

because     the    remaining        $200,000    the    jury     awarded     Nance      in

compensatory      damages     was     based    upon    a   component      of     damages

duplicated in the jury’s punitive damages award.                   See id. (citing

Restatement (Second) of Torts § 908, Comment c, p. 466 (1977) (“In

many cases in which compensatory damages include an amount for

emotional distress, such as humiliation or indignation aroused by

the defendant’s act, there is no clear line of demarcation between

punishment and compensation and a verdict for a specified amount

frequently includes elements of both.”)).

     Based    upon      the   evidence    in    the    present    case,     we   reject

Kentucky National’s duplicative damages argument.                    “Compensatory

damages   are     intended     to    redress     the   concrete     loss       that   the

plaintiff has suffered by reason of the defendant’s wrongful

conduct.”     Campbell, 538 U.S. at 416 (internal quotation marks

     6
      In Stogsdill, the Eighth Circuit conditionally affirmed the
judgment of the district court, subject to the plaintiff’s
acceptance of its remittitur of the jury’s $5,000,000 punitive
damages award to $2,000,000. Id. at 834. If the plaintiff chose
not to accept the remittitur, the Eighth Circuit ruled that it
reversed and remanded for a new trial on liability and damages.
Id.

                                        - 23 -
omitted).   In contrast, punitive damages are “aimed at deterrence

and retribution.”     Id.     Our review of the record in this case,

discloses that the jury’s noneconomic award of compensatory damages

was not duplicative of its punitive damages award.              Rather, the

$100,000 the jury awarded Nance for emotional distress and the

$100,000 the jury awarded Nance for aggravation, inconvenience, and

annoyance was intended by the jury to compensate him for harm that

he   actually   suffered    and   was    proximately   caused   by   Kentucky

National’s tortious conduct.            Indeed, the district court aptly

summarized the evidence in this regard in rejecting Kentucky

National’s post-trial arguments that the jury’s award for emotional

distress was nothing more than an award of punitive damages and

that Nance presented no evidence to distinguish his claims of

emotional distress from his claims for aggravation, inconvenience,

and annoyance:

           [T]here appears to be ample evidence to support an
      award for aggravation, inconvenience and annoyance and a
      separate award for emotional distress.         Plaintiff
      testified that his experience in dealing with his
      insurance company was “always a fight.”          He was
      “bothered” that his insurance company was “blaming” him
      for the accident.       He ultimately entered into a
      settlement in the underlying claim because his insurer
      “had finally beat [him] down.” Certainly, this testimony
      evidences    possible    aggravation,   annoyance,   and
      inconvenience suffered as a result of defendant’s having
      engaged in unfair claims settlement practices.

           But plaintiff further testified to high levels of
      emotional distress brought on by the underlying
      litigation and by his precarious financial situation. He
      described his savings account as “exhausted” and
      testified that he was forced to obtain a loan against his

                                   - 24 -
     home, though the mortgage had been paid off, and to sell
     a great deal of his personal property. He testified that
     his family physician began treating him for stress in
     either 2000 or 2001, and that he now takes medication for
     stress.    The jury’s verdict is supportable by this
     evidence.

(J.A. 1258).     We also add that Nance testified at trial that prior

to Kentucky National’s misconduct, he had no more problems with

stress than a normal person.

     Finally, the last BMW factor -- the difference between the

punitive damages awarded by the jury and the civil penalties

authorized or imposed in comparable cases -- does not offer much

guidance one way or the other.     If West Virginia’s Commissioner of

Insurance finds that an insurer committed or performed unfair

claims settlement practices with such frequency as to indicate a

general business practice, the maximum civil penalty that can be

imposed under the West Virginia Unfair Claim Settlement Practices

Act is $250,000.     See West Virginia Code § 33-11-6(c).        However,

such a penalty does not take into consideration Kentucky National’s

malice as found by the jury in its handling of Nance’s claim.

Neither party has pointed to any other civil-penalty schemes for

our comparison.

     In   sum,   Kentucky   National   has   not   established   that   the

district court committed plain error by failing sua sponte to remit

the jury’s punitive damages award on the ground of excessiveness in

violation of the Due Process Clause of the Fifth Amendment.

                                 - 25 -
                          IV.

In conclusion, we affirm the judgment below.

                                               AFFIRMED

                        - 26 -