Jury Awards $34.3M in State Farm Life Insurance Fees Class Action

UPDATE:

• The Supreme Court of the United States (SCOTUS) declined to hear State Farm’s appeal to a lower court’s ruling upholding a $34 million jury trial award on Monday, April 27, 2021.

State Farm was hit with a $34.3 million trial verdict over class action allegations that the insurer took more from universal life insurance policyholders’ accounts than permitted.

The State Farm universal life insurance deduction class action lawsuit claimed that the company used prohibited factors to calculate the cost of the universal life insurance products, leading to overpayment by policyholders.

The lead plaintiff alleged that he had overpaid by $3,000 for his $100,000 life insurance policy.

The insurance giant fought back and succeeded in getting punitive damages trimmed, arguing that it had not acted with reckless disregard or evil motive in assessing the policyholders’ rates.

However, the company also argued that the State Farm universal life insurance deduction class action lawsuit should have been dismissed because it advertised maximum costs, but did not charge policyholders over the amount advertised.

“Because State Farm charged Plaintiff COI rates consistent with the terms of his policy, there is no genuine dispute as to any material fact, and State Farm is entitled to judgment as a matter of law on all of plaintiff’s claims,” stated the motion to dismiss the State Farm universal life insurance deduction class action lawsuit.

However, a federal court judge refused to toss the State Farm universal life insurance deduction class action lawsuit in its entirety.

After a four-day trial, State Farm was hit with the $34.4 million jury verdict. The jury found that the company engaged in breach of contract and conversion as alleged in the State Farm class action lawsuit.

The company had also asked the federal court to decertify the Class in the State Farm universal life insurance deduction class action lawsuit. Class Members who were not injured by State Farms’ fee assessing practices should be removed, argued the insurer, as opposed to simply not receiving an award.

Further, argued the company, some members of the Class in the State Farm insurance class action lawsuit would actually be assessed at a higher rate.

According to the State Farm universal life insurance deduction class action lawsuit, the lead plaintiff purchased his universal life policy from the company in 1999.

The plaintiff alleged that although State Farm used age, sex, and race to determine his policy rates, the company also used “unauthorized factors” that led to a higher rate.

According to the plaintiff, this action led to him and other Class Members paying higher rates over long periods of time, 14 years in the plaintiff’s case, leading to thousands in damages.

State Farm fought the $34 million jury verdict. The Eighth Circuit Court of Appeals affirmed the jury’s decision and SCOTUS declined to hear the insurer’s arguments.

“After employing every appeal and delay tactic available to it, State Farm will finally be obligated to pay the jury verdict returned nearly three years ago,” a lawyer representing the plaintiffs told Law360 of the Supreme Court’s decision not to hear the case.

Top Class Actions will continue to monitor this lawsuit for further developments.

Are you a Class Member in the State Farm universal life insurance class action lawsuit? Tell us about your experience in the comment section below!

The lead plaintiff and Class Members are represented by Patrick J. Stueve, Norman E. Siegel, Ethan M. Lange, and Lindsay Todd Perkins of Stueve Siegel Hanson LLP and John J. Schirger, Matthew W. Lytle, and Joseph M. Feierabend of Miller Schirger LLC.

The State Farm Universal Life Insurance Deduction Class Action Lawsuit is Vogt, et al. v. State Farm Life Insurance Co., Case No. 20-1008, in the U.S. Supreme Court.