Dying Man’s Last Fight Is Against His Insurer

Randy Clark is a dying man.

Doctors say a massive brain tumor will kill him in the next two years.

But before he goes, Clark wants to settle a score--with the insurance company that dropped him as a customer when his illness was initially diagnosed.

The Prudential Insurance Co. of America rescinded Clark’s $94,000 life insurance policy two years ago after he told company officials that he had an inoperable brain tumor. Company officials contend Clark concealed his illness from them when he purchased his policy.

The case is set for trial this week in Ventura County Superior Court, and Clark and his attorney, Allen R. Ball, are already claiming victory. On Feb. 23, company attorneys conceded that several signatures on Clark’s application form were forged.

After the surprising admission, the company agreed to reinstate Clark’s policy and offered an additional $150,000 to dismiss the suit, Ball said. That figure was the original settlement demand Clark made last year.

But Clark turned it down.

“I don’t want anybody to go through what I have gone through,” he said. He and his attorney said they will ask a Ventura County jury to punish Prudential and award Clark a substantial judgment.

Lawyers and investigators across the country contend that Clark is not alone. Insurance companies, they say, routinely forge documents and use deceptive sales techniques to generate more commissions at the expense of policyholders. Ball plans to introduce evidence of these abuses, as well as tell of the personal sufferings of a man who lost his business, his home and his family.

“I’m angry,” Clark said.

Angry because The Prudential Insurance Co. of America accused him of fraud and rescinded his policy. Angry because Prudential officials “straight-up called me a liar” when it now appears that some key documents in the case were forged.

Prudential, however, is holding its legal ground.

“This is really an unfortunate situation,” Prudential spokesman Robert DeFillippo said. “[But] we are arguing that Mr. Clark withheld information from us, and we rescinded his policy.”

Prudential said Clark, 41, concealed his terminal condition from company officials during a cursory medical examination when he bought the policy in July 1993. Officials said they would not have issued the life insurance policy if Clark had told them about his tumor, which they say was diagnosed a week before his physical exam.

Clark denies he concealed anything from anybody and contends the company practiced fraud.

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So Clark sued Prudential in June 1995 for dumping his policy.

He contends that his medical examination occurred three months before his tumor was diagnosed and that unscrupulous workers changed the date of the exam and forged his signature. Further, he alleged that his signatures were forged throughout the application and supporting documents.

On the eve of trial, company lawyers faxed Ball a two-page letter acknowledging that even their own handwriting expert concluded that many of Clark’s signatures on his application were “not genuine,” the letter states.

Ball charges that this is common practice. “It’s just what they do routinely,” he said. “It goes directly to the heart of our case.”

The company’s letter announces that Prudential reinstated Clark’s life insurance policy and was waiving all past due and future premiums of $99.77 a month. But the letter states that the possibility of forgery did not alter Prudential’s contention that Clark lied about his health.

To prove to the jury that the company acted maliciously and Clark deserves a punitive judgment, Ball intends to argue that Clark is just one of thousands of customers who Prudential--the largest life insurance carrier in the nation--has allegedly defrauded with deceptive sales techniques and forged insurance forms.

Prudential is the target of a multi-state task force investigating allegations of “churning,” the practice of deceptively replacing policyholders’ insurance coverage with more costly policies that are often worth less than the original policy, said Kathleen Bird, spokeswoman for the task force.

In churning, which everyone--including Prudential officials--agrees is a widespread problem in the insurance industry, agents often forge documents to generate commissions while concealing the policy replacement from the customer.

“This company has not denied there are instances of churning,” DeFillippo, the Prudential spokesman, said. “But churning is a problem that exists in the insurance industry.”

Ron Parry, a Kentucky lawyer who has filed a federal class-action lawsuit against Prudential alleging illegal churning activity, agrees with DeFillippo’s assessment of the industry.

“Forgery is widespread in the insurance industry,” he said. “Insurance salesmen get very aggressive at times. No company has a patent on forgery.”

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But Prudential is the sole target of the multi-state task force, Bird said. Insurance investigators from 30 states, including California, have spent the last year reviewing 45 million transactions covering 5 million Prudential policies. A report is due sometime next month, and Prudential could be fined if any wrongdoing is found, said a task force spokeswoman.

The allegations that sales commission-driven Prudential agents routinely forge documents will be presented to the Ventura County jury, Ball said.

Ball said he will argue that forgeries and fraud are rampant throughout Prudential Insurance and will call a former executive to the stand to bolster his case.

Howard Siegel plans to testify--according to a sworn deposition taken earlier this month --that agent forgery was a “fairly common practice” at Prudential during his tenure as district manager of the Woodland Hills sales office, where Clark’s policy was handled.

He was fired in 1993 and has filed a wrongful termination suit against the company, alleging he was “terminated for being a whistle-blower” and reporting churning, forging and other “immoral” activity to his superiors.

But the company contends that Siegel was fired for padding his expense account and approving unauthorized cash advances to his subordinates. The case is pending in Los Angeles County Superior Court.

After losing his insurance coverage, Clark spends his days “living on Advil” to keep the constant headaches away, wondering what happened to his life.

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Three years ago, he was a successful paving contractor with a bachelor’s degree in aquatic biology and lived in a five-bedroom house in the hills above Ventura College with his wife.

“I paid taxes on $150,000 a year,” he said of 1993.

But after he was diagnosed with the tumor, doctors declared him disabled and Clark was unable to work. His wife filed for divorce. He filed for bankruptcy and lost his house soon afterward.

He moved into a trailer in Santa Paula on the site of his business’ old equipment yard, where he lives today. It is only when he recounts those losses that tears well up in his eyes.

Clark said he has come to grips with his death and talks openly about his tumor. But losing his house and going through a divorce “has been one hell of an emotional roller coaster, that’s for sure.”