St. Louis, MO – August 30, 2025, The U.S. Court of Appeals for the Eighth Circuit has vacated a $6 million prejudgment interest award tied to a $27 million bad faith verdict against St. Paul Fire and Marine Insurance Company, a subsidiary of Travelers Insurance, in a high-profile case involving a wrongful conviction. The unanimous ruling, issued on August 28, 2025, in O’Brien v. St. Paul Fire and Marine Insurance Co., stems from a lawsuit filed by two Kansas City police officers, Richard Alt and Eric DeValkenaere, who claimed the insurer acted in bad faith by delaying coverage and refusing to pay policy limits in a 2019 wrongful death case.
The underlying case arose from the fatal shooting of Cameron Lamb by DeValkenaere, who was convicted of manslaughter but had his conviction overturned in 2022. Lamb’s family sued the officers and the Kansas City Board of Police Commissioners, securing a $27 million verdict in 2021, which St. Paul eventually paid in 2020 after initial delays. The officers’ subsequent bad faith claim against St. Paul proceeded to trial in November 2024, resulting in a jury award of $37.9 million, with $5.3 million allocated to the officers and the remainder to the Board. A Cole County Circuit Court judge added $6 million in prejudgment interest and court-related fees in a June 16, 2025, order, bringing the total to $43.8 million, one of the largest bad faith verdicts nationally for a wrongful conviction case.
The Eighth Circuit, in a decision authored by Judge Duane Benton, vacated the prejudgment interest, citing Missouri law under § 408.040.3, which requires a demand for payment to trigger such interest. The court found that the officers failed to provide a clear, written demand for a sum certain before filing the lawsuit, a prerequisite for prejudgment interest in tort actions. The panel upheld the $27 million compensatory award, finding sufficient evidence of St. Paul’s bad faith, including its failure to promptly settle within policy limits and its delay in defending the officers. However, it rejected the insurer’s argument that the entire verdict should be overturned, affirming the jury’s findings on liability.
Missouri law allows additional penalties in cases of vexatious refusal to pay insurance claims, including interest, attorney’s fees, and punitive damages up to 2% of the claim’s value. The court’s decision to vacate the $6 million interest award reduces the financial burden on Travelers but leaves the substantial compensatory damages intact. The plaintiffs’ attorney, Kathleen Zellner, called the verdict a landmark, stating, “This sends a clear message to insurers that wrongful conviction claims must be taken seriously.” Travelers, in a statement, expressed disappointment and is considering further appeals, potentially to the U.S. Supreme Court, arguing that the bad faith findings overstepped legal bounds.
The ruling has sparked discussion in legal circles, with posts on X highlighting its significance for insurance litigation. One user noted, “This case shows insurers can’t just drag their feet on claims—bad faith has real consequences,” while another criticized the vacated interest, arguing it weakens deterrence against insurer misconduct. The decision aligns with prior Eighth Circuit rulings, such as Macheca Transp. v. Phila. Indem. Co. (2013), where prejudgment interest was denied due to equitable considerations and unclear damage valuations.
As the case concludes, it underscores the complexities of bad faith claims and the high stakes for insurers in wrongful conviction lawsuits. The final judgment, now adjusted to exclude the $6 million interest, still represents a significant financial hit for Travelers and a victory for the plaintiffs in holding insurers accountable.
Sources: Insurance Business America, Law360, Missouri Courts, X posts