In a twist, Cook County wins $9 million verdict tied to jail strip-search settlement
Tuesday, March 20, 2018
by Steve Schmadeke
Cook County has won a $9 million jury verdict against an insurance company whose alleged screw-ups cost the county millions in a massive federal lawsuit over jail strip searches.
The county settled that class-action lawsuit in 2010, paying out $55.3 million to compensate as many as 250,000 people who were strip-searched at the county jail, often in mass lineups and even if they were detained for traffic violations
But the county had to pay much of the settlement from its own pocket after its insurer, USI Insurance Services Corp. of Illinois, allegedly failed to get extra insurance the county had requested. The county wanted excess coverage after it lost a series of court battles in the federal case in 2006 and faced $1 billion worth of liability, according to the county’s lawsuit against the insurer.
The county paid $1.4 million for $20 million in excess insurance to cover the alleged “wrongful acts” at the jail, according to a lawsuit by the county.
But those new policies were never purchased, according to the lawsuit.
A Cook County jury found Friday that USI failed to live up to its end of the contract, court records show, and ordered the company to pay $9.05 million.
Initially, the county turned to its insurers to pay out the $55 million settlement, but the companies didn’t deliver, according to the lawsuit. So the county dug into its coffers — funded by taxpayers — and paid $40-plus million to plaintiffs in the strip-search case — less than the agreed upon settlement. But the county offered a sweetener to the plaintiffs: Any money recovered in legal action against multiple insurers would go to them.
In addition to UIS, the county separately sued AIG — after the insurance giant also refused to contribute to the settlement, according to court records.
AIG ultimately settled the separate breach of contract case for $52 million,with $10 million going to the county and the rest going to the plaintiffs.
In 2012, the county went after UIS for $20 million, alleging it had breached its contract and fiduciary duty to the county; a jury awarded a little less than half that last week.
A Cook County spokesman declined to comment on the verdict. Representatives for USI could not be reached for comment.