Yesterday I joined Vicki McKenna on Madison, Wisconsin’s WIBA to discuss Katrina insurance litigation as well as the Supreme Court’s punitive damages rulings. And on Jan. 23 I was a guest on Jim Blasingame’s national “Small Business Advocate“.
Posts Tagged ‘insurance’
Florida Supreme Court: Forum Shoppers Need Not Fly South for the Winter
Insurance Journal reports that the Florida Supreme Court has rejected an attempt by seasonal residents to apply more favorable Florida rules to their claims under non-Florida auto insurance policies:
‘Snowbirds” and other part-time Florida residents who insure their cars back home cannot make claims under Florida laws that may be more favorable to them than those in their own states, the state Supreme Court has ruled.
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‘Although Florida welcomes its many visitors, whether for short or extended stays, we cannot rewrite their out-of-state contracts,’ Justice Raoul Cantero wrote for the high court.
Interested readers can view the full Opinion [PDF] in State Farm Mutual Ins. Co. v. Roach, Case No. SC04-1313 (Dec. 14, 2006).
Jackpot justice: $20M for $25,000 insurance claim
Ted Fields was injured in an auto accident with Jimmy Woodley; Woodley’s insurer went bankrupt, so Fields, on January 30, 1997, asked Allstate to pay $25,000 in medical bills and lost wages. Allstate sent Fields forms to fill out, and he did so three weeks later; when Allstate didn’t pay instantaneously, he sued them in March 1997 for bad faith. Fields turned the discovery process into a far-reaching investigation of all of Allstate’s claim procedures; the judge refused to constrain irrelevant deposition questioning, at which point in 1999 Allstate offered Fields the full amount of his $50,000 policy limit rather than waste hundreds of thousands in trial. Fields refused; his attorneys filed several separate motions of default rather than litigate the underlying issues after the trial court denied a summary judgment motion. An appellate court found that Allstate was entitled to summary judgment because of the lack of any evidence of bad-faith in responding to Fields’s claims; the Indiana Supreme Court overturned that ruling on a procedural technicality that the appeal was premature.
The trial court ruled that Allstate was not allowed to present evidence that it was not liable for actual or punitive damages or that it acted “with anything other than dishonest purpose, moral obliquity, furtive design, and/or ill will.” A jury, hearing this one-sided sham of a trial, awarded $20 million in damages, though one would hope the Court of Appeals, hearing a timely appeal, makes the same decision it made before. Press coverage fails to mention that Allstate wasn’t allowed to defend itself at trial; the plaintiff told the jury that the dispute caused high blood pressure, heart problems, and a stroke, though then the question becomes why he isn’t suing his attorney. (Ken Kosky, “Valpo man wins $20 million verdict v. Allstate”, Northwest Indiana Times, Oct. 6).
New Times column — Katrina verdict
My new column at the Times (U.K.) Online is on last week’s Mississippi Katrina insurance verdict. (Walter Olson, “Insurers can breathe easier over Katrina lawsuits”, Aug. 30). Concluding paragraph:
Major coverage issues remain to be resolved (and appealed), but at least we can take note at this point that America is not Zimbabwe or Bolivia. As Dickie Scruggs said before the Leonard ruling, “If you win it, it’s a huge win. If you lose it, you spin it the best way you can.”
Also, I was a guest last evening (6:30 p.m. Eastern) on Marc Bernier’s high-rated radio show, “The Talk of Florida” to discuss the article.
Welcome Shane Warner listeners
Center for Justice & Democracy and Americans for Insurance Reform
Martin Grace and I have written a Liability Outlook for AEI looking at the last several years of CJD/AIR studies on medical malpractice. The conclusion? “In many ways, the problem with AIR’s reports is a perfect microcosm of what doctors find most distasteful about the liability system: a trial-lawyer mentality that cherry-picks facts and twists data to reach knee-jerk conclusions under the guise of a false science.” See also Jim Copland’s dissection of one such study at Point of Law on Jul. 8.
We look forward to Kevin Drum giving this paper the same deference he credulously gave AIR’s last bogus report.
