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Citing errors by a trial judge, the 4th District Court of Appeal in West Palm Beach, Fla., has overturned a $79.6 million verdict against Humana Health Insurance Company of Florida. The verdict, handed down in January 2000 by a Palm Beach Circuit Court jury, was one of the largest in the county’s history. It grew out of a lawsuit filed in 1996 by the father of a little girl who claimed that Humana had cut off special care coverage to his daughter, who suffered from cerebral palsey. Mark Chipps, a Palm Beach County Sheriff’s deputy, filed the case after Humana removed his daughter, Caitlyn, from its Medical Case Management program and stopped paying for her speech, occupational and physical therapy. He claimed Humana took the action against his daughter and another hundred children in an effort to save millions of dollars. Chipps argued that after the company removed the girl from the program, she regressed both physically and emotionally. Humana claimed it did not terminate her coverage, arguing that Caitlyn failed to meet the company’s criteria for remaining in the program. But Humana never got to prove its point. Ruling that Humana repeatedly failed to turn over documents requested by Chipps’ lawyers, Palm Beach Circuit Judge James T. Carlisle issued a default judgment, which was upheld by the 4th DCA. That allowed the case to proceed on damages alone. After a three-week trial, jurors awarded Mark Chipps $1.1 million in compensatory damages and $78.5 million in punitive damages to his daughter. But on a subsequent appeal of the awards by Humana, the DCA panel found the judge committed a number of errors during the damage phase. In reversing the awards this week, the 4th DCA noted that Carlisle improperly allowed an emotional distress claim benefiting Mark Chipps to stand, resulting in a $1.1 million compensatory award for the father alone. “A fair and objective reading of the allegations shows that Chipps was seeking damages for himself individually and not as next friend to his daughter,” the appeals court wrote. Since the DCA reversed the compensatory award, it said it had no alternative but to negate the punitive award as well. The DCA also criticized the judge for not allowing the jury to arrive at its own decision regarding the alleged egregiousness of Humana’s conduct. Instead, Carlisle instructed the jury from the bench that Humana’s conduct was “so gross and flagrant as to show a reckless disregard of human life or the safety of persons exposed to the effects of its conduct.” The appellate court also found that Carlisle failed to instruct the jury that it had the discretion to decline to assess punitive damages or to award only a nominal amount. The higher court said Carlisle also improperly barred Humana from introducing mitigating evidence to rebut testimony that its managed care practices violated industry standards. The jury, the 4th DCA court noted, “should have been allowed to consider any evidence which would have had the effect of reducing or softening the moral or social culpability attaching to the defendant’s act.” The appellate court noted that Carlisle should not have allowed the parents of several other critically ill children to testify about their negative experiences with other health insurers who were not a party to the lawsuit. Though the appellate court said it could not determine whether any or all of the court’s “glaring errors” contributed to the jury’s verdict, given the “severity of the award” it felt compelled to reverse the lower court’s ruling and remand the case for a new trial. Miami lawyer Joel Eaton of Podhurst Orseck Josefsberg Eaton Meadow Olin & Perwin represented Chipps on appeal. Sylvia Walbolt of Carlton Fields in St. Petersburg, Fla., represented Humana. Neither responded to inquiries before deadline.

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