{"id":2825,"date":"2024-10-01T16:12:59","date_gmt":"2024-10-01T16:12:59","guid":{"rendered":"https:\/\/usatrustedlawyers.com\/blog\/missouri-court-upholds-28m-jury-verdict-against-life-insurer-remands-for-prejudgment-interest-award\/"},"modified":"2024-10-01T16:12:59","modified_gmt":"2024-10-01T16:12:59","slug":"missouri-court-upholds-28m-jury-verdict-against-life-insurer-remands-for-prejudgment-interest-award","status":"publish","type":"post","link":"https:\/\/usatrustedlawyers.com\/blog\/missouri-court-upholds-28m-jury-verdict-against-life-insurer-remands-for-prejudgment-interest-award\/","title":{"rendered":"Missouri Court Upholds $28M Jury Verdict Against Life Insurer, Remands for Prejudgment Interest Award"},"content":{"rendered":"\n
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In addition to\u00a0upholding a $28 million jury award against an insurance company in a class-action suit over universal life insurance policies,\u00a0a Missouri\u00a0appellate court recently sent a portion of the case to the trial court to after determining the plaintiffs were also entitled to prejudgment interest.<\/p>\n<\/div>\n

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In Karr v. Kansas City Life Insurance Co.,<\/em>\u00a0the Jackson County Circuit Court entered a jury’s\u00a0$28.3 million verdict in favor of David B. Karr and others. However, the lower court declined to award prejudgment interest. On appeal, the Missouri Court of Appeals concluded the lower court correctly delivered a judgment in favor of Karr, who filed a breach of contract suit against Kansas City Life Insurance Co. (KCL), over how the accumulated cash value for the policies were calculated by reducing each policy’s monthly cash value by an overstated monthly deduction comprised of a “cost of insurance” amount and a “monthly expense charge,” according to the\u00a0the\u00a0Sept. 24 opinion<\/a>.<\/p>\n<\/div>\n

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The appellate court\u00a0reversed the trial court’s denial of prejudgment interest, finding Karr’s request was wrongly denied\u00a0based on the court’s determination that the damages awarded weren’t liquidated, said the opinion,\u00a0authored by Missouri Court of Appeals Judge\u00a0Cynthia L. Martin.<\/p>\n<\/p><\/div>\n

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<\/a> Judge Cynthia L. Martin, Missouri Court of Appeals, Western District. Courtesy photo <\/figure>\n<\/p>\n<\/div>\n

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Karr requested a prejudgment interest award of approximately $13.5 million as of Dec. 21, 2022, plus a daily rate of at least $4,698.66 through the date of entry of a final judgment.\u00a0Karr’s expert witness, S.W., had calculated this amount, as well as the total damages award the jury had rendered, having calculated the amount to begin where the historical expert’s testimony about classwide damages ended.<\/p>\n<\/div>\n

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The trial court denied this request, finding Karr’s breach of contract claims weren’t liquidated. Karr appealed this ruling, and KCL also appealed the trial court’s entry of its final judgment, following the jury verdict.<\/p>\n<\/div>\n

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According to Martin,\u00a0Karr and the class were entitled to prejudgment interest, “calculated at the contract rate set forth in the policies from and after the date that any of the policies terminated or were surrendered prior to S.W.’s interest calculation, and from and after the date of February 28, 2021, for policies still in force at the time of S.W.’s interest calculation with that interest calculation continuing to August 24, 2023, the day of the final judgment.”<\/p>\n<\/div>\n

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Karr argued that damages for breach of contract were readily ascertainable at the time of each breach making the damages liquidated or capable of ascertainment as a matter of law such that an award of prejudgment interest was mandatory pursuant to section 408.020. Meanwhile, KCL had\u00a0argued that the claims weren’t liquidated and that an award of prejudgment interest would result in a double recovery because S.W. had already included prejudgment interest in his class-wide damage calculation.<\/p>\n<\/div>\n

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The court shot down KCL’s argument that\u00a0the measure of damages was in dispute, and concluded that the damages for breach of contract weren’t liquidated, as the record didn’t support the argument.<\/p>\n<\/div>\n

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“KCL agreed that breach of contract damages had to be calculated by subtracting from COI [cost of insurance] rates actually used the amount that should have been used. KCL thus agreed with Karr about the proper measure of damages but simply disagreed about which mortality assumption data should be used in the damage calculation formula,” Martin said, noting\u00a0that KCL elicited trial testimony suggesting “mortality assumptions based on product pricing should have been used in the formula, and that criticized S.W.’s use of mortality assumption data provided by KCL in discovery but generated for purposes other than product pricing.”<\/p>\n<\/div>\n

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However, according to the court, the disagreement “over which mortality assumptions should have been used,” failed to demonstrate that breach of contract damages weren’t liquidated or capable of ascertainment.<\/p>\n<\/div>\n

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The court noted that KCL correctly admitted that the damages award\u00a0 included the expert’s prejudgment interest calculation,\u00a0which KCL didn’t object to a trial “because breach of contract damages were not liquidated or capable of ascertainment.”<\/p>\n<\/div>\n

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“The policies required KCL to credit policyholders with interest on cash value balances at a contract rate. Because cash value balances were lower than they should have been because more was deducted monthly for the cost of insurance than the policies permitted, it follows that class members suffered damages in the amount of the overstatement of the COI rate and also in the amount of interest that would have been earned had the COI rate overstatement remained in each class member’s cash value,” Martin said.<\/p>\n<\/div>\n

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“Karr’s motion sought an award of prejudgment interest that used the same method for calculating interest that S.W. employed, though Karr’s motion picked up from the point where S.W.’s interest calculations ended and requested an award that continued through the date of entry of a final judgment,” Martin said. “Karr thus sought an award of prejudgment interest from and after the date that Policies terminated or were surrendered prior to S.W.’s interest calculation,\u00a0and from and after the date of February 28, 2021 for Policies still in force at the time of S.W.’s interest calculation.”<\/p>\n<\/div>\n

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Therefore, the court determined that the breach of contract damages were “no less liquidated or capable of ascertainment for the periods now sought by Karr than they were for the periods included in S.W.’s class-wide damage calculation.”<\/p>\n<\/div>\n

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Karr’s attorney,\u00a0Patrick Stueve of Stueve Siegel Hanson, in\u00a0Kansas City, and KCL’s attorney,\u00a0Traci Martinez of Squire Patton Boggs, in\u00a0Columbus, Ohio, did not immediately respond to requests for comment.\u00a0<\/span><\/p>\n<\/p><\/div>\n

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In addition to\u00a0upholding a $28 million jury award against an insurance company in a class-action suit over universal life insurance policies,\u00a0a Missouri\u00a0appellate court recently sent a portion of […]<\/p>\n","protected":false},"author":1,"featured_media":2826,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[3648,1202,143,2397,968,392,926,617,3650,3649,483,395],"class_list":["post-2825","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-lawyers","tag-28m","tag-award","tag-court","tag-insurer","tag-interest","tag-jury","tag-life","tag-missouri","tag-prejudgment","tag-remands","tag-upholds","tag-verdict"],"_links":{"self":[{"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/posts\/2825","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/comments?post=2825"}],"version-history":[{"count":0,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/posts\/2825\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/media\/2826"}],"wp:attachment":[{"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/media?parent=2825"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/categories?post=2825"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/tags?post=2825"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}