Arizona Jury Awards $6.5 Million To Plaintiff In Disability Insurance Bad Faith Lawsuit Against Country Financial Companies

On September 8, 2017, a jury from the U.S. District Court of Arizona entered a verdict for over $6.5 Million against Country Life Insurance Company and CC Services, Inc., for bad-faith termination of their insured's disability insurance claim. Country Life and CC Services are part of the Country Financial family of insurance and financial companies out of Bloomington, Illinois. The case is captioned McClure v. Country Life Insurance Company and C.C. Services, Inc. (both doing business as Country Financial) (Case Number: CV-15-2597-PHX-DLR).

The claimant was in his early 40s when he suffered a traumatic brain injury and then developed severe depression leading to multiple hospitalizations for suicidal ideation. McClure's disability insurance company, Country Life, approved payment of monthly benefits initially, but then unexpectedly terminated the claim a year later. It did so without gathering any of McClure's treating physicians' records for eight to nine months leading up to the claim termination. In its letter terminating benefits, Country Life told McClure that it had carefully reviewed extensive medical records and determined there was no evidence of any cognitive or mental health impairments. McClure was unaware that Country Life did not bother to gather or review recent medical records from his physicians, even those who had certified his disability. The termination of his benefits was financially and emotionally devastating to McClure and his family.

McClure's attorneys argued that Country Life took deliberate measures to terminate his claim, blatantly ignoring evidence that he was disabled. The Jury agreed, and found that the termination was done with an "evil mind" and with conscious disregard of the harm McClure would likely suffer.

Following three weeks of hearing evidence, the jury deliberated over the course of two days and found Country Life and C.C. Services acted in bad faith and consciously disregarded the risk of harming its insured. The jury awarded $5 Million in punitive damages, $2.5 Million against each company.

Attorneys Steve German, Anita Rosenthal, and Steve Dawson - from the law firms of Adelman German and Dawson & Rosenthal - represented McClure. According to attorney Steve German, the litigation was difficult for his client, who suffers disabling depression and anxiety. Mr. German said his client persisted with the hope that in doing so others would not suffer as he, his wife, and two young daughters did, because of an insurer putting profits ahead of its insureds.

Of note, Country Life Insurance Company, was recently sanctioned in a separate lawsuit in the U.S. District Court of Arizona, for withholding evidence, falsely asserting the attorney-client privilege, and manipulating the record to intentionally create a false narrative. In that case, the Court struck Country Life's Answer, entered a default judgment, and ruled:

[Country Life] and its counsel withheld relevant and discoverable evidence by essentially ignoring requests for production of documents and then by frivolously asserting the documents were privileged. They misrepresented the facts surrounding their conduct during discovery by asserting they had conducted reasonable searches in response to Plaintiff's requests when they had not. They misrepresented the facts of the case by redacting highly relevant information and making false assertions of privilege. They then presented false deposition and hearing testimony to align with their fabricated account of what occurred. By doing so, Defendant and counsel sought to prevent Plaintiff and the Court from learning the truth about the circumstances surrounding the termination of Plaintiff's disability claim, thereby misleading Plaintiff and the Court into accepting their narrative. The Court finds that the evidence amply demonstrates that Defendant's and counsels' misconduct was willful and done in bad faith. See Leon, 464 F.3d at 958 (holding that the district court must make a finding of "willfulness fault or bad faith" for dismissal or default to be proper).

Sell v. Country Life Insurance Company, 189 F.Supp.3d 925 (D. Ariz. 2016). The Sell matter was resolved earlier this year.

[For additional information regarding the verdict in McClure v. Country Life, CC Services, Inc., you can reach Steve German at 480-478-1185 at the Scottsdale, Arizona law firm of Adelman German, or Anita Rosenthal or Steve Dawson from the Sedona, Arizona law firm of Dawson & Rosenthal at 928-282-3111. The Dawson & Rosenthal law firm also served as Plaintiff's counsel in Sell v. Country Life Insurance Company, for questions unique to that matter.]

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