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It’s the kind of day just about any trial lawyer dreams about: the day $1.6 billion walks through the door. But the dream became a reality for Jock Smith in 2001 when Carolyn Whittaker came to see him, charging that she had been the victim of an alleged bad-faith insurance scheme. It didn’t take long for Smith, a partner at Tuskegee, Ala.’s Cochran, Cherry, Givens & Smith, to realize that he had a good shot at winning his case. Fifteen years earlier, Smith won a $5 million verdict in a case involving the same insurance agent, James Richard Perry, allegedly involved in Whittaker’s case. The December 1988 case also involved allegations of bad-faith insurance. In the 1988 trial, Smith represented plaintiff Lucy Turner, who, like Whittaker, had paid Perry thousands of dollars in premiums for a life insurance policy that did not exist. Turner v. Southern Life, No. CV-8790 (Macon Co., Ala., Cir. Ct.). The second time around, another Macon County jury ordered the insurance agent to pay $810 million to Whittaker. Perry’s co-defendant, Southwestern Life Insurance Co., whose policies he wrote, was also ordered to pay $810 million, for a combined verdict of $1.6 billion�the second-highest verdict in Alabama history. Of the total, $20 million is for compensatory damages. Whittaker v. Southwestern Life, No. CV-02-41. Southwestern is owned by Switzerland-based Swiss Reinsurance Co., or Swiss Re, one of the world’s largest reinsurers. The verdict may be subject to a 1999 statute by the Alabama Legislature that caps punitive damages at three times the amount of the compensatory award in nonpersonal injury cases. But plaintiffs’ lawyers say that that determination would be premature since the law is still murky and post-cap punitive awards in Alabama present new territory. Michael D. McNamara, a spokesperson for Swiss Re, called the verdict “clearly inappropriate. We’re confident that this matter will be rectified by the rights of appeal that Southwestern will pursue vigorously.” The judge has refrained from entering a final judgement until both sides have submitted post-trial motions. In presenting their case to the jury, Smith and co-counsel Brian Strength, also of Cochran Cherry, said they tried not to overstate their argument for fear that they might obscure facts that would get the jury excited. “We let the facts and the lies and the fraud and the wrongs take the lead,” Strength said. The plaintiffs’ trial team used minimal visual aids, mainly consisting of enlarged copies of the receipts for premiums Whittaker had paid Perry. They called witnesses from Southwestern who testified that the company had violated its own policy against agents accepting cash premiums. The case against Southwestern was built on the theories of actual and apparent authority, meaning that Southwestern was responsible for the wrongs committed by its agent, Strength said. The company’s agency contract with Perry gave him the actual authority to write Southwestern insurance policies. And although, in 1997, it terminated all agency contracts in Alabama, including Perry’s, and declined to write new policies from that state, Southwestern never notified Whittaker of its actions. Southwestern was represented by George W. Walker of Copeland, Franco, Screws & Gill in Montgomery, Ala., and Bruce F. Rogers of Bainbridge, Mims, Rogers & Smith in Birmingham, Ala. Neither returned calls seeking comment. McAree’s e-mail is [email protected].

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