From judydoc@the-spa.comWed Nov 25 01:15:38 1998
Date: Tue, 24 Nov 1998 23:03:10 -0500
Subject: Re: Arizona Republic telephone numbers

Here's some good news before Thanksgiving. Steve's case will hopefully get before the judge before Christmas. It's been a long time coming for him.

Good news to all . An Arizona jury finally has vindicated a local dentist. To Unum's Insurance Company's dismay Judge Sheldon is the very same Judge that Mr. Stephen T. Russell's case is pending against UNUM. Case #CV 95-12521. What a shame for UNUM that this very same thing (probably 100 million) will happen against UNUM........To be continued

Article tells about Arizona claimant who was awarded $59 Million Dollars from a jury (and they didn't have evidence of people being driven to suicide).

The Arizona Republic Archives


Published on Wednesday, November 18, 1998 © 1998 The Arizona Republic

Byline: By Victoria Harker, The Arizona Republic; Republic writer Christina Leonard contributed to this article.
telephone number: (602) 444-8235
Longtime Phoenix dentist Ronald Diamond lost his bustling practice almost overnight when his hands failed him.

Still, Diamond figured he had a fallback - the disability insurance plan he'd been paying into for years.

Then he found out that he, along with other disabled people, was on a secret ''hit list'' compiled by officials of General American Life Insurance.

He found it out after General American cut him off, claiming that his disability - carpal tunnel syndrome - was not genuine.

''I was quite upset and very angry a company this size would do business like this,'' said Diamond, 58, who took work as a hospital technician to support his family.

Last week, a Maricopa County jury apparently agreed. After a trial, the panel awarded Diamond a $59 million verdict against the insurance company.

Most of it, $58 million, was for punitive damages.

But Russell Kolsrud, General American's lawyer, said the company disputes all of Diamond's claims and will appeal the verdict.

''I felt I might win my case, but I had no idea that's what the jury was going to do. . . . We all feel we want to send a message to the boardrooms of insurance companies (that) 'You just don't do this,' '' Diamond said.

Diamond's attorney, Charles Surrano III, called the judgment the largest single award for an individual plaintiff in Arizona history and the largest disability bad-faith award in the country.

Diamond said he was upset when his disability coverage was cut off, but became enraged when he learned dozens of other disabled people were being treated the same.

One was a Carefree doctor with chronic fatigue syndrome who was in bed when he received his cutoff letter from General American the day after Thanksgiving, according to court records. A copy of the letter shows the company determined he was no longer disabled.

''We wish you continued good health and a happy holiday season,'' says the letter from the St. Louis company.

During trial before Superior Court Judge Steven Sheldon, company representatives insisted there was no plot to cut off benefits to disabled policyholders.

But Surrano presented memos and documents from the insurance company that persuaded jurors otherwise.

He claimed that the multibillion-dollar insurance company hatched a scheme to defraud policyholders out of their benefits in 1990, when General American learned that its disability division was in the red by about $40 million to $60 million.

Witnesses testified that the company developed a program to cut its losses, including a ''hit list'' that was introduced as evidence.

It targeted policyholders such as Diamond who had more than $100,000 in benefit reserves, they said.

The company's director of claims, William Kasalko, personally reviewed the files of each of the 58 people on the list, Surrano said, then used several different tactics to cut off benefits, including:

/ Sending policyholders to one doctor after another in hopes of finding one who would diagnose them as cured.

/ Increasing paperwork requirements that if not completed would result in canceled benefits.

/ Offering buyouts that amounted to a fraction of the amount policyholders had in their benefit reserves.

/ Sending investigators to snoop on policyholders to determine whether they were financially vulnerable and, if so, stopping payment of monthly claims, forcing policyholders into a position where they felt they had to take the buyout offers.

General American's attorney could not be reached to comment on these accusations.

Surrano introduced company memos that show officials tried to cover up the scheme.

A 1990 three-page memo stamped ''confidential'' discusses General American's ''strategic plan'' for accomplishing ''reserve buyouts.''

''I believe it is important that all correspondence regarding this issue be kept to a bare minimum should any document ever surface if litigation would ever develop,'' says the memo, written by Kasalko. ''This is the second memo I've written and honestly both should be destroyed or kept to a very minimal distribution.''

General American's plan was a success, court documents reveal.

The company's personnel files show that Kasalko was lauded in his annual review for his ''aggressive claims handling.''

''His actions have saved literally millions of dollars,'' states the review, signed by two high-ranking executives.

One of key witnesses was William Wizinsky of Oxford, Mich.

Wizinsky suffered permanent disabling injuries in an automobile accident 14 years ago. When General American cut off his benefits in 1990, he and family members obtained files of all people on the ''hit list.''

One was an AIDS patient who was terminal; because he no longer needed to go to a doctor, the company cut off his benefits, Wizinsky testified.

Another policyholder was a mentally incompetent woman who could not do her own banking or sign her own checks. Company officials negotiated with her and talked her into a buyout of her policy, Wizinsky said during an interview Tuesday.

''She got the lowest percentage buyout of anyone,'' he said.

Wizinsky filed suit against the company seven years ago. But unlike Arizona, Michigan does not have statutes that require insurance companies to operate in good faith.

''If I had to do it over, I would have never bought the policy from them,'' he said. ''It's greed. It's hard for me to comprehend how you could do this to people who are disabled.''

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Created: November 24, 1998
Last Updated: May 28, 2000