After a five-day trial and eight hours of deliberation, the jury of one man and six women ruled unanimously against Fireman's Fund Insurance Co., deciding that the California-based company acted in bad faith and breach of contract in denying Samantha Chilcote's insurance claim.
In January 2003, Chilcote, a 32-year-old salmon ecologist, suffered permanent brain injuries in a head-on car collision on U.S. Highway 2. She was not at fault in the accident, and her damages exceeded the amount of the other driver's policy limit.
$1.5 million in underinsured motorist benefits and $15,000 in medical pay. Still, the company refused to pay out her underinsured motorist coverage and delayed payment of her medical benefits until Jan. 17, 2008, cutting a check exactly five years from the date of the accident, on the same day as a final pretrial conference in her civil case.
Because jurors found the company guilty of actual malice, the verdict included $3.5 million in punitive damages, while the remaining $1.8 million was ordered for compensatory damages, such as medical bills, loss of past and future earning capacity, physical pain and suffering, mental and emotional injury and loss of established course of life. The jury also found the company guilty of violating Montana's Unfair Trade Practices Act, and awarded Chilcote $35,000.
“This was a very intelligent jury and they weren't fooled by any of the usual official excuses, and they got mad,” said Chilcote's attorney, James A. Manley of Polson.
While Chilcote's is the largest jury verdict for a bad-faith insurance claim in Montana, a larger insurance settlement occurred in April 2005, during a court-ordered conference in Billings. In that workers' compensation case, AIG Claims Service Insurance Co. agreed to a $6.7 million settlement with Ann and Kelly Bustell.
Chilcote's case was turned over to collections after Fireman's Insurance repeatedly refused to pay her medical expenses. The company's refusal to pay the medical bills delayed and interfered with Chilcote's medical treatment, according to the lawsuit.
“It was a classic case of David and Goliath, where they are just trying to wear you out,” said Chilcote, who has since earned her doctorate, and now works at the Flathead Lake Biological Station on Yellow Bay. “I was completely overwhelmed and I'm really thankful to the jury for doing the right thing, and to my legal team for standing behind me. It has been a really long, long hard road.”
Evidence presented at trial showed that Fireman's Fund Insurance Co.'s net assets in 2004, the same year Chilcote made the claim for her benefits, exceeded $9.9 billion.
“This insurance company went for five years before it paid any of my client's medical expenses,” Manley said. “They had absolutely no basis for not paying them. She is one of those people who did everything right, and would never file an exaggerated claim. Yet the insurance company argued that she was making this up.”
Chilcote now suffers from a short-term memory defect, which affects her performance at work, and is still undergoing treatment for her brain injury.
In addition to Fireman's Insurance, the lawsuit also names Richard Curtis, who was assigned by the company to adjust Chilcote's claim. The suit accuses Curtis of misrepresenting the amount of coverage available to Chilcote, and of ignoring her persistent claims for assistance throughout the years.
In the four years after Fireman's Insurance received notice of Chilcote's claim, the company obtained just one page of medical records to investigate and took no recorded statement from Chilcote or any other witnesses or health care providers, according to the lawsuit. They did not request an independent medical examination, and refused to pay the ongoing medical expenses, even after receiving Chilcote's collection notices.
Meanwhile, the company's own claim file characterizes Chilcote's case as having the “potential for high exposure” and says the woman had a “potentially serious head injury.”
At one point, Curtis asked for help from his superiors in dealing with the claim, stating, “I don't have any way to disprove the allegations,” according to the file.
Then, after reviewing a video of Chilcote's seizures - since the accident, she has difficulty controlling her head movements - Curtis wrote “obviously staged” in his file without citing any medical support for the allegation.
U.S. District Judge Donald W. Molloy must now rule on a pair of opposing post-judgment briefs and adjust the verdict amount to comply with Montana law. He can both add to and reduce the amount of the jury's verdict.
Attorneys for Fireman's Insurance have argued that Molloy should strike or reduce the punitive damages from the jury's verdict, and discount the attorneys' fees - approximately $90,000 - and the pre-judgment interest, which at 10 percent of Chilcote's underinsured motorist coverage comes to approximately $480,000.
Manley argued that Chilcote has a right to recover the full amount.
Molloy likely will not issue a decision for another week. The trial ran from March 28 until April 1 in U.S. District Court in Missoula.
“I just really hope that the jury's decision sends a clear message to insurance companies everywhere,” Chilcote said.
Reporter Tristan Scott can be reached at 523-5264 or at tscott@missoulian.com
Comment online
To comment on this story, go to Western Montana 360.
|
 |
 |
Add your comment now! Write your comment in the form below.
(Email address is for verification only. If you'd like to email a story, look for the link above)
Makena wrote on Apr 28, 2009 1:30 AM: