St. Louis, MO (PRWEB) March 10, 2015
A U.S. District Court jury has reached a verdict of in excess of $390 million, including $35.5 million in punitive damages, against PNC Bank following a five-week trial in the case of Jo Ann Howard and Associates, P.C., special deputy receiver of Lincoln Memorial Life Insurance Company, Memorial Service Life Insurance Company, and National Prearranged Services, Inc., et al. versus J. Douglas Cassity; Randall K. Sutton; Brent D. Cassity; J. Tyler Cassity; Rhonda l. Cassity; et al. (Case No. 09-CV-1252-ERW, United States District Court for the Eastern District of Missouri, Eastern Division.)
Lead plaintiffs' counsel, Dan Reilly of the national litigation firm Reilly Pozner of Denver, Colorado, said "Our theme at trial was that the bank's conduct made a fraud possible."
According to court documents, the plaintiffs were the Special Deputy Receiver (SDR), Jo Ann Howard and Associates, who was appointed by the Commissioner of the Texas Department of Insurance; the National Organization of Life and Health Insurance Guaranty Associations (NOLHGA) on behalf of 28 state guaranty associations, and the state guaranty associations of Missouri, Texas, Illinois, Arkansas, Kansas, Oklahoma, and Kentucky. The SDR and guaranty associations joined forces to pursue breach of fiduciary duty and negligence claims against PNC, which was the successor to Allegiant Bank and Trust Company, a St. Louis-based bank that had served as a trustee for multiple pre-need funeral trusts for the original defendants, Reilly said.
Court filings and trial testimony before U.S. District Judge E. Richard Webber revealed that thousands of consumers and multiple funeral homes had entered into contracts with the company known as National Prearranged Services (NPS), which was run by a number of individuals who were indicted and convicted of fraud (USA v. Sutton et al., case number 4:09-cr-00509, in the U.S. District Court for the Eastern District of Missouri.) NPS sold pre-need funeral contracts initially in Missouri and used two affiliated Texas-based life insurance companies to back the pre-need funeral contracts according to court testimony, Reilly said. In 2008, NPS and the two insurance companies were placed in receivership in Austin, Texas. The SDR and state guaranty association system worked together to ensure that thousands of funerals were paid for according to trial testimony, Reilly said. Since 2008, the guaranty associations have paid more than $300 million for in excess of 50,000 funerals in 40 states, Reilly said adding that the guaranty associations will pay for all covered future funerals, which will be additional millions of dollars.
"This has been a superb team effort with the guaranty associations. We are very pleased with the jury's award," said David Mattax, the Commissioner of Insurance for the State of Texas. Peter Gallanis, president of NOLHGA, said, "We are proud that the guaranty associations have met their obligations to ensure that the consumer losses were covered. The jury's verdict was the next step in the process."