In an action arising from defendant insurer’s failure to promptly pay a claim on a policy insuring the life of plaintiff’s mother when she drowned in a boating accident a few days after paying the delinquent premiums on the policy, the trial court’s judgment finding that the insurer was only responsible for paying the face amount of the policy was affirmed and the denial of any statutory penalties or sanctions under Supreme Court Rule 137 was not an abuse of discretion in the absence of evidence that the insurer was guilty of intentional misrepresentation or bad faith.
An insured mother died in a tragic accident just a few days after she had fortuitously paid up the delinquent premiums on a life insurance policy payable to her three-year-old daughter. An innocuous mix-up at the insurance company over that last-minute payment precipitated an avalanche of litigation. Although the company offered to pay on the policy, the daughter’s father and grandfather, both attorneys, refused the offer and demanded substantial penalties from the company over the brief payment delay. Along the way, the grandfather’s law firm took one-third of the girl’s insurance policy proceeds as a contingency fee. The court agreed with the two chancellors who heard the case below that the insurance company was only responsible to pay the face amount of the policy and therefore affirmed the decision in favor of the insurer.