A recent article in Insurance Journal, “Ohio Supreme Court: Attorney Fees Distinct from Punitive Damages” reports that the Ohio Supreme Court ruled that attorney fees are distinct from punitive damages and that public policy does not prevent an insurance company from covering legal fees on behalf of an insured. In Neal-Pettit v. Lahman, Allstate Insurance argued that the automobile policy does not cover awards of attorney fees. Allstate argued that the “attorney fee award is an element of the punitive damages award because both are made in cases of malicious conduct.” Allstate’s policy doesn’t cover punitive damages, therefore the award for attorney fees is not covered either, the insurer reasoned.
In the underlying case, Kimberly Neal-Pettit filed suit against Linda Lahman for compensatory and punitive damages due to personal injuries sustained in a car accident. The complaint alleges, Lehman struck Neal-Pettit’s car when she was intoxicated. At trial, the jury returned a “verdict against Lahman for compensatory damages totaling $113,800 and punitive damages totaling $75,000. In addition, the jury awarded attorney fees for Neal-Pettit at $46,825 and $10,085 in expenses. After Allstate declined to pay punitive damages and attorney fees, Neal-Pettit filed suit. The Eighth District rejected Allstate’s argument, holding that attorney fees are “conceptually distinct” from punitive damages. The Ohio justices affirmed the lower court’s ruling, citing previous case law that established that although “an award of attorney fees may stem from an award of punitive damages, the attorney fee award itself is not an element of the punitive damages award.”