Zenith Insurance Corporation vs. CA [G.R. No. 85296 May 1 !

199"#
Post under case digests, Commercial Law at Saturday, February 25, 2012 Posted by Schizophrenic ind

$acts% !n "anuary 25, 1#$%, pri&ate respondent Lawrence Fernandez insured his car 'or (own damage( with petitioner )enith *nsurance Corporation+ !n "uly ,, 1#$%, the car 'igured in an accident and su''ered actual damages in the amount o' P%,,-0+00+ .'ter allegedly being gi&en a run around by )enith 'or two /20 months, Fernandez 'iled a complaint with the 1egional 2rial Court o' Cebu 'or sum o' money and damages resulting 'rom the re'usal o' )enith to pay the amount claimed+ .side 'rom actual damages and interests, Fernandez also prayed 'or moral damages in the amount o' P10,000+00, e3emplary damages o' P5,000+00, attorney4s 'ees o' P%,000+00 and litigation e3penses o' P%,000+00+ !n September 2$, 1#$%, )enith 'iled an answer alleging that it o''ered to pay the claim o' Fernandez pursuant to the terms and conditions o' the contract which, the pri&ate respondent re5ected+ !n "une -, 1#$,, a decision was rendered by the trial court in 'a&or o' pri&ate respondent Fernandez+ !n .ugust 16, 1#$$, the Court o' .ppeals rendered its decision a''irming in toto the decision o' the trial court+ Issue% 2he propriety o' the award o' moral damages, e3emplarydamages and attorney4s 'ees is the main issue raised herein by petitioner+ &e'(% 2he award o' damages in case o' unreasonable delay in thepayment o' insurance claims is go&erned by the Philippine *nsurance Code, which pro&ides7

Sec+ 2--+ *n case o' any litigation 'or the en'orcement o' any policy or contract o' insurance, it shall be the duty o' the Commissioner or the Court, as the case may be, to ma8e a 'inding as to whether the payment o' the claim o' the insured has been unreasonably denied or withheld9 and in the a''irmati&e case, the insurance company shall be ad5udged to pay damages which shall consist o' attorney4s 'ees and other e3penses incurred by the insured person by reason o' such unreasonable denial or withholding o' payment plus interest o'twice the ceiling prescribed by the onetary :oard o' the amount o' the claim due the insured, 'rom the date 'ollowing the time prescribed in section two hundred 'orty;two or in section two hundred 'orty;three, as the case may be, until the claim is 'ully satis'ied9 Pro&ided, 2hat the 'ailure to pay any such claim within the time prescribed in said sections shall be considered prima 'acie e&idence o' unreasonable delay in payment+ *t is clear that under the *nsurance Code, in case o' unreasonable delay in the payment o' the proceeds o' an insurance policy, thedamages that may be awarded are7 10 attorney4s 'ees9 20 other e3penses incurred by the insured person by reason o' such unreasonable denial or withholding o' payment9 %0 interest at twice the ceiling prescribed by the onetary :oard o' the amount o' the claim due the in5ured9 and -0 the amount o' the claim+