$8.645 million verdict
Plaintiff Jennie Hampton’s vehicle, valued at $10,300 and insured by State Farm Mutual Automobile Insurance Company, was stolen from her fiancé’s residence. At this time, Hampton’s fiancé lived with his half-brother and co-plaintiff, Marvin Vail. The following day Hampton reported the theft in person to both State Farm and the Olathe Police Department. Five days later, the vehicle was found burned and a total loss on a rural road in Miami County, Kansas. Subsequently, both the Olathe Police Department and the Miami County Sheriff’s Department investigated the theft and arson and determined that plaintiffs were not involved.
Despite two separate law enforcement agencies finding no evidence to implicate the plaintiffs, State Farm, through its Special Investigative Unit, conducted its own independent investigation and denied Hampton’s claim by concluding that she and her brother-in-law were guilty of insurance fraud. Through their mechanical experts, whom they paid over $400,000 in the previous 10 years, State Farm concluded that the engine was inoperable before the fire, and that plaintiffs were responsible for both the inoperability and arson.
Simultaneous with this independent investigation, Hampton filed a breach of contract claim against State Farm in Johnson County, Kansas. Shortly thereafter, State Farm, through its attorney, threatened the unwarranted criminal prosecution of Ms. Hampton if she didn’t “back off” from her claim. Regardless of this threat, Hampton continued to pursue her claim. Notwithstanding State Farm’s long-held conclusion that plaintiffs were guilty of a crime, it was not until after this threat that they instigated prosecution.
Two years from the date of the theft, the day any potential criminal statute of limitations were to run out, Vail and Hampton were charged with felony insurance fraud in Johnson County, Kansas. The basis for the charges derived entirely from information provided by State Farm and co-defendant, the National Insurance Crime Bureau (NICB).
It was later uncovered that during their independent investigation, State Farm’s Special Investigative Unit threatened an independent witness to solicit perjury, concealed and disregarded clear exculpatory evidence, reported what information they did collect in a false manner, and directed the conclusions of their mechanical expert.
State Farm, knowing they did not have access to the Johnson County district attorney’s office, then provided this one-sided and erroneous information to NICB, requesting instead that they refer the case to the Johnson County District Attorney for charging.
NICB followed State Farm’s instruction and, through its employee and a retired KBI agent who as an active agent worked side by side with the DA, presented the file to the Johnson County district attorney. Prior to this, the NICB had done absolutely no independent investigation to either confirm or deny the facts presented by State Farm. Rather, while presenting this information to the DA, NICB admittedly “watered down” exculpatory evidence, trying to instigate charging. Additionally, while meeting with the Johnson County DA, NICB withheld critical evidence by not informing the prosecutor that it was State Farm, not NICB, behind the investigation and referral.
After reviewing the information provided, felony insurance fraud charges were filed against both Hampton and Vail. Prior to this, neither Hampton nor Vail had any criminal history and, as a result of the charges, they were arrested and faced the extreme humiliation, anxiety and expense tied with being criminal defendants.
State Farm continued to work behind the scenes preparing the state’s witnesses for the preliminary hearing testimony, claiming privilege on documents sought by the prosecutor, attempting to keep crucial evidence from being inspected by plaintiffs’ criminal attorneys, closely monitoring the criminal trial and providing well-prepared witnesses to testify at trial.
After a 10-day criminal trial, both Hampton and Vail were acquitted of all charges. Rather than showing remorse for instigating the wrongful prosecution, State Farm continued to not only proclaim Hampton and Vail’s guilt, but also to deny Hampton’s claim.
After the acquittals, Hampton’s breach claim in Johnson County, Kansas, against State Farm was dismissed and refiled with her and Vail’s claims for malicious prosecution and the tort of outrage against State Farm and the NICB. After a three-week trial in Jackson County, but before verdict, defendant NICB entered into a high-low agreement with a high of $110,000 and low of $100,000 for Vail and $160,000 and $150,000 for Hampton.
The jury returned a verdict for plaintiffs on all counts, and after a post-trial hearing the court entered judgment against NICB. The court also entered judgment against State Farm for $200,000 in actual damages for Hampton and $175,000 for Vail. For her breach claim against State Farm the court entered judgment in favor of Hampton for $251,700 in attorney fees.
Additionally, the court entered judgment in favor of Vail and Hampton individually for their punitive claims against State Farm in the amount of $4 million each.
$2 million settlement
Convenience store and paintball facility co-owners Russell Baker and Shirley Heathman obtained $1 million of liability insurance coverage for their partnership activities. In November 2010, a patron of Camo Valley Paintball injured his eye and filed a lawsuit against Baker and Heathman.
Despite insuring Baker and Heathman under the policy, their insurer denied coverage, claiming the policy covered only a convenience store. With their insurer having abandoned them, a large judgment was entered against Baker and Heathman in favor of the injured person.
Following the judgment, Baker and Heathman retained attorneys Kip Robertson and Jim Frickleton to pursue claims against their insurer for acting in bad faith. Robertson and Frickleton ultimately settled the case on Baker and Heathman’s behalf for $2 million, which was twice what the insurance company would have paid had it honored its insurance contract. As a result of this settlement, Baker and Heathman were able to satisfy their obligations to the injured party.