Case Overview
Case Type: Product Liability / Insurance Bad Faith
Outcome: $1,800,000 jury verdict; $12,008,854.54 bad faith judgment
Client: Suzanne Bombar, industrial worker
Court: Court of Common Pleas, Lackawanna County; affirmed on appeal by the Superior Court of Pennsylvania (2007)
Citation: Bombar v. West American Insurance Co., 932 A.2d 78 (Pa. Super. 2007)
Background
On March 15, 1995, Suzanne Bombar was working at Lord Label, Inc. in Dunmore, Pennsylvania when a forklift struck her from behind and amputated her leg. She never heard it coming. The backup alarm had been disconnected.
Ms. Bombar filed suit against Upright Materials Handling, Inc., the company that sold the forklift to her employer and later installed the backup alarm. A Lackawanna County jury found Upright negligent and awarded $1,800,000. The judge then added delay damages, bringing the total to $2,393,458.65.
What Happened
The forklift was manufactured by Linde, Inc., a German company, and shipped to its U.S. subsidiary Baker, Inc., which sold it to Upright in Avoca, Pennsylvania. Lord Label purchased the forklift from Upright without a backup alarm or strobe light. At Lord Label’s request, an Upright employee later installed an aftermarket alarm, but routed the wiring along the outside of the roll bar rather than through its center, leaving the wires exposed and vulnerable to disconnection. On the day of the accident, the forklift operator drove in reverse through a plastic curtained opening that blocked his view and struck Ms. Bombar.
Lord Label employees disconnected the alarm on multiple occasions because of the noise. It was disconnected on the day of the accident. Upright had been called to reinstall it several times before the injury occurred.
The jury found Upright liable in negligence.
The Insurance Fight
In March 1994, Upright had purchased a commercial general liability insurance policy through First Insurance Center, an agency acting on behalf of Ohio Casualty Insurance Company. The policy that actually covered the claim was held by West American Insurance Company, a subsidiary of Ohio Casualty. This only became clear during litigation, when the parties filed a formal stipulation correcting the record and amending the caption accordingly.
After the verdict against Upright, West American refused to defend or pay its policyholder, citing a products-completed operations hazard exclusion in the policy. Adjusters were reassigned mid-claim. Letters to Upright were misaddressed. No reservation of rights letter was ever issued. Ohio Casualty learned of the accident in 1995 but took no meaningful action. When the complaint reached the insurer in 1999, the denial letter was sent to Bombar’s counsel, not to the policyholder.
On March 12, 2001, Upright filed a Declaratory Judgment Action against Ohio Casualty seeking defense, indemnification, and damages for bad faith in handling the insurance claim. Suzanne Bombar intervened as the real party in interest, arguing Upright was covered under the commercial liability policy. On October 18, 2002, Upright assigned all of its rights under the policy to Ms. Bombar.
The trial court granted summary judgment in Ms. Bombar’s favor on all counts.
The Verdict
Following a bench trial, as required by Pennsylvania law for bad faith cases, the court entered judgment against West American totaling $12,008,854.54:
- Jury verdict and delay damages to Ms. Bombar: $2,393,458.65, plus interest of $1,513,260.00
- Punitive damages (four times the compensatory verdict): $7,200,000.00
- Compensatory damages to Upright for bad faith harm: $700,000.00
- Attorney’s fees and costs to Upright: $91,212.50
- Attorney’s fees and costs to Ms. Bombar for the bad faith claim: $110,923.39
West American appealed, filing three separate notices of appeal. Two were quashed before the case reached argument. The Superior Court of Pennsylvania heard the remaining appeal and affirmed the judgment in full on July 26, 2007. West American’s subsequent petition for reargument was denied on October 1, 2007.
Legal Strategy
This case was tried by firm founder Robert W. Munley, who represented the injured worker and pursued the insurer on bad faith and coverage grounds after Upright’s rights under the policy were assigned to Ms. Bombar. His work on the bad faith claim established nationally recognized standards for what insurance companies are legally required to do when a policyholder makes a claim.
The legal team advanced two distinct theories. First, the products-completed operations hazard exclusion did not apply because Upright’s negligent installation of the alarm was never truly completed within the meaning of the policy, and a failure-to-warn claim arising from that negligent work remained covered. The trial court agreed, and the Superior Court affirmed.
Second, the team demonstrated that West American’s conduct constituted bad faith under Pennsylvania’s insurance bad faith statute. The insurer had no reasonable basis for denying coverage, failed to conduct any meaningful investigation, never notified its own insured of the denial of coverage in writing, and never issued a reservation of rights letter, all while a $1.8 million verdict stood against its policyholder. The punitive damages award, set at four times the compensatory verdict, reflected the court’s conclusion that West American’s conduct was not a mere mistake but a deliberate failure to meet its legal and contractual obligations.
Why It Matters
The jury verdict in the underlying case established Upright’s liability for negligent installation and failure to warn, holding a seller and servicer of industrial equipment responsible for the safe condition of products it put into service.
This case stands as one of the landmark decisions in Robert W. Munley’s body of work. Bombar v. West American Insurance Co. established standards for what constitutes bad faith in insurance claim handling that continue to be cited in Pennsylvania and federal courts. The case has been referenced in subsequent decisions including Braun v. Walmart Stores (Pa. Super. 2011) and Petrosky v. Allstate Fire and Casualty (E.D. Pa. 2015), both addressing the standard for insurer bad faith conduct. Those standards apply when insurers deny claims without reasonable basis, fail to investigate, and leave policyholders without the defense they were promised.
For Suzanne Bombar, it meant that the company paid to protect Upright could not simply walk away. It established that policyholders have legal recourse when insurers fail to honor their obligations.
