Plaintiffs awarded $34.3M verdict against State Farm

A jury in Jefferson City awarded a class of plaintiffs $34,333,495 in damages in their suit against State Farm Life Insurance Co., which alleged the company systematically overcharged them for their universal life insurance policies.

The jury returned the verdict June 6, according to plaintiff’s attorney Norman Siegel of Stueve Siegel Hanson in Kansas City. It followed two hours of deliberations and three days at trial.

The case was that of named plaintiff Michael G. Vogt, filed against State Farm in 2016 in the U.S. District Court for the Western District of Missouri.

Vogt represents a class of approximately 24,000 current and former owners of universal life insurance policies issued in Missouri.

Prior to the trial, Siegel said U.S. District Judge Nanette K. Laughrey ruled that State Farm had violated its own policy as a matter of law. The jury was asked to determine whether that violation caused damages to its policyholders, and if so, to assess those damages.

In a statement, Siegel said the case is an example of the “the little guy taking on a huge company and winning.”

“The most egregious aspect of these cases is that there is no reasonable way for a policyholder to know that they’re being overcharged because the overcharge is hidden behind a complex, actuarial ‘cost of insurance rate’ that is indecipherable to the average person,” he said.

Siegel said the only way to find those overcharges is to hire a lawyer and actuary to investigate the rate and compare it to the proper rate to know if one is being damaged.

“You can be overcharged for decades without knowing, which is what the jury found here,” he said.

John Schirger, of Miller Schirger in Kansas City, was co-lead counsel with Siegel. He said the plaintiffs were pleased with the verdict.

“The jury took in some complex actuarial evidence but ultimately did the right thing, and if the verdict is upheld, 24,000 Missourians will benefit,” he said.

Schirger said the two firms have been filing and litigating similar cases against insurers for nearly 10 years. He agreed with Siegel’s assessment about the complexities of policies and their effects on the consumer.

In Vogt’s case, he said State Farm’s charges, which were not permitted by the policy, ate away at the cash value of the class members’ life insurance policies. He noted the life insurance policies included interest-bearing accounts.

“As your cash value is depleted, those charges would otherwise grow and bear interest,” he said. “But they were taken by the insurance company.”

Jeremy Root of Stinson Leonard Street in Jefferson City represented State Farm. He could not be reached for comment.

In a statement, State Farm said it “respectfully disagrees” with the jury verdict and plans to appeal.

“We believe we honored our ongoing commitment to our customers by providing quality service and a product that is competitively priced,” the statement said. “Despite this setback, we are confident that we will prevail upon appeal.”