A new class action lawsuit accuses State Farm of refusing to pay statutory interest on arbitration awards and judgments awarded to claimants against the insurance company.
According to the complaint, on Oct. 6, 2022, the Fishers received an arbitration award against State Farm obligating the insurance giant for payments to the Fishers, due on Oct. 7. The awards amounted to a total of $35,000.
According to the complaint, State Farm remitted the total to each individual in December. At that time, despite arriving two months after the arbitrator's order, the award did not include interest allegedly accrued on the late award payment.
According to the complaint, Illinois law requires interest on arbitration awards to accrue and be computed annually, until the award is paid in full. The Fishers are alleging that State Farm has adopted a pattern and practice of withholding interest on these awards. According to the complaint, they believe this has potentially impacted thousands of other State Farm claimants.
According to the statute, judgments recovered in any court draw interest at the rate of 9% per annum from the date of the judgment until satisfied or 6% per annum when the judgment debtor is a unit of local government.
The Cook County complaint marks the latest lawsuit in which State Farm has been accused of similar conduct. In October 2021, a different class action in California asserted State Farm had “systematically and uniformly underpaid” claims made by thousands of consumers who suffered the total loss of their vehicle.
In December of the same year, the U.S. Court of Appeals for the Eighth Circuit ordered State Farm to pay $4.5M in prejudgment interest to policyholders who alleged the insurer overcharged them on life insurance policies after the Eighth Circuit ruled in favor of the consumers.
Plaintiffs are represented by attorneys Jerome E. Boyle, of Block Law Associates, of Chicago and Mike Davis, of Mike Davis and Associates, of Chicago.
Plaintiffs are demanding a trial by jury and are seeking damages in the form of unpaid interest due on the arbitration awards, court costs and legal fees.