View this article online: https://www.claimsjournal.com/news/midwest/2007/05/09/79541.htm
A former insurance agent awarded more than $27 million, one of the largest jury verdicts ever in South Dakota, is entitled to nothing, a federal appeals court ruled in reversing it.
The three-judge decision from the 8th U.S. Circuit Court of Appeals in St. Louis was against Eugene Kent of Sioux Falls, who sued United of Omaha Life Insurance Co. of Nebraska, a subsidiary of Mutual of Omaha.
In September 2005, a federal jury in Aberdeen awarded Kent $27.4 million for being wrongly imprisoned, lost income and punitive damages.
Kent lost his insurance license and spent two years in federal prison after being found guilty of two counts of mail fraud. A judge later overturned the convictions after concluding Kent’s lawyer was ineffective.
Kent sued United of Omaha, claiming it should have provided certain evidence pertaining to the case when he was sentenced, but his lawyer at the time never requested the documents.
The jury awarded Kent $17.5 million for punitive damages, $7 million for loss of liberty for his two years in prison and $2.9 million for lost income.
Steven Sanford, the Sioux Falls lawyer representing United of Omaha, said that last week’s ruling proved Kent’s trouble was his own making and not the company’s.
“The 8th Circuit Court of Appeals said that he couldn’t complain that we caused the loss of his license because all of the courts that had considered it through the appeals said he was at fault,” Sanford said.
Nor was United of Omaha responsible for Kent’s imprisonment, he said.
“I think our trial courts and juries in this state are wonderful. But no one’s perfect and the 8th Circuit Court of Appeals gets the last word in this case. And their last word is there’s no claim,” Sanford said.
Neither Kent nor his Minneapolis lawyer returned telephone calls seeking comment.
The case dates back to the early 1990s.
Kent was convicted as the result of two checks delivered by United Parcel Service in 1991. He was negotiating a health insurance plan with United of Omaha on behalf of the Independent Community Bankers, a group of non-chain banks.
The plan never was finalized even though Kent received money while he oversaw the policy, processing premiums and claims.
The checks, totaling more than $330,000, were made out to ICB from United of Omaha. Endorsing checks made out to ICB and placing the money in accounts without a proper agreement in place resulted in the mail fraud convictions.
Kent eventually repaid the money.
The mail fraud law at the time only applied to items sent through the U.S. Postal Service, not UPS. United of Omaha had documents showing the checks were sent by UPS, but Kent’s lawyer never requested those documents, something the judge said the attorney should have done.