A federal appeals court has upheld a bad faith verdict and substantial awards to a disabled man victimized by UnumProvident Corporation and its subsidiary Provident Accident and life. Although portions of the damages awards had been reduced by the trial judge after the trial, the substantial sums of $3 million for punitive damages and $1.2 million for emotional distress and other harm were upheld and must now be paid by Unum to Bruce Leavey , the disabled claimant.

In early 2001 Leavey filed his long term disability insurance claim, along with proof that he was receiving appropriate care. His claim had initially been approved and paid on a monthly basis, as required under his disability insurance policy. However, the insurance company, UnumProvident (the parent company handling the disability claim), terminated the benefits.

When Leavey took Unum to court, he obtained a decisive victory. Because Arizona law applied, he was able to seek more than just the monthly disability benefits. The jury ruled in his favor on disability, but he was also awarded “bad faith” damages of $15 million in punitive damages and $4 million in compensatory damages for emotional distress and other harm. Based upon certain legal principles that limit the size of these awards, the trial judge reduced the awards to $3 million in punitive damages and $1.2 million in compensatory damages.

In ruling in Leavey’s favor on the appeal the Court concluded that Unum acted “not only in bad faith but also ‘with an evil mind’”, and that Unum had “sought to influence the opinions of independent medical examiners”. Furthermore, the Court found that Unum and Provident “misrepresented the opinions of those examiners”. In addition, the court found that “Unum. . . . subjected Leavey’s claim to a roundtable review, the sole purpose of which was to close expensive claims; that Unum sought to influence the opinions of independent medical examiners; that Unum misrepresented the opinions of those independent medical examiners in its letter to Leavey announcing the closing of his claim; and that Unum knew that Leavey was a vulnerable individual who suffered from anxiety and depression, was recovering from a serious drug addiction, and was at a high risk of relapse”.

This entry was posted on Tuesday, December 23rd, 2008 at 9:52 am and is filed under Recent Jury Verdicts. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.