For about five years, insurance agent James Richard Perry kept collecting $50 monthly premiums from Carolyn Whittaker for a $25000 life insurance policy that had lapsed. She sued Mr. Parry, of course, after she learned of the deception, but also sued the insurance company, Southwestern Life, for failing to investigate the agent’s past before hiring him. The jury awarded twenty million dollars in compensatory damages–and then topped that off with $1.6 billion in punitives. Alabama state law will reduce the punitive damages award to “only” sixty million, but the underlying “compensatory” damages award is beyond unreasonable–as is the idea of punitive damages against the life insurance company for what is, at worst, negligence that cost Ms. Whittaker a few thousand dollars. (AP, Feb. 6; “Macon County Woman Wins Billions [sic] In Insurance Case”, WSFA, Feb. 6).
Runaway Alabama jury
For about five years, insurance agent James Richard Perry kept collecting $50 monthly premiums from Carolyn Whittaker for a $25000 life insurance policy that had lapsed. She sued Mr. Parry, of course, after she learned of the deception, but also sued the insurance company, Southwestern Life, for failing to investigate the agent’s past before hiring […]
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