January 27, 2009

Lexington, Kentucky Bad Faith Insurance Attorney: Urban County Sues Insurance Company For Failing to Pay Sex Abuse Settlements

In Lexington, the Urban County Government is suing an insurance company that they claim has not paid five plaintiffs the sex abuse settlements that they are owed. The insurance bad faith lawsuit, filed against the Insurance Corp of Ireland—now called Icarom—accuses the company of failing to respond to the claims. The insurer has not revealed whether it will deny the claims or pay the plaintiffs their settlements.

From March 1, 1982 through July 1, 1985, Urban County had an insurance policy with the Ireland-based insurer. The general liability policy covered public officials from liability. Lexington officials say they sent the insurance company deposition and records pertaining to the child molestation civil lawsuit in 2005.

The settlements stem from a sex abuse lawsuit involving former clients of the Micro-City Government program for disadvantaged youth. Some 200 people have filed sex abuse lawsuits accusing program director Ron Berry of sexually and physically abusing them. Berry ran the program from 1969 to 1997. In 2000, Berry was convicted of 12 counts of sodomy and served a three-year prison term for his crimes.

The city of Lexington settled one of the civil lawsuits, filed by four plaintiffs, for $450,000. A second lawsuit was settled with 17 plaintiffs for $2.4 million. Another sex abuse lawsuit is still pending.

Urban County wants to be reimbursed for litigation and settlement expenses for five of the plaintiffs who claim they were sexually abused during the period of time that the county was insured by the Irish-based insurer. The county is also seeking unspecified damages from the insurance company.

This is not the first lawsuit filed against an insurance company over the Ron Berry lawsuits. In 2001, Fayette County sued three insurance companies. The lawsuits were eventually settled even though the insurance companies had argued that their policies did not cover sex abuse by city officials.

City sues insurer over Berry abuse case, Kentucky.com, January 22, 2009

Lexington sues insurer over unpaid settlements, Fort Mill Times, January 22, 2009

Related Web Resources:
Lexington-Fayette Urban County Government

Lexington Fayette Urban County Government v. Icarom, PLC, Justia

January 12, 2009

Family of Teen Leukemia Patient Sues Cigna for Wrongful Death After Insurance Company Refuses to Pay for Her Liver Transplant

The family of a 17-year-old leukemia patient who died in 2007 while waiting for a liver transplant is suing CIGNA Corp. for wrongful death. Nataline Sarkisyan’s family says the insurance company’s initial refusal to pay for her liver transplant caused medical delays that lead to her death.

Following a public protest, Cigna eventually agreed to pay for Nataline’s procedure, but by then, the lawsuit contends that it was too late. She died within hours after the insurer agreed to pay for the transplant.

In their complaint, the plaintiffs are accusing Cigna of unfair business practices, breach of contract, delaying and rejecting legitimate claims, and purposely inflicting emotional distress.

Cigna, however, says the company was never obligated to pay for the transplant because the treatment was experimental, unproven, and not covered under the family’s insurance plan. Cigna says that if Nataline had survived and the procedure had taken place, the insurer was going to pay for it out of the company's own pocket.

Diagnosed with leukemia since age 14, Nataline underwent a bone marrow transplant in November 2007. Complications following the procedure, however, caused liver failure. Nataline’s family asked Cigna to cover her liver transplant, but the insurance company rejected their request. Four doctors appealed to Cigna to reconsider.

Insurance Bad Faith
If you believe that your insurance company was unjustified in rejecting a claim, you may have grounds to file a “bad faith” claim. A Kentucky unfair claims practices lawsuit allows you to pursue damages owed to you under your insurance policy, as well as personal injury compensation and punitive damages.

Calif. teen's family sues Cigna over transplant, Associated Press, December 26, 2008

Leukemia Victim's Family Blames CIGNA For Delays, Courant.com, December 30, 2008

Related Web Resources:


Cancer Girl's Lawyer Blames CIGNA For Her Death, CBS, December 20, 2007

August 15, 2008

$16 Million Bad Faith Judgment Against Allstate is Upheld

An appeals court has upheld the $16 million bad faith judgment against Allstate Insurance Co. for the insurer’s failure to settle a claim for the $50,000 limit on an auto insurance policy. Virginia and Edward Johnson filed an auto accident claim against Allstate after they were seriously injured in a motor vehicle crash caused by Wayne Davis Jr., an Allstate policyholder, in March 2000. Edward spent 35 days in the hospital for his injuries, while Virginia stayed for 40 days. Their medical expenses for their hospital stay cost $320,000.

