Court refuses to take another look at $5 million ruling

The high court refused to reconsider the case of William Powers vs. United Services Automobile Association and USAA Casualty Insurance Company, known collectively as USAA.

The decision follows a 4-1 ruling last July to uphold the $5 million punitive damage award for Powers, who lost his boat, the Mikimi, in April 1987.

Powers filed a claim for the loss of his boat with his insurance company, but USAA refused to pay saying that his misrepresentation of a "material fact" voided the insurance policy.

Powers was also charged for pursuing an allegedly false insurance claim. But a federal jury acquitted Powers on all charges in 1991.

The dispute arose because Powers had cut an exhaust hose in an effort to keep his boat from sinking in the Gulf of Mexico.

When Powers reported his loss to his insurance company, he said the exhaust hose had "deteriorated" at the hull, not that he had cut it. Powers said he used the phrase because he was concerned the company wouldn't understand he was trying to save the boat.

USAA continued to deny the claim and eventually Powers filed a lawsuit against the company, alleging breach of contract and bad faith.

A Las Vegas jury in 1994 found in Powers' favor and awarded the $5 million in punitive damages plus other damages totaling almost $400,000.

The Supreme Court majority found that USAA had acted in bad faith toward Powers and upheld the jury verdict.

USAA, joined by more than 20 governmental agencies and businesses, then asked the Supreme Court to reconsider its ruling, suggesting that the opinion, if allowed to stand, will have a detrimental impact on the fight against insurance fraud.

But the court denied the request to rehear the case, saying the facts supported the jury verdict.

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