Articles Posted in Insurance Issues

Last month, an appellate court in Connecticut issued a written opinion in a car accident case showing how a plaintiff’s award after a favorable personal injury case can be reduced – sometimes unfairly. In the case, Marciano v. Jimenez, the court ultimately determined that the plaintiff’s award should not be reduced due to the right of subrogation, which may result in the insurance company seeking payment from the plaintiff for previously paid benefits.

Wrecked CarThe Right of Subrogation

After an accident, medical costs are usually incurred. Often, an insurance company, or some other “collateral source,” will pay for these costs. Later, if the injured party seeks compensation for their injuries through a personal injury lawsuit and is successful, they will receive compensation for these very same injuries.

Some of that compensation may be designated for the pain and suffering caused as a result of the accident, but other amounts will likely be awarded to reimburse the injured party for the cost of the medical treatment they needed following the accident. If a collateral source paid these medical bills, that party may seek reimbursement from the injured party. This is called subrogation. A recent case serves as a good example.

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Earlier this month, a federal appellate court issued a written opinion in a case brought by a woman who was denied insurance coverage under her own underinsured motorist policy after she was seriously injured in a drunk driving accident. In the case, Peden v. State Farm, the court concluded that since the insurance company failed to conduct a thorough investigation prior to denying the plaintiff’s claim, the company may have acted in bad faith. As a result, the court reversed the lower court’s decision to dismiss the plaintiff’s case and permitted her to proceed toward trial against the insurance company.

VanThe Facts of the Case

Peden was injured in a drunk driving accident as a passenger in a friend’s van. On the day in question, Peden was at a birthday celebration for a friend who had just received a van from her fiancée, Mr. Graf, as a gift. At some point in the evening, several friends piled into the van so that Graf could take a picture. However, Graf unexpectedly got into the driver’s seat and took the van for a joyride while he was intoxicated. Graf crashed the van, injuring Peden, who then filed a personal injury lawsuit against him.

Both Peden and Graf were covered by a State Farm insurance policy. Initially, State Farm settled Peden’s claim involving Graf’s policy, but Peden claimed her damages were not fully covered and filed a claim under her own policy’s underinsured motorist provision. State Farm denied the claim, explaining that Peden got into the vehicle with a driver she knew to be drunk, and therefore she assumed the risk of injury.

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Car accidents happen all of the time and often result in serious injuries. Normally, an injured party can recover compensation for their injuries from another driver if the other driver was at fault for the accident. However, many drivers fail to obtain the proper insurance for their vehicles. In that situation, this means an injured motorist can only recover compensation if they have uninsured motorist coverage through their own insurance.

Car AccidentIn a recent case, a court considered a claim for uninsured motorist coverage and found the driver was able to receive his award without having it reduced by the money already paid by his insurer. The man was in a car accident with an uninsured driver and sustained serious injuries. The man had car insurance, which provided a total of $300,000 in uninsured motorist coverage and $5,000 in medical payments. His insurer paid the man’s medical bills up to the policy limit of $5,000 for medical payments in his policy. The man also made a claim for uninsured motorist coverage, but his insurer disputed the claim.

The man filed a lawsuit against his insurer for refusing to pay. The court found in his favor and awarded him over $68,000. But the court reduced the award by the $5,000 already paid by his insurer for medical bills. However, the state’s supreme court found the award should not have been reduced by $5,000. The court explained that statutory language barred the reduction in this case. As a result, the award was reinstated.

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Earlier this month, a state appellate court issued a written opinion in a car accident case, holding that a plaintiff’s failure to file her claim within the three-year period outlined in the policy contract was excusable because the insurance contract was internally contradictory. In the case, State Farm Mutual Auto Insurance v. Jakubwicz, the court held that any inconsistency in an insurance contract should be construed in favor of the insured, and State Farm should have allowed the plaintiff’s claim.

