The Cedar Rapids Gazette , Tuesday, September 20, 1988

LINN JURY AWARDS $1 MILLION IN INSURANCE CASE
By Roland Krekeler
Gazette courts reporter

A judgment of more than $1 million was entered against Grinnell Mutual Reinsurance Co. Monday on a jury verdict finding the company had improperly tried to get out of representing a policy holder by accusing him of fraud.

A Linn County District Court jury awarded Al Wierck of Fairbank $50,000, the amount he had spent defending himself against the fraud accusation, $175,000 for mental pain and suffering and $175,000 for emotional distress, and $200,000 in punitive damages.

The jury also found in favor of a Cedar Rapids couple, Toni and LeRoy Ague, who had obtained a $244,208 verdict against Al Wierck. Wierck's son, James, driving a pickup truck owned by his father, drove into the rear of a car driven by Mrs. Ague.

The younger Wierck, convicted of drunken driving in the accident, had earlier been refused insurance by Grinnell Mutual based on his driving record. Later, however, the son transferred title to his pickup truck to the father, who included it on his insurance policy.

The verdict for the Agues means Grinnell Mutual is responsible for the $144,208 not covered by Wierck's insurance policy, which had a $100,000 limit.

The total verdict of $744,208 is believed to be the largest ever returned by a jury in Iowa in a case based on a claim that an insurance company's bad faith had resulted in a verdict higher than the insured's coverage limit.

With interest from when the suits were filed, the judgment totals more than $1 million.

Al Wierck's attorney, Nick Critelli of Des Moines, said in his closing argument last week that attorneys for the company had determined no fraud was involved in the elder Wierck's obtaining of the insurance coverage.

One of the attorneys, he said, concluded the agent who wrote the coverage had erred in providing the coverage.

A company official wrote in January 1982 that he would like to avoid coverage of the accident or shift the expense to the agent, Critelli said. No action was taken against the agent, who has a brother on the Grinnell Mutual board of directors, Critelli said.

He said the company's decision to sue Wierck to get a court declaration that he was not covered by the policy because of fraud was the atomic bomb in its arsenal and required Wierck to refinance his farm to get an attorney to defend himself. Critelli said less damaging ways of resolving the issue were available.

An attorney for the Agues, Tom Riley, argued the suit filed by the company, which also named the Agues as defendants, was designed to deprive Wierck of his coverage and to force the Agues to accept less than the verdict they had received or to force Wierck to pay some of the verdict.

An attorney for the company, Theodore Duffield of Des Moines, argued the plaintiffs had not shown the case could have been settled within the $100,000 limit, so there was no basis for them to prevail.

He also argued the company had a responsibility to other policy holders to make sure the Wierck coverage had not been obtained by fraud.

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