CUNA Mutual Assessed $6.2 Million at trial for Bad Faith Claim Denial
CUNA refuses to pay disability benefits to woman dying of cancer
Rapid City, SD. On June 12, 2009, a twelve person federal jury from the
Western District of South Dakota returned its verdict of $6.2 million
against CUNA Mutual Insurance Society for bad faith, including punitive
damages which require a showing of malice, fraud, or oppressive conduct.
The jury reached its decision after hearing evidence that CUNA refused to pay Teri Powell's
claim for disability coverage, even after knowing that Powell was dying of cancer
and was in hospice care. Powell died 30 days after her testimony in which she
explained her terminal status to CUNA.
The Federal jury also heard evidence of 18 other policyholders
that CUNA treated in ways similar to their dealings witth Powell.
Powell's attorneys, Mike Abourezk and Alicia Garcia, explained in closing arguments
that the investigation of CUNA's activities has taken three years to complete,
and no one outside the company had ever been allowed to see the documents
revealed to the jury.
Only by refusing to settle and taking the case to trial could the
documents become public records, and the truth exposed, said Abourezk after the trial.
Teri Powell taught high school Spanish in Rapid City, South Dakota for 27
years, before taking medical retirement in 2002 due to rheumatoid arthritis,
osteoarthritis, progressive joint disease, spinal scoliosis, hypertension,
PTSD, and auto immune disease.
Despite her condition, Powell continued trying to support herself at various
part time jobs until she was diagnosed with cancer in 2005, when she finally
decided to make a claim under her disability insurance with CUNA.
In testimony given just 30 days before her death, Powell explained
what she hoped to get from her lawsuit. She said she wanted the company to
"come clean and treat their clients with respect," and "if they are doing this to me,
they are doing it to a lot of people, maybe some that are even worse off than me.
So if I can do something to help, this is my chance."
Powell looked into the camera and asked the company, "Just how sick
do I have to be, to be disabled under CUNA?"
CUNA's lawyers cross-examined Powell, suggesting she
could still work as a "pet sitter," or make and sell hand-made hats, and after her testimony
CUNA still refused to pay.
Teri Powell died exactly 30 days after she gave that testimony.
After her funeral CUNA did concede she had been unable to work for limited periods of time before her death.
Powell's friend, Sharon McElgunn, promised Teri she would continue the case
against CUNA. She kept her promise, even though it took three years to do
Members of the Federal Court jury worked for two weeks, hearing evidence of
how CUNA handles claims, before returning its decision to assess
$6.2 Million in damages. CUNA has recently requested a new trial, saying both the federal judge and the jury that decided the case
acted improperly, and the jury verdict should be nullified.
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