$60 million bad faith verdict in disability insurance case
While over half my practice involves truck accident litigation in Georgia, I have also done some disability insurance bad faith litigation and participated in one long products liability trial in Las Vegas. Therefore, this story of a disability insurance bad faith verdict in Las Vegas caught my eye.
Last week in federal court in Las Vegas, a jury returned unanimous verdicts against Paul Revere Life Insurance Company and UnumProvident Corporation (Unum Group) in the partial retrial of a lawsuit originally tried to verdict in 2004. In the 2004 trial, the jury awarded $1.6 Million in compensatory damages and $10 Million in punitive damages to G. Clinton Merrick in connection with the insurers’ denial of his disability claim. The insurers appealed and the punitive award was ultimately sent back for retrial before a new jury. Merrick v. Paul Revere Life Ins. Co., 500 F.3d 1007, C.A.9 (Nev.), 2007.
In last week’s verdicts, the jury ordered Paul Revere Life Insurance Co. to pay $24 Million and UnumProvident Corporation was ordered to pay $36 Million. The punitive award of $60 Million is six times the previous award that had been appealed by the insurers following the 2004 trial.
The plaintiffs were represented by Rick Friedman, author of two excellent books for trial lawyers, Rules of the Road and Polarizing the Case. He alleged that improper claims handling practices begun at Provident were brought to Paul Revere and influenced its claim handling with respect to Merrick’s claim both before the initial denial and afterward. These practices at the Unum Group of disabi lity insurers have been the subject of media scrutiny including expose’s on 60 Minutes and Dateline NBC as well as in multiple governmental investigations. According to Friedman, "the verdicts will keep coming until their practices change."
The Shigley Law Firm represents plaintiffs in wrongful death and catastrophic injury cases, and in insurance bad faith cases statewide in Georgia. Recently elected Secretary of the State Bar of Georgia, Ken Shigley has been designated as a "SuperLawyer" in Atlanta Magazine and one of the "Legal Elite" in Georgia Trend Magazine. He is a Certified Civil Trial Advocate of the National Board of Trial Advocacy, and former chair of both the Southeastern Motor Carrier Liability Institute and the Georgia Insurance Law Institute.