In the case of Etheringon v. Owners Insurance Co., the U.S. 10th Circuit Court of Appeals affirmed a $2.25 million verdict against a car insurance company for engaging in bad faith during settlement of an underinsured motorist (UIM) case.
According to the complaint, the insurer was sued for breach of contract and unreasonable delay or denial of a claim for benefits.
Bad faith insurance cases, while they may be arduous to pursue, are important for two big reasons:
- They can result in treble (triple) damages for those who suffered injury;
- They provide incentive for insurance companies to deal fairly with customers.
It is not all that unusual for an insurer to offer a low-ball settlement if they think they can get away with it. In most cases, with the assistance of an experienced Boca Raton personal injury attorney, you can negotiate a fair settlement. However, in cases where insurance companies simply refuse to budge, a bad faith lawsuit may be worth pursuing.
The court records in this case explains plaintiff was rear-ended in December 2007 and suffered a back injury. Even though his car only sustained minor damage, his back was seriously injured and he underwent three back surgeries to repair damage to to the discs in his spine.
Because the other driver did not have adequate insurance to cover his injury, he filed a claim with his own insurer seeking uninsured/ underinsured motorist coverage. He had up to $1 million in UM/ UIM coverage of his own.
He requested payment of $750,000, which was the remainder of what was left over after he settled with the other driver for $250,000 – the limit of that driver’s auto insurance policy.
There was months of back-and-forth, and yet the insurer insisted it would pay significantly lower than the policy limit – $150,000. The insurer cited “serious questions of causation of (plaintiff’s) injuries.”
Additional communications failed to resolve the issue.
As a result, plaintiff filed a bad faith lawsuit.
Defendant filed a motion prior to trial seeking to suppress the expert witness testimony of plaintiff’s expert witness, arguing his methodology was not reliable. At a Daubert hearing (intended to vet the scientific methodology of expert witnesses), the judge concluded the expert witness’s testimony was reliable and could be considered by jurors.
Jurors returned a verdict in favor of plaintiff, arguing economic losses of $857,000 and non-economic losses of $375,000. Physical impairment and disfigurement damages were set at $150,000. He was initially awarded $1.5 million total, but then he was granted additional compensation for breach of contract ($750,000) and unreasonable delay or denial of claim ($750,000).
Trial court denied defense motion for judgement as a matter of law not withstanding the verdict on the basis of unreliable expert witness testimony.
However, the trial court did grant plaintiff’s request to amend the damage, as state law (this was Colorado) allows not only breach of contract damages multiplied by two, but also double his covered benefits in addition to any damages.
Defendant appealed, but the 10th Circuit affirmed.
Justices carefully reviewed the affidavits, depositions and testimony provided by plaintiff’s expert witness, a medical doctor who testified as to the seriousness and causation of plaintiff’s injuries. They concluded both his qualifications and his methodology was sufficient and met appropriate standards.
If you have been injured in an accident, contact the Hollander Law Firm at (888) 751-7770 for a free and confidential consultation. There is no fee unless we win.
Etheringon v. Owners Insurance Co., July 19, 2016, U.S. Court of Appeals for the 10th Circuit
More Blog Entries:
Bernardoni v. City of Saginaw – Sidewalk Trip-and-Fall Accident Lawsuit, July 19, 2016, Boca Raton Car Accident Lawyer Blog