Omaha, Nebraska: Jury Awards Mother of 10 $11.3 Million After Finding Farmers Acted in Bad Faith

A Douglas County jury has awarded $11.3 million in damages to an Omaha mother of 10, finding that Farmers Insurance acted in bad faith in refusing to pay her husband's $350,000 life insurance policy after he died of COVID-19 in 2020.

The verdict, returned on October 16 after a three day trial in Omaha, was the second jury decision in the case brought by Vaneza Ramos. A first jury in March found that Farmers had breached its insurance contract and rejected the company's allegation of fraudulent misrepresentation. The October jury was asked a separate question: whether Farmers acted in bad faith, and what harm the denial caused.

A policy, a death and a denial

Farmers New World Life Insurance acknowledged that it issued a policy to Jose Gaytan on November 28, 2018, listing Ramos, his wife, as the sole primary beneficiary. Gaytan and Ramos raised a blended family of 10 children and ran a family business in Omaha, and the $350,000 policy was meant to replace his income if he died. Premiums were about $800 a month, according to her lawyers at Pesek Law.

In May 2020 the couple's youngest child was born. Later that month Gaytan was hospitalized with COVID-19, and he died on May 31, 2020. Farmers denied the claim in September 2020, contending that Gaytan had failed to disclose a heart attack, a myocardial infarction, that he had suffered that August before the policy was issued. Instead of the benefit, the company sent Ramos a check for $17,360.87 to refund the premiums paid on the policy. She did not cash it.

Her lawyers argued that the insurer had information it chose not to act on. Gaytan had texted his insurance agent about his hospitalization that August, and he answered yes on a medical questionnaire asking whether he had been treated, hospitalized or taken medication for a range of issues including high blood pressure, high cholesterol or heart attack. The trial team argued that the agent entered incorrect answers on the application and that Farmers disregarded information that should have prompted further investigation before it approved coverage and collected premiums. Farmers maintained that its investigation supported a reasonable basis for denying the claim.

Reversed on appeal, then two juries

District Court Judge Katie Benson initially granted summary judgment in favor of Farmers. In December 2024 the Nebraska Court of Appeals reversed and sent the case back to district court on the breach of contract and bad faith claims, saying Farmers had failed to establish that Gaytan intended to deceive the company and that genuine issues of material fact remained for a jury.

The March jury awarded the $350,000 policy benefit. Evidence in the October trial described the years between the denial and the verdicts: Ramos borrowed from family, her mother moved in to help care for the children, Gaytan's truck was repossessed, and their son set aside his own plans to take on substantial responsibilities in the family business.

"A promise to protect should not be broken," attorney Ross Pesek, who represented Ramos along with Alejandra Ayotitla, told jurors. In closing he compared the case to David and Goliath and said the verdict rested on the harm rather than the contract. "There is one moment that even Goliath fears. It's this moment. It's accountability because of a jury," he said.

Farmers attorney Quinn Eaton did not respond to a request for comment on the verdict, according to the Newsbank distributed report of the trial. The case is Ramos v. Farmers New World Life Insurance, Douglas County case CI 22-2057.