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4/27/1996
"In Friday's opinion, written by Justice Janie Shores of Fairhope, the justices limited the ruling to cases files three months after Mrs. Johnson's case is completed. The also excluded wrong-death actions, in which only punitive damages may be awarded. Voting with the majority were Justices Reneau Almon, Gorman Houston, Mark Kennedy, Kenneth Ingram, and Ralph Cook.In 1994, a Mobile County Circuit Court jury awarded $250,000 in compensatory damages and $15 million in punitive damages to Mrs. Johnson, 85, who charged that the company sold her a worthless Medicare supplement policy.Although company policy forbade selling Medicare supplements to clients on Medicaid, Mrs. Johnson's agent sold her such a policy costing $103 per month almost one-third of her fixed income.Presiding Mobile County Circuit Judge Braxton L. Kittrell later cut the jury verdict to $12.5 million. The Supreme Court in November trimmed it to 5.25 million.Stung by the verdict, Life of Georgia announced in July 1994 that it would stop writing new policies in Alabama.The justices upheld their earlier decision to reduce the verdict, but called Life of Georgia's conduct ""egregious and reprehensible, "" causing great financial hardship to the most vulnerable members of society.The justices also defended punitive damage awards in general in such cases, saying the state Insurance Department has little power to regulate agents.""We judicially know that litigation is often the only weapon defrauded citizens have,"" Shores wrote. Life of Georgia's conduct, she wrote, ""a sham and would never have been in this state if the activities of insurance agents were properly regulated.""Mrs. Johnson's Mobile attorney, Sid Jackson, said Friday he was very happy with the verdict. He said he expects Life of Georgia to appeal to the U.S. Supreme Court. Davis Carr of Mobile, an attorney for Life of Georgia, was out of town and could not be reached for comment.In it's ruling, the court also upheld its new plan that state courts conduct a separate hearing on punitive damages. The justices also said jurors might be allowed to consider a company's wealth and assets in determining the award.Chief Justice Perry Hooper Sr. dissented from that portion of the ruling, saying that if brings ""the politics of resentment"" into the courtroom and legitimates ""he Robin Hood reaction.""Justice Hugh Maddox, in a separate partial dissent, said only the Legislature, not the court, has the power to collect revenue for the state.Maddox said even if the court has the power to make the rules, it should not adopt the procedure without giving notice to the parties, judges and state attorneys so each group could comment on the proposal.Justice Terry Butts, in his partial dissent, also said the Legislature should determine where punitive damages go. He suggested, however, that if the state is to get part of the award, ""it should be used to expand and strengthen the department of agency that polices the industry being punished.""By JEAN LAKEMAN HELMSStaff Reporter"
Mobile Press Register
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