October 5, 2000
Circuit Court gives plaintiff $5M verdict
By Richard Massey, Staff Writer, The Clarksdale Press Register Copyright 2000, The Clarksdale Press Register. Printed by Permission.

An insurance company that declined to pay its share of a collision claim was taken to Coahoma County Circuit Court and socked with $5 million in punitive damages.

United States Fidelity & Guaranty (USF&G), a national insurance agency, was sued by plaintiff Elizabeth Knight of Jackson, who alleged bad faith on a claim stemming from a 1988 collision on U.S. 61 in Clarksdale.

Jurors ruled unanimously in Knight's favor last week.

The bad faith law suit had nothing to do with the actual damages, such as medical bills and loss of work, said plaintiff's attorney Ralph Chapman. A separate trial for those claims will be heard in the future, Chapman said.

The suit - and the $5 million in punitive damages - were based on USF&G's alleged conduct in handling Knight's claim.

While Knight was driving northbound through Clarksdale on U.S. 61, she was hit head-on by motorist Kenneth Boyett, who claimed that the brakes went out on his vehicle, the suit alleged.

Knight's vehicle was totaled. She suffered serious injuries in the accident and was hospitalized for an extended period, according to court documents.

Boyett had liability insurance with State Farm that covered up to $25,000 in damages, court documents said. Knight had a $300,000 USF&G policy which covered claims for damages caused by under-insured and uninsured motorists.

She asked that USF&G allow her to accept the $25,000 offered by State Farm or for USF&G to pay her the $25,000 offered by State Farm.

Her request would have cost USF&G $275,000, with the balance of the $300,000 coming from the $25,000 paid by Boyett's policy.

But USF&G would not pay the claim. Instead, USF&G wanted Knight to drop her $275,000 claim against USF&G and assign her rights against Boyett and State Farm to USF&G, the suit alleged.

USF&G, furthermore, wanted to cut Knight a $25,000 check and then seek reimbursement for the $25,000 from State Farm.

"They (USF&G) basically wanted to settle the entire law suit with State Farm's money," said Chapman. "She (Knight) would have been better off without insurance because she wasn't getting what she paid for."

Circuit Court Judge Al Smith heard the case which featured three witnesses and lasted three days.

USF&G defense attorney Greg Copeland of Jackson left a message on a reporter's voice mail, but was unavailable when The Press Register returned his call over the course of two days.

The case will probably be appealed for review by either the state Supreme Court, or the state Court of Appeals, said Chapman.

In either case, it would be another two years before the case will be settled.

In the event of an appeal, USF&G would be assessed a 15 percent penalty - $750,000 - on the punitive damages and interest would accrue on the punitive-penalty amount, said Chapman.

"They (punitive damages) are assessed against that company to keep that company and others from doing that to people," said Chapman.

A similar suit against USF&G is pending in Bolivar County Circuit Court, according to court records.

Bolivar County deputy sheriff Charles Anderson was involved in an accident in a county patrol car. USF&G, which wrote the policy on the county's fleet, declined to pay claims associated with that accident, the suit alleges.

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- Clarksdale Press Register