WellPoint is named in sexual-battery suit

Times Staff Writer

A month after WellPoint Inc. ousted David C. Colby, the nation’s largest health insurer is being dogged by salacious allegations about his personal life -- and charges that it was negligent.

The company, which owns Blue Cross of California, was named as a defendant Thursday in a lawsuit that accuses Colby of sexual battery, breach of contract and infliction of emotional distress.

Sarah Waugh, who worked for WellPoint when it was called WellPoint Health Networks Inc. and headquartered in Thousand Oaks, says in the suit that while Colby was the company’s chief financial officer, he maintained “concurrent relationships” with her and more than 15 other women and “acted with the intent to cause” her harm.

Waugh seeks unspecified damages for “humiliation, mental anguish and emotional and physical distress.” WellPoint, her suit suggests, was aware of Colby’s alleged romantic entanglements but did nothing to protect her.


Colby, 53, was let go May 30 for what the company, now based in Indianapolis, called nonbusiness-related violations of its code of conduct.

A lawyer for Colby didn’t return phone calls. A WellPoint spokesman declined to comment on the suit, which was filed in Los Angeles County Superior Court.

In the suit, Waugh, 29, says she began dating Colby in 2001, when she worked for WellPoint. Their relationship continued after she left the company, the suit says, and Colby sent her an “almost constant stream of e-mails and text messages, and repeatedly professed his desire for unprotected sex in a committed monogamous relationship.”

He wasn’t faithful, the suit claims, and engaged in “high-risk sexual practices with others ... some of whom have contracted STDs” -- sexually transmitted diseases. WellPoint “facilitated defendant Colby’s lifestyle,” the suit says, with company employees arranging personal and business trips for Waugh and other women who traveled with Colby -- including her younger sister, Jessica -- and with high-level employees often traveling with Colby and the women.


At the same time, the suit says, WellPoint “benefited from the outward appearance of respectability and propriety of their CFO.”

A Wall Street favorite, Colby was widely credited with the financial success of the healthcare giant. He earned a salary of $740,000. Two months before his ouster, the board gave him the title of vice chairman and stock options then worth $1.7 million. Since June 15, he has sold more than $100 million worth of WellPoint stock, the suit claims.

Days before the board asked Colby to resign, Rita DiCarlo, a registered nurse who has lived in his Lake Sherwood home for more than two years, sued him, alleging that he had reneged on a promise to give her the $4.4-million property. Like Waugh and several other women, DiCarlo claimed that Colby promised to marry her.

DiCarlo and Waugh are represented by the same Los Angeles lawyer, Mark Hathaway, and have sold the rights to their stories to producer Larry Garrison, president of SilverCreek Entertainment.


Colby is separated from his second wife, Karenn, who filed for divorce in 2004.

Waugh’s suit alleges that Colby has said the board confronted him about his relationships in August 2006. The company has declined to say whether the board met in August for any reason. In announcing Colby’s resignation, WellPoint Chairman Larry Glasscock said concerns about his behavior had come to light only “in recent days.”

According to Waugh, she was fired by WellPoint after she made complaints, which are not detailed in the suit, about Colby. Colby then began making unspecified monthly support payments to her, and, on one occasion, gave her $12,000, the suit claims. When Waugh attempted to break off the relationship at one point, it says, Colby spray-painted her car and later paid her $2,000 for repairs.

Colby allegedly allowed Waugh to live in his Lake Sherwood home for a while and took her on trips to WellPoint functions arranged by company employees. The suit says Colby repeatedly promised to pay for private schooling for Waugh’s son and to continue to support her even if their relationship ended. It alleges that he reneged by stopping the payments when the relationship recently ended.


The suit describes how Colby allegedly met women on Internet dating sites and in chat rooms. On, the suit says, he described himself as a divorced “GolfingCFO,” seeking a “unique woman who is warm and affectionate when I am home but who is independent enough not to be upset when I work long hours or have to travel.” Because of his job, the woman would have to be “comfortable at both Black-tie galas and employee picnics on the beach.”

Colby pointed prospective dates to WellPoint’s website and online information describing his “status as a well-respected and successful corporate executive,” the suit says.

In almost every case, he offered and made monthly support payments to the women, promised to continue the support if the relationship ended, text-messaged and e-mailed them frequently and repeatedly said he wanted a “committed monogamous relationship,” the suit says.

In the case of a woman identified in the suit only as “Beverly M.,” Colby allegedly met her in an Oak Park Starbucks after contacting her through an online dating site in February. He told her he was divorced and had not had sex with anyone for more than three years, the suit says.


Even after The Times and other newspapers ran stories about his alleged hectic love life, the suit says, Colby sent text messages to Beverly M., telling her “there are no other women, I am coming for you next week and we will be together; ‘It’s real!’ ”