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Unum's appeal backfires in Nev. (Worcester Telegram & Gazette, 4 July 2008)

04-07-08 11:12

Age: 2 days

BY: LIANE KUFCHOCK

Jury says $60M must be paid

Unum Group and its Worcester-based Revere Life Insurance Co. were

ordered by a Nevada jury to pay $60 million after appealing a 2004 verdict of

$11.6 million to a venture capitalist who sued over the denial of a disability

claim, said a lawyer representing the plaintiff.

A six-member jury reconsidered the evidence and decided June 26 that the

punitive damages should be six times what the first jury ordered, lawyer Rick

Friedman said.

Clinton Merrick, a former venture capitalist, alleged that the companies cut

off benefit payments a year after he submitted a disability claim with a

diagnosis of Lyme disease and chronic fatigue syndrome, Friedman said yesterday

in a phone interview. An appellate court upheld the $1.6 million in

compensatory damages that Merrick won in the 2004 trial and the retrial focused

only

on punitive damages.

" This company has been subjected to unprecedented scrutiny from the courts,

the media, and government regulators, all of whom have found it improperly

handled claims, " Friedman said. " The verdicts are going to keep on coming

until it changes its ways. "

Jurors ordered Chattanooga, Tenn.-based Unum, which was in the process of

acquiring Revere when the claim was denied, to pay $36 million. The jury

said Revere should pay $24 million.

Unum will appeal to the 9th U.S. Circuit of Appeals, spokeswoman e

Guenther said yesterday in a phone interview.

" We do not believe the verdict will be sustained, " she said.

Unum rose 7 cents to close at $20.93 in New York Stock Exchange composite

trading. Shares have fallen 12 percent this year and the company is valued at

$7.25 billion.

The case is Merrick v. Revere Life Insurance Co. and UnumProvident

Corp., 00-0731, U.S. District Court, District of Nevada (Las Vegas).

Copyright 2008 Worcester Telegram & Gazette Corp.