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Jury awards $9.9 Million Punitive Damages in case involving Pre-Paid legal services

Posted on Nov 18, 2005

Jury awards $9.9 Million in case involving Pre-Paid legal services Thursday, November 17, 2005 1:12 PM CST JACKSON (AP) - A Holmes County jury has ordered a company offering legal representation in exchange for monthly membership dues to pay a Durant woman $9.9 million in punitive damages for fraudulent marketing practices. Barbara Booth was also awarded $40,000 in an earlier compensatory trial against Ada, Okla.-based Pre-Paid Legal Services. Doug Minor, an attorney representing Booth, said Pre-Paid had informed customers that it would provide unlimited legal services in any type of legal proceeding in exchange for the monthly payments. Attorneys said Booth paid $25 a month for more than two years to Pre-Paid, a company founded by its current president, Harlan Stonecipher. When Booth sought legal help on four separate occasions she “was either charged for more money, or told to handle the problem herself,” Minor said. The jury found that Pre-Paid's sales pitch misrepresented the extent of legal coverage that its clients ultimately received, Minor said. “We are pleased that the jury recognized the fact that there is a significant difference between what Pre-Paid and Harlan Stonecipher said about the product sold to Ms. Booth, and thousands of other Mississippians, and the truth of what that product really is,” said Brad Pigott, an attorney who also represents Booth. “Ultimately, the testimony of Mr. Stonecipher and the Pre-Paid sales associates proved our case for us.” During court proceedings this week, the jury was shown a video of speeches made by Stonecipher, including one in which he told a gathering of Pre-Paid sales associates: “Three Cheers for Greed,” as he tore $100 bills in half. Robert Gibbs, Stonecipher's attorney, said the video was taken out of context and was not used as a marketing tool. “We don't believe that the evidence supported the verdict,” Gibbs said. “We are going to explore our options and an appeal is very likely.” Booth still has not received the $40,000 she was awarded in the first trial. The law firm that represented Booth has more than 400 clients who were customers of Pre-Paid. “We have made a decision to try several additional cases against the defendants,” Minor said. In the first case, Booth was awarded damages for actual injury or economic loss. Punitive trials represent damages awarded as a punishment.

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