One flaw of the paper is that we didn’t include the story of “Bob,” the dummy literally used to scapegoat insurance-company executives by CJD at an ATLA conference. For other CJD shenanigans, see Dec. 23, 2004 and Mar. 19, 2004. (Cross-posted at Point of Law.)
Free Market Project & Katrina insurance lawsuits
The Free Market Project covers anti-business media bias, and has been issuing weekly exposes of media coverage of the various lawsuits over insurance companies’ flood exclusions: Oct. 5, Sep. 28, Sep. 14. Our coverage: Sep. 15, Sep. 12; POL Sep. 28, Sep. 26, Sep. 25, Sep. 23, Sep. 22, Sep. 9. I spoke about the issue at an AEI panel I moderated on October 3 that was broadcast on C-SPAN2. Transcripts will be posted in the next couple of weeks on the AEI site.
Hiatus and rehosting update
Readers were not shy about recommending hosting services (thanks for all your emails!) and I’ve now decided to go with Hosting Matters, which has many articulate fans and seems to make a specialty of Movable Type-based blogs. It’ll probably be a few days more before the site is back up and running.
In the mean time, you can follow both my and Ted’s postings at the Manhattan Institute site Point of Law, which has been extra-busy lately (see, for example, its reprint of Ramesh Ponnuru’s fascinating National Review article on trial lawyers and social conservatives). I’ve been juggling a number of other deadlines and published a “Rule of Law” op-ed column on Hurricane Katrina and flood insurance last Saturday in the Wall Street Journal (sub) (more on that). (Bumped 9/30).
Mississippi high court overturns hellhole insurance verdicts
Why are some Mississippi courts considered judicial hellholes? Witness the trial of the breach-of-contract dispute between local insurance businessman Carroll Hood and his HICO versus St. Paul Insurance. HICO remained profitable after they agreed to reduced commissions and raised rates for selling St. Paul insurance (and there’s no indication why they thought St. Paul didn’t have the right to raise rates), but then turned around and sued St. Paul for “tortious breach of contract.” Though the contract required disputes to be litigated in Texas, the court permitted the case to go to trial, permitted the plaintiffs to add a new theory of liability in the middle of trial without warning, permitted $1.2 million damages to be awarded for “mental distress” over a contract dispute between sophisticated businessmen, and then allowed a jury to award $75 million in punitive damages–thirty times the already-inflated compensatory damages. (The jury actually wrote $75,000,000,000 on their verdict form, but the judge decided that this was a confusion over how many zeroes were in a million.) St. Paul also complained that the judge encouraged the jury’s bias against out-of-state companies. The Mississippi Supreme Court threw out the verdict on the easiest of grounds: the Mississippi court never had jurisdiction over the case because of the explicit forum selection clause in the contract being sued on. (AP, “Miss. Supreme Court Overturns $80 Million Breach of Contract Verdict”, Insurance Journal, Nov. 22; Jimmie Gates, “Justices toss out $77.5M jury award”, Clarion-Ledger, Nov. 25; Titan Indemnity Co. v. Hood opinion).
Another sign of hope: on September 9, in Gallagher Bassett Services, Inc. v. Jeffcoat, the Mississippi Supreme Court threw out a $3.5 million verdict against an insurance adjuster that negligently failed to pay an uninsured motorist claim (with a policy limit of $10,000) for all of ten months. If this trend continues, Mississippians might find that insurance companies can more affordably offer insurance.
Bad lawyer files: Fourth yacht’s the charm
Or, “Not only loose lips sink ships.”
Bloggers Grace and Wallace point us to the tale of the infamous (and now suspended) attorney Rex DeGeorge, which has important lessons how the plaintiffs’ bar has made insurance more expensive for all of us: because insurers who suspect fraud risk substantial liability for “bad faith” denial of coverage (e.g., May 5, where an insurer who merely investigated an $8,000 chiropractor’s bill was hit with a $150,000 judgment), insurance scamsters can manipulate the system by threatening a suit. For an individual case, simply defending the non-payment may be more expensive than making the payment; even on a systematic basis, the risk of losing a case and facing punitive damages can put insurers in a bind. This is lengthy, but worth it.