Firm Wins $60 Million Verdict Against Unum Group

Las Vegas, NV

A federal court jury in Las Vegas returned unanimous verdicts today against Paul Revere Life Insurance Company and UnumProvident Corporation (Unum Group) in the partial retrial of a lawsuit originally tried to verdict in 2004. In the 2004 trial, the jury awarded $1.6 Million in compensatory damages and $10 Million in punitive damages to G. Clinton Merrick in connection with the insurers’ denial of his disability claim. The insurers appealed and the punitive award was ultimately sent back for retrial before a new jury. Merrick v. Paul Revere Life Ins. Co., 500 F.3d 1007, C.A.9 (Nev.), 2007.

In today’s verdicts, the jury ordered Paul Revere Life Insurance Co. to pay $24 Million and UnumProvident Corporation was ordered to pay $36 Million. The punitive award of $60 Million is six times the previous award that had been appealed by the insurers following the 2004 trial.

As vice president at General Foods in the 1970s, Merrick was instrumental in the development of the Kool-Aid Man and Country-Time Lemonade advertising campaigns and had thereafter become a successful venture capitalist. Merrick was a founder and managing director of Consumer Venture Partners of Greenwich, CT, and also a founding investor and director of Samuel Adams Brewing Co. He purchased a Paul Revere disability insurance policy in 1989. In 1991, Merrick began to suffer the affects of Lyme disease with chronic fatigue syndrome, though it went undiagnosed for a period of time. His work performance suffered and he tried to continue working. By 1994 he could not meet the grueling business travel and analytic requirements of a venture capitalist and he moved to Summerlin, NV, for his health. He put his insurer, Paul Revere on notice of claim in 1994 and filed his claim in 1995. Paul Revere accepted liability in 1995 and continued to pay benefits until December 1996. At that time, Paul Revere was in the process of being acquired by Provident Companies, Inc. which in 1999 became, UnumProvident Corp., which subsequently changed its name to Unum Group in 2007.

Merrick’s lawyers alleged that improper claims handling practices begun at Provident were brought to Paul Revere and influenced its claim handling with respect to Merrick’s claim both before the initial denial and afterward. These practices at the Unum Group of disability insurers have been the subject of media scrutiny including exposés on 60 Minutes and Dateline NBC as well as in multiple governmental investigations. “The jury heard evidence of a fifteen year scheme to cheat disabled people,” said Rick Friedman, Merrick’s lead trial attorney. According to Friedman, “The verdicts will keep coming until their practices change.”

For further details, click on any underlined item above. This includes the prior 9th Circuit Opinion discussing the facts in detail, the actual jury verdicts against the respective defendants and the biographical information of plaintiff’s lead trial counsel, Rick Friedman. To see the Judgment entered by the court on July 3, 2008, click here.

Merrick’s attorneys included Rick Friedman, Jeff Rubin and James Hertz of Friedman | Rubin and Julie Mersch of Las Vegas.