Plaintiff Jennie Hampton’s vehicle, valued at $10,300 and insured
by State Farm Mutual Automobile Insurance Company, was stolen from her
fiancé’s residence. At this time, Hampton’s fiancé
lived with his half-brother and co-plaintiff, Marvin Vail. The following
day Hampton reported the theft in person to both State Farm and the Olathe
Police Department. Five days later, the vehicle was found burned and a
total loss on a rural road in Miami County, Kansas. Subsequently, both
the Olathe Police Department and the Miami County Sheriff’s Department
investigated the theft and arson and determined that plaintiffs were not involved.
Despite two separate law enforcement agencies finding no evidence to implicate
the plaintiffs, State Farm, through its Special Investigative Unit, conducted
its own independent investigation and denied Hampton’s claim by
concluding that she and her brother-in-law were guilty of insurance fraud.
Through their mechanical experts, whom they paid over $400,000 in the
previous 10 years, State Farm concluded that the engine was inoperable
before the fire, and that plaintiffs were responsible for both the inoperability
Simultaneous with this independent investigation, Hampton filed a Breach
of Contract claim against State Farm in Johnson County, Kansas. Shortly
thereafter, State Farm, through its attorney, threatened the unwarranted
criminal prosecution of Ms. Hampton if she didn’t “back off”
from her claim. Regardless of this threat, Hampton continued to pursue
her claim. Notwithstanding State Farm’s long-held conclusion that
plaintiffs were guilty of a crime, it was not until after this threat
that they instigated prosecution.
Two years from the date of the theft, the day any potential criminal statute
of limitations were to run out, Vail and Hampton were charged with felony
insurance fraud in Johnson County, Kansas. The basis for the charges derived
entirely from information provided by State Farm and co-defendant, the
National Insurance Crime Bureau (NICB).
It was later uncovered that during their independent investigation, State
Farm’s Special Investigative Unit threatened an independent witness
to solicit perjury, concealed and disregarded clear exculpatory evidence,
reported what information they did collect in a false manner, and directed
the conclusions of their mechanical expert.
State Farm, knowing they did not have access to the Johnson County District
Attorney’s Office, then provided this one-sided and erroneous information
to NICB, requesting instead that they refer the case to the Johnson County
District Attorney for charging.
NICB followed State Farm’s instruction and, through its employee
and a retired KBI agent who as an active agent worked side by side with
the DA, presented the file to the Johnson County District Attorney. Prior
to this, the NICB had done absolutely no independent investigation to
either confirm or deny the facts presented by State Farm. Rather, while
presenting this information to the DA, NICB admittedly “watered
down” exculpatory evidence, trying to instigate charging. Additionally,
while meeting with the Johnson County DA, NICB withheld critical evidence
by not informing the prosecutor that it was State Farm, not NICB, behind
the investigation and referral.
After reviewing the information provided, felony insurance fraud charges
were filed against both Hampton and Vail. Prior to this, neither Hampton
nor Vail had any criminal history and, as a result of the charges, they
were arrested and faced the extreme humiliation, anxiety and expense tied
with being criminal defendants.
State Farm continued to work behind the scenes preparing the state’s
witnesses for the preliminary hearing testimony, claiming privilege on
documents sought by the prosecutor, attempting to keep crucial evidence
from being inspected by plaintiffs’ criminal attorneys, closely
monitoring the criminal trial and providing well-prepared witnesses to
testify at trial.
After a 10-day criminal trial, both Hampton and Vail were acquitted of
all charges. Rather than showing remorse for instigating the wrongful
prosecution, State Farm continued to not only proclaim Hampton and Vail’s
guilt, but also to deny Hampton’s claim.
After the acquittals, Hampton’s breach claim in Johnson County, Kansas,
against State Farm was dismissed and refiled with her and Vail’s
claims for malicious prosecution and the tort of outrage against State
Farm and the NICB. After a three-week trial in Jackson County, but before
verdict, defendant NICB entered into a high-low agreement with a high
of $110,000 and low of $100,000 for Vail and $160,000 and $150,000 for Hampton.
The jury returned a verdict for plaintiffs on all counts, and after a post-trial
hearing the court entered judgment against NICB. The court also entered
judgment against State Farm for $200,000 in actual damages for Hampton
and $175,000 for Vail. For her breach claim against State Farm the court
entered judgment in favor of Hampton for $251,700 in attorney fees.
Additionally, the court entered judgment in favor of Vail and Hampton individually
for their punitive claims against State Farm in the amount of $4 million each.