Kansas City, Mo. State Farm Insurance has been ordered to pay more than $8 million to a tow truck driver and his sister-in-law who were acquitted of insurance fraud after being accused of faking the theft of a vehicle.
Jackson County Circuit Judge Charles Atwell on Monday said he would award $4.5 million to Jennie Hampton, of suburban Olathe, Kan., owner of the Toyota 4Runner reported stolen in 1997, and $4.2 million to Marvin Vail, 33, of Edgerton, Kan.
"We felt that a significant punitive award was justified, particularly given State Farm's size and conduct," said attorney James P. Frickleton, who represented Hampton and Vail. "We're very pleased with the court's decision and feel it's a continuing vindication of Ms. Hampton and Mr. Vail."
Hampton and Vail sued State Farm Insurance and the National Insurance Crime Bureau, an organization that investigates insurance fraud.
Jurors in September awarded $800,000 in damages to the pair after finding they were the victims of malicious prosecution. But the decision on punitive damages was left to Atwell.
The crime bureau settled with the pair after trial.
Dick Luedke, spokesman for Bloomington, Ill.-based State Farm, said Tuesday that the company could not comment on the pending litigation.
After Hampton's vehicle was found burned in rural Miami County, Kan., in December 1997, State Farm refused to pay her claim. The company accused her of lying in claiming that the Toyota's engine was in "excellent" condition before the reported theft, citing reports from several witnesses who told investigators she had talked about engine problems and was looking for a new engine a few weeks before the event.
One witness was reported to have overheard Vail, who worked as a tow-truck driver, stating that he was involved in towing the vehicle to where it was burned.
Through the insurance crime bureau, the case was forwarded to the district attorney's office in Johnson County, Kan., which filed charges. Hampton and Vail were acquitted in May 2001.
Frickleton said State Farm and the insurance crime bureau relied on incomplete, hearsay evidence in seeking the fraud prosecution.
The attorney for State Farm argued at trial that an analysis showed that the engine was damaged before the fire.
The award Atwell ordered included an adjustment to account for the settlement with the crime bureau.