Signing a ContractThe Facts of the Case

Jakubwicz and her two sons were in an accident involving another motorist. Jakubwicz filed a timely lawsuit against the other motorist, who was responsible for the accident. A little over three years after the accident, Jakubwicz realized that the other party’s insurance coverage was insufficient to cover the cost of her family’s damages, so she filed a claim under the underinsured motorist provision of her own policy with State Farm.

State Farm denied the claim, pointing to language in the insurance contract that requires all claims to be filed within three years of an accident. However, in response, Jakubwicz pointed to another clause in the policy indicating that State Farm will only pay out on an underinsured motorist claim when the underinsured motorist’s own insurance is exhausted.

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Earlier this month, a Michigan appellate court issued a written opinion in a case involving a woman who was struck by a vehicle that was insured by State Farm in which the alleged damages were just $25,000, but the actual damages were far greater. In the case, Hodge v. State Farm Mutual Automobile Insurance Company, the court determined that the plaintiff proved damages far greater than the $25,000 jurisdictional limit of the court where the case was filed.

Broken Taillight

The Facts of the Case

The plaintiff was struck by a car that was insured by State Farm. The plaintiff filed a lawsuit against State Farm, seeking compensation for her injuries. She filed the lawsuit in District Court, which has a jurisdictional limit of just $25,000. This means that the court cannot hear cases that seek damages in excess of $25,000.

In her pleadings, the plaintiff sought damages of just $25,000. However, she presented evidence indicating that the actual damages incurred were closer to $150,000. State Farm asked the court to prevent the plaintiff from introducing any evidence that would show her damages were greater than $25,000, since that is all that she would be able to recover in the court in which she filed the case.

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Taxi-cabs may be a thing of the past. Companies such as Uber and Lyft offer people seeking a ride the ease of opening an app on their phone and securing a ride with a few clicks on their phone. The people providing these rides are often regular drivers who are looking to make some extra cash on their time off. They rarely have commercial driver’s licenses, and they are not required to get any special training before they can accept customers.

taxi-cab-381233_960_720While convenient for many, this new model presents several legal issues if someone is struck by an Uber or Lyft driver. Whether the driver has a customer in the car may determine the level of assistance that the company will be willing to provide to the driver, and in turn to anyone hurt by the driver’s negligence.

The way the new model of ride-sharing works is that drivers can roam around waiting for fares to pop up on their smart phones. According to one article analyzing the potential legal implications, the process breaks down into three steps. First, the driver turns on the app and looks for a passenger. Second, the app matches the driver and the passenger. And third, the driver picks up the passenger and takes them to their destination. In the latter two stages, Uber or Lyft will likely cover the driver if anything goes wrong. However, if an accident occurs while a driver is roaming and waiting for a fare to come in, the company may deny any involvement.

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Earlier this month, a Florida appellate court issued a written opinion in a case brought by a motorist against his own insurance company, after he was involved in a collision with an uninsured motorist. In the case, Fridman v. Safeco Insurance Company of Illinois, the plaintiff was injured after being struck by an uninsured motorist, and he sought compensation within the $50,000 policy limit of his insurance policy with the defendant. However, the defendant denied his claim. Ultimately, a jury awarded the driver $1,000,000 based on the insurance company’s bad-faith denial of the claim, and the court upheld that verdict.

car-85320_960_720The Facts of the Case

The plaintiff was injured in a 2007 motor vehicle accident. Since the other driver was uninsured, the plaintiff filed a claim with his own insurance company for $50,000. The insurance company denied his request. He then filed a lawsuit against the insurance company, alleging bad faith in failing to settle his claim and seeking the full amount of compensation for his injuries, which “shall include the total amount of the claimant’s damages, including the amount in excess of the policy limits.”

The insurance company then cut the plaintiff a check for $50,000, the limit of his policy. The plaintiff refused the check as an offer to settle the case and opted to allow a jury to determine what his compensation should be. The jury ultimately determined that the plaintiff was entitled to $1,000,000 in compensation for his injuries, as well as for the bad faith of the insurance company. The insurance company filed an appeal, asking the court to consider the $50,000 check a final settlement that preempted the plaintiff’s case at trial.

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