Deals & Suits: Cigna Insurance Lawsuit
Deals & Suits: Cigna Insurance Lawsuit
May 31, 1999
By Angela Ward
STEVE
KILLION V. CIGNA
INSURANCE CO. OF TEXAS
Jim Orr
of Hurst and Joe Fisher II of Beaumont won a $1.4
million verdict May 20 in a personal-injury suit
against Cigna Insurance Co. of Texas.
The verdict, which came after a
week-long jury trial before 136th District Judge
Milton Gunn Shuffield of Beaumont, awards $545,000
in actual damages and $900,000 in punitive damages.
Because the injury to plaintiff Steve Killion
occurred before Rule 21.21 of the Texas Rules
of Civil Procedure was amended in 1995, the actual
damages should be trebled for a judgment of $1.65
million plus prejudgment interest, Orr says. Shuffield
has not signed a judgment and has not ruled on
the defendant's motion for judgment notwithstanding
the verdict.
According to the pleadings, the
plaintiff, Steve Killion, sued after wrangling
with Cigna for five years over whether the company
would cover back surgery for a herniated disc
he suffered in 1986. Killion had a workers' compensation
policy with Cigna at the time of the injury, and
was awarded lifetime medical coverage by the Industrial
Accident Board.
Killion put off the surgery until
1994, at which time Cigna denied coverage because
a representative read in Killion's medical report
that his back hurt when he took care of his horses,
and determined it was a nonwork injury, the pleadings
state. Killion sued in 1995 for breach of the
duty of good faith and fair dealing and deceptive
trade practices. At trial, the plaintiff presented
an internal Cigna memo suggesting that the denial
of coverage was based on the horse reference.
Orr argued that this memo was written the same
day Cigna received the medical report, so the
company did not have time to investigate the claim
before denying it.
Shareholders Gary Scarzafava and
Annelie Menke, of Houston's Scarzafava,
Smith and Menke, represented Cigna. Scarzafava
says the company denies any wrongdoing and plans
to appeal.
Orr, an associate with Hurst's Note-boom and Gray,
and Fisher, an associate with Provost I Umphrey,
represented Killion.
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