Class-Action Victory Satisfies WomanBy: Peter Harriman Argus Leader An Omaha insurance company will pay out about $20 million to victims of catastrophic illness and accidents because of a class action lawsuit filed by a Yankton woman. But the woman, Kay Bergonzi, will get less than one-tenth of 1 percent of that. A $10,000 settlement won't propel her into a new tax bracket. As she does every day, Bergonzi, 51, will spend the day on the phone for a credit card firm trying to collect on delinquent accounts. She could have settled for hundreds of thousands of dollars but chose not to. "I explained to her there were two different ways to go," said her lawyer, Mike Abourezk of Rapid City. "In an individual suit, quite frequently in cases like this there is a very strong chance the insurance company will pay you a lot of money to go away quietly. "In a class action, there isn't any going away quietly. It's all got to be out in the public. It is longer, harder, more expensive and more difficult, and you won't get nearly as much money. The only upside is if you win, a lot of people get paid." Bergonzi chose to file a class action lawsuit against a backdrop of being a single mother with an 18-year-old son still at home, and as a breast cancer victim who had lost a sister to cancer within a year of her own diagnosis and her father to the disease before that. "I just thought it was the right thing to do," she said. "I thought about it long and hard, and it was just going to benefit so many people and cancer patients. Who could say not to that? The lawsuit was settled in U.S. District Court in Sioux Falls on Tuesday, with Judge Karen Schreier presiding. Central States Health and Life Co. of Omaha (CSO) will immediately pay $7.5 million to 1,236 claimants nationwide. During the next 10 years it will pay approximately $9.6 million more than it would have to future claimants, based on a recalculation of its payment formula. Richard Kizer, CSO president, said the class action lawsuit resolved discrepancies in the interpretation of a supplemental medical policy the company first sold about 15 years ago. "With medical advances, it was just not an easy policy to interpret. We spent months working with lawyers on both sides to come up with language and a formula that provides and answer to policy holders," Kizer said. "Medical treatments are vastly different than at the time this policy was written. That, in large part, created disagreement." The settlement Tuesday was the largest CSO has ever entered into, Kizer said. But it does not threaten the company's future, he said. CSO has done business in South Dakota about 70 years and still insures about 1,200 in the state with the supplemental medical policy. Abourezk got involved with CSO in 1997, when his sister Carol, terminally ill with cancer, was seeking treatment in Houston. She was covered by a CSO policy her husband bought, but it paid only cents on the dollar, Abourezk said. "I then located several other people with the same policy who had filed similar claims and found that the company was doing the same thing to each of them," he said. Bergonzi knows how this could happen. "When I was going through chemo(therapy), I was getting some of the insurance letters back that I was not qualified for this or that," she said. "I thought it was kind of weird, but I did not pursue it at the time. Chemotherapy just zaps your energy." Her experience with the supplemental policy was probably typical. In the late 1990s, "where I was working, the health insurance plan was kind of a low-end plan, and I was not happy with the deductibles," she says. "Here comes this little policy around. I thought, 'This should be great. It will cover my co-pays and give me a little extra cash if I have to miss any work.' "I was really happy when our employer offered that policy to us. I had it six months before I needed to use it. I think it started in July and I was diagnosed in December 1998." In pursuing his sister's case against CSO, and in light of all the other plaintiffs it brought to light, Abourezk thought about filing a class action lawsuit, but legal consultants he talked to in Seattle convinced him it would take years to litigate. His sister died in 1999, and he put her case on hold to concentrate on the cases of four individual. |
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