St. Paul Fire and Marine Insurance Co, a subsidiary of Travelers, has been ordered to pay $43.8 million in connection with a bad faith lawsuit involving a wrongful conviction case in Missouri.
The payment stems from a long-running legal dispute initiated by Ryan Ferguson and a group of former Columbia, Mo., police officers. Ferguson was convicted in 2005 for the murder of a local sports editor and later exonerated in 2013.
In 2014, Ferguson filed a civil rights lawsuit against the city, which held law enforcement-liability coverage through St. Paul beginning in 2006.
The insurer contested coverage, arguing that the underlying conviction predated the start of its policy. However, Missouri state Circuit Judge Glen A. Dietrich determined that the policy language did not require the injury or damage to have occurred during the coverage period.
The Missouri Court of Appeals later affirmed this interpretation, referencing St. Paul Fire & Marine Ins. Co. v. City of Zion, a 2014 Illinois case with similar facts. In both instances, courts found that prosecutorial conduct, rather than the date of conviction or arrest, could trigger policy coverage.
Ferguson's legal team first made a policy limits demand in 2015. The following year, the court awarded Ferguson $11 million. Because the officers named in the suit could not pay more than $2.7 million, Zellner proceeded with garnishment and bad faith actions against St. Paul.
In 2018, the Western District Appellate Court of Missouri upheld a $5.4 million award to Ferguson. An appeal by Travelers to the state supreme court was unsuccessful.
Although St. Paul paid that amount in 2020, the officers’ separate bad faith claim continued. (AC) In November 2024, a jury awarded $37.9 million in damages, with 14% – approximately $5.3 million – allocated to the officers. This verdict formed the basis for the final award calculation.
With interest and court-related fees added, the total judgment amounted to $43.8 million, according to a June 16 order issued by Cole County Circuit Court Judge S. Cotton Walker.
Missouri law permits additional financial penalties in cases involving vexatious refusal to pay insurance claims. These include the recovery of interest, attorney’s fees, and punitive damages up to 2% of the value of the claim. The court found that St. Paul’s actions met the criteria for such penalties, contributing to the final award amount.
In determining whether bad faith occurred, Missouri courts evaluate factors such as whether the insurer lacked reasonable cause or excuse in denying or delaying payment. It is not enough that coverage was eventually provided; instead, courts focus on the handling of the claim and the timing of settlement efforts. In this case, the insurer’s refusal to meet policy limits demands or resolve the claim in a timely manner led to a finding of bad faith.
Zellner said that the award represents the largest bad faith verdict nationally involving a wrongful conviction.
"This verdict sends a clear message to insurance companies across the country that these claims are to be taken seriously, and these wrongfully convicted individuals are going to be justly compensated for the stolen years of their lives," she said.
What are your thoughts on this story? Please feel free to share your comments below.