Although they initially agreed to settle for Davis's $50,000 policy limit with Allstate, the insurance company took 6-months to respond to their claim and by then the 60-day statutes of limitations for accepting the insurance claim had passed. When they were unable to reach a car crash settlement with Allstate, they sued Davis for personal injury.

Davis and the Johnsons reached a settlement agreement. As part of settlement, the couple agreed not to collect the $5 million judgment against Davis in return for giving the Johnson’s 90% of his bad faith insurance claim against Allstate for their refusal to settle his case with them.

Together, the Johnsons and Davis sued Allstate not only for its bad faith refusal to settle but also for equitable garnishment. Allstate had disputed whether the Johnson’s injuries were a result of the accident with Davis.

The Missouri Court of Appeals's decision upholds the verdict that a jury had awarded to them in 2006: $5.8 million in compensatory damages and $10.5 million in punitive damages.

Bad Faith Claims
Unfortunately, insurance companies have been known to wrongfully refuse to pay claims that they should cover. This goes against Kentucky law, which mandates that insurers exercise good faith when dealing with policyholders or others filing claims.

If you were injured in an auto accident an your insurance company or the insurer of the liable party’s insurance company wrongfully denied your claim, you may be entitled to damages from the insurance company for their bad faith practices. A Louisville personal injury lawyer with experience in dealing with both injury cases and bad faith claims can help you.

Missouri Court Upholds $16 Million Bad Faith Award Against Allstate, InsuranceJournal.com, July 30, 2008

Appeals court upholds $16 million verdict against Allstate, KansasCity.com

Related Web Resource:
State Insurance Laws, Badfaithinsurance.org

July 10, 2008

CNN Investigation Reports on Allstate and State Farm Efforts to Pay Minimal Amounts to Victims Injured in Minor Auto Accidents

Following an 18-month investigation into the way the nation’s largest auto insurance companies handle claims involving minor motor vehicle accidents, CNN last year reported that there is a good possibility that the two largest insurers—State Farm and Allstate—will challenge any minor medical claim and offer to pay only a small fraction of all accident costs.

The news network says that the confidential documents it examined revealed that these actions are motivated by profits—papers that the companies are determined to keep private. The insurers reportedly execute this strategy by dragging victims of minor car collisions into court for cases lasting years in the name of supposedly fighting fraud.

When given the opportunity to respond to the allegations, both companies refused to engage in a discussion. State Farm said it addressed each claim on its own merits and that generalizations that it had adopted consultant recommendations like other insurance companies was inaccurate. The consultant the insurer was referring to, McKinsey & Co., works for both State Farm and Allstate.

One former Allstate claims agent, Shannon Kmatz, says that the company trained her to treat minor accident cases as fraudulent and to offer victims as little as possible. She says she has offered injury victims of minor accidents payments as low as $50.

Former insurance company insider Jim Mathis says the insurers’ strategy involves three D’s: delaying, denying, and defending the claim. The end profits for insurers that limit accident payments have reportedly been huge.

One victim involved in a rear-end accident, Ann Taylor, says that State Farm only offered her $2,000, even though her medical and recovery costs and lost wages related to her herniated disc muscle tears ended up costing $15,000.

Another injury victim initially offered $15,000 by Allstate spent years fighting her case in court until a jury awarded her $167,000 plus interest. According to industry insiders, however, 80-90% of accident victims do not contest what insurance companies offer them.

In Kentucky, our Louisville personal injury law firm helps clients file bad faith claims against insurers that refuse to pay accident claims or make unreasonably low offers to injury victims.

Related Web Resources:

Auto insurers play hardball in minor-crash claims, CNN.com, February 9, 2007

AAJ Report: Ten Worst Insurance Companies in America, July 9, 2008 (PDF)

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