Two sued State Farm, claiming malicious prosecution

Court rules insurer must pay $8 million

By MARK MORRIS
Kansas City Star
Posted December 06, 2005


A Jackson County judge on Monday awarded more than $8 million in damages to two Kansas residents who contended they were maliciously prosecuted by State Farm Insurance.

Circuit Judge Charles E. Atwell said he would award $4,462,000 to Jennie Hampton of Olathe and $4,175,000 to her brother-in-law Marvin Vail of Edgerton. Each judgment included $4 million in punitive damages against the insurance company.

Attorney James P. Frickleton, who represented Hampton and Vail, said his clients were gratified by the decision.

“We felt that a significant punitive award was justified, particularly given State Farm’s size and conduct,” Frickleton said. “We’re very pleased with the court’s decision and feel it’s a continuing vindication of Ms. Hampton and Mr. Vail.”

An attorney representing the company and a spokesman for State Farm could not be reached for comment Monday afternoon. However, Frickleton said he was preparing for further litigation.

“I would be shocked if they didn’t appeal this as far as they can,” he said.

In September, a Jackson County jury assessed $400,000 each to Hampton and Vail after finding they were the victims of malicious prosecution by State Farm and a national organization that investigates insurance fraud. The National Insurance Crime Bureau settled with the two after trial, however. A decision on the amount of punitive damages was left to Atwell.

The case began in December 1997 when Hampton’s Toyota 4Runner was reported stolen and found burned in rural Miami County, Kan. State Farm declined to pay a $10,000 claim on the vehicle and, through the crime bureau, sent the case to Johnson County prosecutors, who charged Hampton and Vail with felony insurance fraud.

In her claim, Hampton stated that the Toyota’s engine had been in “excellent” condition, but witnesses told investigators that before the theft Hampton had mentioned engine problems and was looking for a new engine.

A witness also allegedly heard Vail say that he had towed the vehicle to where it was burned.

A Johnson County jury acquitted Hampton and Vail when the case went to trial in May 2001. The two then sued State Farm in Jackson County for malicious prosecution and breach of contract.

At the trial this fall in Kansas City, attorney Michael McCausland, who represented State Farm, told jurors that the Johnson County prosecutor, not the insurance company, made the decision to prosecute Hampton and Vail. McCausland also noted that evidence showed that the vehicle’s engine had been damaged before the fire, which supported statements from other witnesses.

In his ruling Monday, Atwell adjusted the jury’s $400,000 awards to account for the settlement with the crime bureau and a $250,000 cap on noneconomic damages under Kansas law. He also ruled that should an appeals court find that a $5 million cap applies to the punitive damages of both Hampton and Vail, then the total punitive award would be $5 million.

© Copyright 2005 Knight Ridder



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