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A jury in federal district court in Miami, Florida, returned a verdict of $2,930,458 in favor of Liberty Mutual Insurance Company. The verdict was entered against two Georgia-based companies, C-Staff, Inc., and Southern Pan, Inc., both of which were insured by Liberty from 1989 to 1992. The verdict includes $300,000 in punitive damages against C-Staff for fraud.
C-Staff, Inc., is an employee leasing company which operated in Florida and Georgia. Southern Pan, Inc., is a concrete forming company that used C-Staff for payroll services.
Liberty Mutual sued both companies in 1996 for breach of contract relating to workers’ compensation insurance that Liberty provided to the companies.
Liberty also alleged that C-Staff intentionally understated its payroll to fraudulently reduce its premium and that C-Staff submitted claims for employees who were not reported on its state unemployment tax filings.
Neil Johnson, Manager of Special Investigations for Liberty Mutual, testified regarding the insurance fraud. After the verdict, which followed a two-week trial, M. Johnson stated, “Florida and Georgia have strong penalties for insurance fraud, but it is especially gratifying when a jury confirms that insurance fraud will not be tolerated.”
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