A jury in Alabama awarded $2.4 million to an insurance agent in a fraud case he brought against 11 companies, all affiliated with Farmers Insurance Group.
Robert "Kyle" Morris sued Farmers after it terminated him in 2009 -- taking his book of business and forcing him to have no contact with his previous customers for a year -- because of Morris' employment at the Morris Insurance Agency, which was owned and operated by his father.
Morris told the court that Farmers had assured him that his connection with his father's agency "was not a problem and did not violate any rules, procedures or policies of Farmers," according to the lawsuit.
"In this case, the evidence that Farmers intentionally made false statements to Kyle to induce him into becoming a Farmers agent was overwhelming," said J. Brian Duncan Jr. of Cunningham Bounds LLC in Mobile, Ala., who tried the case with his partner, Lucy E. Tufts.
After about two and a half years of the affiliation, Farmers terminated Morris due to "an unacceptable conflict of interest," according to Duncan.
Following the termination, because of an employment agreement, Farmers took more than 200 customers and renewal premiums from more than 300 Farmers policies that Morris had sold, worth more than $625,000 a year in premiums.
Duncan argued that Farmers knew it had a conflict-of-interest policy since at least 2003, and that the company fraudulently told Morris that his association with his father's agency would not be a problem.
The jury on Feb. 8 agreed, awarding Morris $600,000 in compensatory damages and $1.8 million in punitive damages.
"Farmers Insurance strongly disagrees with the verdict. We are considering our options regarding an appeal," said Mark S. Toohey, head of media relations for Farmers.
--By Anne Freedman
April 12, 2013
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