Arbella was found to have committed unfair insurance practices against both its insured Anthony Caban, and the person injured by Caban in an auto accident, Angelina Dattilo. Datillo’s attorney sent Arbella a 30-day policy-limit demand letter, to which Arbella responded after five months by advising that it was seeking to determine if there were other claims likely to arise from the accident. Two months later, Arbella offered to pay its $ 20,000 policy limit in exchange for a release, which offer was rejected. Dattilo had filed suit at the expiration of the 30 day period stated in the demand letter. Shortly thereafter, Arbella informed Caban that he had exposure in excess of the policy limits, but incorrectly indicated that no formal demand had been received, and did not mention the policy-limit settlement demand. Dattilo and Caban reached a stipulated settlement of the suit for $ 450,000, and Caban assigned to Dattilo his rights against Arbella. The trial judge found that Arbella had failed to promptly respond to the demand letter and failed to promptly settle the case in which liability was clear, and that the failures were “willfully reckless, and in that sense, intentional.” Arbella was therefore subject to double damages on the $ 20,000 claim by Caban (plus double legal fees and expenses); and was subject to multiple damages on the $ 430,000 in excess of the policy limits, with interest running from the date suit was filed. The case was remanded solely to determine whether the damages should be doubled, or tripled.

The buyers were obliged to pay a series of installments prior to fulfillment of the contract by Jinse Shipbuilding Co Ltd. In event of a “termination, cancellation or recission” of the contract, the buyers were entitled to a repayment of the pre-delivery installments. The dispute arouse because there was confusion as to whether the bond covered “all sums due […] under the Contract” (paragraph 3 of the bond) or only in case of “termination, cancellation or rescission of the Contract” (paragraph 2 of the bond). The latter clearly does not include insolvency as a trigger for the bond, while the former can be interpreted either way. The Court of Appeal ruled in favor of Kookmin Bank that insolvency does not trigger the bond, and consequently, the buyers were not entitled to repayment of the pre-delivery installments.