Insurance Fraud, Bad Faith and Outrage Case Results

Physicians Mutual Insurance Company Class Action in Alabama, Mississippi, Texas

  • $23 Million 

Plaintiffs entered into insurance contracts with Physicians Mutual Insurance Company which contained a rider that provided certain outpatient sickness and accident benefits. The plaintiffs alleged that Physicians Mutual wrongfully failed to pay insurance claims for the plaintiffs and other class members.

Physicians Mutual is an insurance company based in Omaha, Nebraska that sells numerous types of insurance products throughout the U.S. Beginning in 1993, Physicians Mutual began selling a supplemental insurance product in Alabama called the “Outpatient Plus Plan,” which is a supplemental insurance product comprised of a hospital indemnity policy and a combination of two or more riders. One of the riders attached to the hospital indemnity policy was the outpatient benefit rider, which pays a fixed benefit of $100.00 each time a policyholder makes a claim that meets the requirements of the rider.

The Plaintiffs entered into insurance contracts with Physicians Mutual which contained a rider that provided certain outpatient sickness and accident benefits. In the lawsuit, the plaintiffs, individually and on behalf of all class members, alleged that Physicians Mutual wrongfully failed to pay insurance claims.

Through the discovery process, the plaintiffs gathered significant documentation to support the allegations. Physicians Mutual paid $23 million to class representatives and class members residing in the states of Alabama, Mississippi, and Texas.

This case was handled by partner Chris Hellums.

Faye Gilmer v. Crestview Memorial Funeral Home (Circuit Court of Jefferson County, Alabama)

  • $3.5 Million Verdict

When Faye Gilmer lost her husband of 40 years, she contracted with Crestview to perform the funeral service. After the funeral, Faye obtained information indicating that she had been defrauded and lied to about certain aspects of the funeral and burial. A lawsuit was ultimately filed on her behalf. The allegations in the lawsuit centered around fraudulent conduct related to the embalming of Mr. Gilmer’s body as well as an improper burial.

In May of 2010, the case was tried to a verdict and Faye Gilmer was awarded $500,000 in compensatory damages and $3 million in punitive damages. Attorneys Chris Cochran and Lee Pittman handled and tried the case.

Roger Presley vs. Burns & Wilcox (Circuit Court of Chambers County, Alabama)

  • $1.6 Million Verdict

Roger Presley purchased a policy of insurance for his business, a lounge located in Chambers County, Alabama. Burn & Wilcox was the insurance broker. Presley alleged that the broker wrongfully cancelled his policy and then failed to reinstate it. Moreover, after learning of his error, the broker then lied to cover up his wrongdoing. Specifically, the broker stated that he had issued a “desk binder” that would provide coverage until a new policy could be written. A new policy was written, but, unfortunately, there was an incident at Presley’s business for which Presley was sued. When Presley made a claim for coverage, Burns & Wilcox informed him that there was no policy of insurance or desk binder. Presley incurred approximately $100,000 in legal fees successfully defending himself in the underlying lawsuit.

Chris Cochran and Lee Pittman tried the case for Presley against Burns & Wilcox. The jury returned a verdict for Presley and ordered Burns & Wilcox to pay $600,000 in compensatory damages and $1 million in punitive damages.

Leo Brown v. Acceptance Insurance Company (Circuit Court of Perry County, Alabama)

  • $1.45 Million

Leo and Gloria Brown operated G & L Grocery, a convenience store. Leo purchased a commercial general-liability insurance policy for the store from Acceptance Insurance Company. Subsequently, the Browns were informed that R.G. and M.D. were planning to burglarize the store. They returned to their store later that night to apprehend any suspected burglars.

While hiding in the pump house located next to the convenience store, Leo and Gloria heard noises coming from outside. As Leo left the pump house, Gloria heard the store’s burglar alarm. She left the pump house to find S.S. in front of the store. As Leo walked around to the front of the store, he was involved in an altercation with S.S. While trying to escape the altercation with Leo, S.S. turned towards Gloria and was shot in the abdomen.

As a result of this encounter, S.S. filed a tort action alleging that Leo and Gloria Brown had “negligently and/or wantonly” injured him. The Browns sent a letter to Acceptance requesting that they defend the Browns in the civil lawsuit filed by S.S. Acceptance later informed the Browns that it would not be defending them in the lawsuit because coverage had been disclaimed under the “intentional acts” and “assault and battery” exclusions of the general-liability policy.

The Browns brought suit against Acceptance seeking a judgment declaring that Acceptance was required to defend and indemnify them in the lawsuit filed by S.S. After a judgment was entered against the Browns in the lawsuit filed by S.S., the Browns amended their complaint, adding that Acceptance had breached its contract with them and in bad faith breached its duty to defend and indemnify them. The case was tried and the jury returned a verdict for $1.45 million. The case was handled by attorney Chris Hellums.

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