DES MOINES, Iowa — The Iowa Supreme Court on Friday dramatically reduced the compensation a paralyzed northeast Iowa man received from a jury in a lawsuit against an insurance company even while finding the company’s actions were “reprehensible.”
Despite criticizing the Louisiana-based workers’ compensation insurer’s treatment of Toby Thornton, who was left permanently disabled in an accident, the justices left him with a judgment of $558,000. That’s far less than the $25 million awarded by one jury and more than $7 million awarded by another after an appeal.
Thornton, 42, was involved in an accident while driving a truck in June 2009 for Clayton County Recycling. He was severely injured and left paralyzed below the chest.
His workers’ compensation claim was approved, and he began receiving benefits from American Interstate Insurance Co. Over time, disputes developed with the company as Thornton sought continued medical care, a new wheelchair and a financial settlement.
The company at one point began disputing whether he was permanently and totally disabled, as determined by the state’s worker’s compensation commission.
He sued the company in December 2013 and a jury awarded him $284,000 in pain and suffering and other actual damages and $25 million in punitive damages after determining the company had acted in bad faith.
American Interstate appealed, and the Iowa Supreme Court ordered a new trial.
During the second trial in February 2018 the jury found “the conduct of American Interstate constituted willful and wanton disregard for the rights or safety of another” and awarded Thornton $382,000 in damages and $6.75 million in punitive damages.
The insurance company appealed again.
The Iowa Supreme Court in a decision published Friday concluded delays in Thornton receiving a new wheelchair were not the insurance company’s fault. The court also found the company could not be held responsible for some of his financial claims tied to a delay in receiving a negotiated lump-sum settlement. The court also reduced Thornton’s claimed attorney fees.
The court’s final judgment allowed Thornton $58,452 in actual damages.
“This court may set aside a verdict failing to secure justice for the parties, not on the basis of verdict amount, but because a jury ignores uncontroverted evidence resulting in injustice,” the court said.
As for punitive damages the court concluded the insurance company must be penalized for withholding a financial settlement for 11/2 years by delaying the determination of his total disability.
“We conclude based on our review of the facts that the conduct of American Interstate can be characterized as reprehensible,” the court said, adding that “the conduct of American Interstate is simply, plainly, and completely unacceptable and worthy of censure in the form of a substantial punitive damages award.”
However, the justice found the second trial jury award of punitive damages 18 times the amount of actual damages to be excessive.
It found punitive damages of $500,000 to be a fair “measure of punishment and deterrence.”
The court ordered a district court judge to enter a judgment of $558,452.
Attorneys for Thornton and the insurance company did not immediately respond to messages.
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