Jurors explain stunning $37 million verdict against Assurant Health
Last Friday, as six Boulder County jurors tried to determine punitive damages in the case of a woman whose health insurance company refused to pay her medical bills after a devastating auto accident, one figure loomed large: $150 million.
Assurant Health refused to pay Jennifer Latham's medical bills after this 2005 auto accident.
That's the amount that Time Insurance, also known as Fortis and Assurant Health, saved in benefits not paid over five years by rescinding thousands of policies, contending that the insured misrepresented information on their applications -- even if that information had nothing to do with the claim submitted. In the case of Jennifer Latham, who was badly injured in 2005 when her car was broadsided by a meth dealer fleeing cops, Assurant denied her claim because ambiguous information about a uterine condition and an ER visit for a panic attack wasn't disclosed in the application she submitted months earlier.
As first reported here, the jury decided after six hours to award Latham and her two youngest children $37.3 million, including economic and punitive damages -- the largest bad-faith judgment against an insurance company in Colorado history.
But some jurors wanted to award even more.
Jury foreman Dan Vela says he was in favor of awarding Latham $150 million as a way of punishing the insurance company. "They didn't have a leg to stand on," says Vela, a general manager for a seamless gutter company. "I hope we sent a message back to them that this was wrong."
Jurors contacted by Westword say that Assurant failed to prove that Latham deliberately misrepresented her health on her application or that the company had conducted a reasonable investigation before revoking her coverage. Testimony indicated that the company's "rescission panel" reviewed more than a hundred cases in two hours -- "68 seconds apiece," as Latham attorney Marc Levy put it in his closing argument.
"We had to determine who was lying," says juror Denise Kaatz, a production manager for a Louisville apparel company. "Most of their witnesses seemed dishonest, defensive and just showed a basic lack of humanity. It was kind of frightening."
"I was blown away by just how much they acted like robots," adds Vela.
Latham, who suffered brain trauma in the accident and still faces possible future surgeries for injuries to her leg and jaw, testified that life has become a daily struggle without health insurance. "She did nothing wrong," Vela says. "She got put in the worst situation anyone could be put in."
Levy argued during the two-week trial that the company had declined to change its rescission process despite a fine from the Colorado Division of Insurance and other complaints. The jury was aware of a similar lawsuit in South Carolina but wasn't told that case resulted in a $10 million punitive damage award against Time.
"We realized that $37 million is a lot of money," says Kaatz. "But we felt we had to send a message. Anything less, and the message might not have been heard by Time, since they've continued with this practice for the past five years despite other lawsuits."
A spokesman for Time Insurance said that the company doesn't comment on litigation. A request for comment from defense attorneys received no response. The Latham case and the practice of rescission in the health insurance industry is the subject of an upcoming Westword feature.