An insurance firm is ordered to pay $44M in a lawsuit filed by a man freed from prison in Missouri
Most of the money would go to Ryan Ferguson, whose legal battle with Minnesota-based St. Paul Fire and Marine Insurance Co. in Missouri's courts started in 2017, about six weeks after he won a federal lawsuit against six Columbia police officers. Ferguson was convicted in 2004 of killing Columbia Daily Tribune sports editor Kent Heitholt but was released from prison in 2013 after a state appeals court panel concluded that he hadn't received a fair trial. Ferguson maintained his innocence.
The city insurer paid Ferguson $2.7 million almost immediately after he won his federal lawsuit, and his attorneys expected St. Paul to pay $8 million under its coverage for the officers from 2006 to 2011. But the company argued that it wasn't on the hook because the actions leading to Ferguson's arrest and imprisonment occurred before its coverage began.
While Ferguson sought to collect, the officers argued that St. Paul was acting in bad faith, shifting the burden to them as individuals and forcing them to face bankruptcy. Ferguson's lawyers took up those claims, and Missouri courts concluded that St. Paul was obligated to pay $5.3 million for the time Ferguson was in prison while it covered the officers. It paid in 2020.
But the payment didn't end the dispute, and in November, a jury concluded that St. Paul had acted in bad faith and engaged in a 'vexatious refusal' to pay. Cole County Circuit Judge S. Cotton Walker upheld that finding in his order Monday as he calculated how much money the company would pay — mostly as punishment — under a Missouri law capping such punitive damages.
'It's a way to send a message to insurance companies that if there's coverage, they need to pay,' said Kathleen Zellner, whose firm represents Ferguson.
She added: 'You can't just pull the rug out from under people when they've paid the premiums.'
The company can appeal the decision. An attorney representing St. Paul did not immediately return a telephone message seeking comment.
Under an agreement between Ferguson and the six officers, they stand to split about $5 million of the $44 million.
The award of nearly $44 million includes $3.2 million to compensate Ferguson and the officers, another $24.2 million in punitive damages, $535,000 million for the 'vexatious refusal' allegation and interest on all of the damages totaling about $16 million.
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