Insurer Ordered to Pay Couple $625,000 for Denial of Benefits

A young couple won a $625,000 jury verdict Wednesday from an insurance firm that refused to pay medical benefits after the husband was seriously injured in an automobile accident.

Telly and Patricia Kanakis were awarded the damages against Mutual Life Insurance Co. of New York after a two-week trial before Orange County Superior Court Judge Claude M. Owens.

Kanakis was hospitalized for a month and out of work for almost a year after a motorcycle he was riding was struck by an auto in Anaheim on Nov. 28, 1983. Kanakis, who worked for Lucky food stores, was covered by Mutual as a dependant under a policy issued by his wife’s employer.

Mutual refused to pay anything toward Kanakis’ $44,000 in medical bills. The firm said Kanakis should have first collected under his own employment benefits.

George W. Tackabury, lawyer for the insurer, said he was “disappointed” with the verdict.

“There was absolutely no intention on the part of Mutual to decline a valid claim. We still believe that the company did not do so. We do intend to pursue an appeal,” Tackabury said.

The jury found that Mutual breached its contract by failing to pay Kanakis’ bills. In addition, jurors voted $50,000 to Kanakis and $75,000 to his wife for the emotional distress they suffered.

And jurors awarded $500,000 in punitive damages, designed to punish Mutual for its refusal to pay the claim.

Kanakis, who was 23 at the time of accident and had been married 14 months, suffered severe injuries to his legs, a displaced jaw and permanent nerve damage in his left arm.

One year after the accident, the Kanakis received $50,000 from the firm that insured the other driver. Kanakis’ lawyer, Robert Castleberry, has also filed a lawsuit against that firm, affiliated with the Auto Club of Southern California, alleging that it failed to promptly pay the claim.