Underwriters at Lloyd’s, London v. The Narrows, L. & L. Enterprises - Supreme Court of the States of Alaska (Rabinowitz, Burke, Matthews and Compton JJ.) - 29 January 1993

Underwriters’ failure to comply with discovery order resulted in defence being struck out and jury awarding $60 million punitive damages - Whether “striking-out” order should be vacated

The Narrows, a bar, restaurant and residence owned by Jeanne L. Lindley and Carson E. Lindley, was destroyed by fire in May 1989. After their proof of loss claim was rejected, the Lindleys (“the insureds”) sued underwriters at Lloyd’s, London, alleging breach of contract and a “bad faith” refusal to pay on their claim. In August 1990 a Superior Court Judge compelled the underwriters to produce inter alia their “bad faith” claims files and the financial statements of their members. In November the insureds moved for sanctions, arguing that the underwriters had failed to comply with the court’s August order. The Judge granted the insureds’ motion for sanctions and struck out the underwriters’ answer, resolving all liability in the insureds’ favour.