The United States Court of Appeals for the Seventh Circuit affirmed a $47 million jury verdict against a national insurance carrier in July 2026, sustaining the verdict Rowe, Mercer & Hale won at trial on behalf of a commercial policyholder in a bad-faith coverage dispute. The appellate decision rejected the insurer’s challenges to the jury instructions, the damages award, and the sufficiency of the evidence supporting a finding of bad faith.
The Coverage Dispute
The client, a mid-market commercial enterprise, submitted a substantial insurance claim following a covered loss. The insurer accepted portions of the claim but withheld payment on the largest components, relying on coverage positions that the firm argued were unsupported by the policy language and inconsistent with the insurer’s own claims file. After extended efforts to resolve the dispute failed, Rowe, Mercer & Hale filed suit asserting breach of contract and, separately, bad-faith claims handling under Illinois law.
Trial
At trial, the firm presented evidence documenting the insurer’s conduct throughout the claims process, including internal communications showing that the carrier had identified a basis for full payment early in its investigation but elected instead to pursue a delay-and-deny approach. The firm’s damages expert presented a calculation reflecting the withheld policy benefits plus consequential damages the client sustained as a result of the delayed payment. The jury returned a verdict for $47 million, encompassing both components.
Seventh Circuit Appeal
The insurer appealed on multiple grounds, arguing that the bad-faith jury instruction misstated the applicable legal standard, that the consequential damages award was speculative, and that the evidence was insufficient to support a finding of bad faith. The Seventh Circuit rejected each argument. The court held that the instruction accurately reflected Illinois’s bad-faith standard, that the consequential damages were properly supported by the record, and that the trial evidence—particularly the internal claims documents—amply supported the jury’s finding.
Significance
Bad-faith insurance litigation requires both a command of insurance coverage law and the ability to translate an insurer’s internal claims handling into a compelling trial narrative. The Seventh Circuit’s affirmance validates both the trial strategy and the damages theory, and it sends a clear message that carriers who deploy bad-faith claims tactics in Illinois face substantial financial consequences.
Nancy Hale argued the appeal. Roxy Mercer led the trial team.