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Alabama woman awarded $1.6 billion in insurance fraud case
Last Update: 2/6/2004 7:12:26 PM
TUSKEGEE, Ala. (AP) - A jury awarded $1.6 billion to a woman who paid for a nonexistent life insurance policy for nearly five years, a verdict that could be sharply reduced under a state law capping such damage judgments.
The Macon County jury's verdict Thursday went against Southwestern Life Insurance Co. and agent James Richard Perry, who were ordered to pay $10 million each in compensatory damages and $800 million each in punitive damages to Carolyn Whittaker.
She sued over a $25,000 policy and $50 monthly payments that totaled just under $3,000.
A spokesman for Texas-based Southwestern Life said the verdict was "clearly inappropriate" and that the company would appeal.
Whittaker's attorney said he expects "a substantial sum" to be upheld. A 1999 Alabama law limits punitive damages in most cases to three times the amount of compensatory damages, or $60 million in Whittaker's case.
Her attorney, Jock M. Smith, said Southwestern Life was negligent in not investigating Perry's past, which he said included a $5 million verdict in Macon County in 1988 for similar misconduct with another insurance company.
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