Court hits State Farm with $145 million judgment

Sunday, October 21, 2001

SALT LAKE CITY -- The Utah Supreme Court reinstated a $145 million jury award against State Farm for underpaying insurance claims, cheating customers and destroying crucial documents. A lower court found State Farm had even investigated the sex life of a company whistleblower.

The case involved State Farm's refusal to pay $50,000 to settle a claim involving a 1981 Utah car accident that killed one driver and left another driver disabled.

The insurer wouldn't settle even though one of its investigators determined a State Farm policyholder, Curtis Campbell, was at fault for the accident.

Campbell, 83, was found at fault by a trial jury and held liable for $130,000 more than his $50,000 policy limit. State Farm eventually paid all the damages, including Campbell's personal liability, but Campbell still sued, alleging its refusal to settle was part of a companywide scheme to limit payments on claims.

A Utah jury awarded Campbell and his wife $145 million in punitive and $2.6 million in compensatory damages.

Those amounts were later reduced on an appeal to $25 million in punitive damages and $1 million in compensation.

Friday's 4-1 decision by the Utah Supreme Court reinstated the punitive award to $145 million and kept the compensation at $1 million.

Paul Belnap, State Farm's Utah lawyer, said the company was considering its options and could appeal. The company denies any improper dealings.

Respond to this story

Posting a comment requires free registration: