A Sequoyah County jury has handed down what may be the largest verdict in the county’s history and is among the largest ever in the state, awarding more than $50 million in punitive damages to two local homeowners who sued Farmers Insurance Company along with two local insurance agents for bad faith and breach of contract.
The plaintiffs, Doug Chaney and Tandy Meyers of Sallisaw, sued Farmers Insurance and two local insurance agents after a November 2018 storm caused extensive damage to their home and horse barn. The verdict, delivered on April 18, 2024, included $17.5 million in actual damages and a staggering $32.5 million in punitive damages against Farmers alone. Additional punitive awards of $100,000 and $50,000 were assessed against agents Candace Cauthon and Matthew Cauthon, respectively.
This is a message verdict that tells major insurance companies that if they fail to uphold their obligations to policyholders in Oklahoma, there will be consequences.
Breach of good faith
Chaney and Meyers had been insured through Farmers for years when a violent storm hit their Sequoyah County property in late 2018. Despite having what they believed was full coverage, Farmers allegedly refused to pay the full amount of their claim. The lawsuit accused the insurer of intentionally misrepresenting the policy’s coverage, delaying investigation and acting in bad faith.
According to court documents, the plaintiffs complied fully with the terms of their policy, but Farmers “failed and refused” to tender full payment, prompting the lawsuit in 2019.
The jury found that Farmers not only breached its duty of good faith and fair dealing but did so recklessly and with malice, clearing the way for the massive punitive award. Under Oklahoma law, punitive damages are capped at the greater of $100,000 or the amount of actual damages awarded, unless malice or reckless disregard is proven by clear and convincing evidence, a threshold the jury clearly found had been met.
Agent negligence
The lawsuit also targeted the insurance agents who sold the policy, Candace and Matthew Cauthon. The plaintiffs accused the pair of negligently failing to procure appropriate coverage, which compounded their losses when the storm hit.
The jury found both agents liable for negligence, and that Candace Cauthon acted with malice. She was ordered to pay $100,000 in punitive damages. Her husband, Matthew, was assessed $50,000.
Legal, historical significance
The total award of $50,150,500 places the case among the largest jury verdicts in Oklahoma history. According to publicly available records, the largest known jury verdict to date in the state was more than $92.4 million in a separate bad faith case involving Great Lakes Insurance SE. That award included $65 million in actual damages and $27.4 million in punitive damages.
While the Chaney-Meyers verdict includes $17.5 million in actual damages, the sheer size of the $32.65 million in punitive damages, far surpassing the compensatory award, is notable. Legal experts say it underscores a growing willingness by Oklahoma juries to hold insurers accountable.
Sequoyah County isn’t known for massive jury awards, so this could set a new precedent, especially in rural parts of the state where jurors are often seen as more conservative.
