Zenith Insurance vs CA

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Zenith Insurance vs CA
- Fernandez insured his car for "own damage" with P. Then, the car
figured in an accident and suffered actual damages in the amount of
P3,640.00.
- After allegedly being given a run around by Zenith for 2 months,
Fernandez filed a complaint with the RTC of Cebu for sum of money and
damages resulting from the refusal of Zenith to pay the amount claimed.
- Pre-trial was scheduled but was later on terminated.
- Fernandez presented his evidence. P, however, failed to present its
evidence in view of its failure to appear in court, without justifiable reason,
on the day scheduled for the purpose.
- P filed a petition for certiorari with the CA but was denied.
- MR was denied for lack of merit. Hence, this case.
P’s contention: It offered to pay the claim of Fernandez pursuant to the
terms and conditions of the contract but he rejected.
RTC: In favor of Fernandez with award of damages.
Issue: WON the propriety of the award of moral damages, exemplary
damages and attorney's fees was valid?
Held:
Yes. The award of damages in case of unreasonable delay in the
payment of insurance claims is governed by the Philippine Insurance
Code.
Sec. 244. In case of any litigation for the enforcement of any policy or
contract of insurance, it shall be the duty of the Commissioner or the

Court, as the case may be, to make a finding as to whether the
payment of the claim of the insured has been unreasonably denied or
withheld; and in the affirmative case, the insurance company shall be
adjudged to pay damages which shall consist of attorney's fees and
other expenses incurred by the insured person by reason of such
unreasonable denial or withholding of payment plus interest of twice the
ceiling prescribed by the Monetary Board of the amount of the claim
due the insured, from the date following the time prescribed in section
two hundred forty-two or in section two hundred forty-three, as the case
may be, until the claim is fully satisfied; Provided, That the failure to pay
any such claim within the time prescribed in said sections shall be
considered prima facie evidence of unreasonable delay in payment.
It is clear that under the Insurance Code, in case of unreasonable
delay in the payment of the proceeds of an insurance policy, the damages
that may be awarded are:
1) attorney's fees;
2) other expenses incurred by the insured person by reason of such
unreasonable denial or withholding of payment;
3) interest at twice the ceiling prescribed by the Monetary Board of the
amount of the claim due the injured; and
4) the amount of the claim.
As regards the award of moral and exemplary damages, the
reason for P’s failure to indemnify Fernandez within the two (2)-month
period was that the parties could not come to an agreement as regards the
amount of the actual damage on the car. The amount of P10,000.00
prayed for by private respondent as moral damages is equitable.

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