Betrayal of our client by the insurance company

Tom Metier, '94 Grad. Trial Lawyers College List Serve, 6/14/2012.

Warriors and Grad II'ers,

            Pleased to report that Mike Chaloupka (TLC '11) and I obtained a verdict against Auto Owners Insurance last Friday evening.

Gary was hit on Christmas day, 2006, while driving a full size Chevy GMC pickup.  SUV blew through a stop light and T-boned him on the driver's side.  Gary suffered 6 broken ribs and a torn labrum of the left shoulder which required arthroscopic surgery repair in April, 2007, followed by some PT.   Ribs completely healed.  No future medicals.  No past or future wage loss.  Medicals were $30,000, including the three day stay in the hospital immediately after the crash for pain management of the broken ribs.

Farmer's had the liability policy and paid $50,000 policy limits w/in the first year.  Gary had UIM coverage through Auto Owners of $500,000.  Auto Owners was given a medical release by Gary, but not a list of medical providers. In September, 2007  Auto Owners used the medical release to obtain the medical records contained in Farmer's adjuster file. Auto Owners never requested any medical records using the release at any time thereafter, electing instead to continue to try to place the burden of obtaining bills and records on Gary by writing a letter every 3 to 6 months asking for updated information and records/bills.  Gary never responded, completely confident that his insurance company, Auto Owners, would obtain all such records and information and be updated and ready to make an offer to him when he notified Auto Owners he was ready to settle.  After all, that is what they promised, wasn't it?

Auto Owners failed to investigate, evaluate and make an offer to Gary, forcing client to hire attorneys and file suit on December 22, 2009 (three days before the statute of limitations ran).

Auto Owners admitted defendant driver was 100% at fault, so trial was about injury causation, damages and unreasonable delay by Auto Owners.

            Auto Owner's defended by denying the nature and extent of the injuries;  by blaming our client for not providing names of medical providers;  by claiming that Auto Owner's couldn't evaluate the claim without the names of the medical providers; and by blaming Gary for not making a demand to which Auto Owner's could respond with an offer.

            Mike Chaloupka did a wonderful job of presenting direct exam of Gary and making clear his injuries and substantial distress at how he was treated by Auto Owners.  Mike also presented the lay witnesses at trial, keeping their testimonies short and powerful.  Mike presented the testimony of Dr. David Reinhard, who was Auto Owner's hand selected IME.  We did not call any treating physicians, electing to call defendant's IME, together with a physical therapist.

            As to TLC techniques,  Mike and I shared voir dire.  Mike was superb, immediately connecting with the jury in his smiling relaxed manner as he took over the  voir dire which I had started.   Mike had used several focus groups to prepare his case and to work through the themes he used with his witnesses.  Part of our discovery with our client Gary had to do with  Gary's deep distress at having to file a law suit to obtain insurance benefits for which he had paid.  He had purchased his UIM coverage so that his family would be protected and so that he specifically would not have to go to trial.  He was also concerned about how he would be perceived in his community if it was known that he had sued and gone to trial over a personal injury.  At the same time this very morally conscious man knew he had to stand for what was right.  Our theme was the insurance company betrayal of him on breach of their promise to investigate, evaluate, communicate and make a reasonable offer to him, so that he could avoid trial.

I used two focus groups the Friday before trial to test themes for framing of the case and related issues, the result of which allowed me to irrevocably frame the case with every juror with the first three questions of voir dire, which took an elapsed time of about 90 seconds.

Mike and I divided the trial by themes.  Mike presented the traditional personal injury damages, including the emotional damages arising from the crash and the testimony regarding emotional distress.  This was a case of admitted liability and the jury never would see the defendant driver, as he had settled out of the case two years before the case was filed.  Therefore we had to keep the "tension" of story focused in parallel on (1) the interruption of the relationship between our client and his wife due to his injuries and changed perceptions of himself; and (2) on the parallel tension of the theme of betrayal and the emotional distress it simultaneously created - (which is directed at the defendant insurance company).  Without such directed parallel tensions, the story would not be interesting to anyone.

Our strategy was to have Mike "undersell" the emotional and physical damages through the client's testimony, so that the jury would not be subjected to the "overkill" of describing these parallel damages twice, which would reduce the effectiveness of those elements of the story.  Mike's great internal sense of underplaying the damages on direct, yet setting the stage for a first person close I would do later in the trial, was far beyond his years of experience.

My themes were the betrayal of our client by the insurance company, including the story telling through adverse direct examinations of the insurance adjusters and managing adjuster, together with the cross-examination of the doctors called by the defense. A constant theme was that the insurance company was not looking for a fair resolution, as it had promised to do.   We tried the case on four words written on white butcher paper on an easel:

INVESTIGATION

EVALUATION

COMMUNICATION

OFFER

These four words were used to keep the jury focused on what the insurance company's duties were to our client at every stage of the trial.  Eventually the defense attorney had to respond to our case by pointing to and using the butcher paper with our four words in cross-examining our expert on insurance company duties.  As defense counsel did so, Mike and I broke into internal smiles.  We could hear the breaking of the spine of defense counsel's case.

In his closing, defense counsel gave the jury his numbers for damages, which were $75,000 and included the $30,000 for medical expenses already incurred.  These numbers enabled me in rebuttal to marvel with the jury at how even now the insurance company in this very courtroom, after all their promises of "being fair", are betraying "us"  with this paltry request for low-ball damages.    By "setting the pick" with our theme we caused the jury to experience the betrayal in real time in the here and now of the courtroom.  (It may have occurred to you that by defense counsel's lights the sum of $75,000 for an arthroscopic shoulder repair 5 years ago and six broken ribs is a pretty decent offer - but given the framing of the case it was a betrayal).

One of the fun things in this trial was the we had a JUDGE on the jury.  Judge Lynch, a county court judge who had ten years' experience as a prosecutor before taking the bench dutifully presented himself for jury duty pursuant to his subpoena and there he sat in the jury box at the beginning of voir dire.  For those of you in Grad II, you may remember that in May of 2011 I served on a jury in a criminal case.  Judge Lynch was the judge in that trial.   I reminded Judge Lynch that I had been on his jury and wondered if he would mind being on mine.  He responded that he did indeed remember that I had been on his jury and stated he would be happy to serve on mine.  Mike and I were not surprised to see the verdict forms in Judge Lynch's hand as the jury came to render its verdict.

The jury returned a verdict of  $530,000 on the underlying claim for UIM benefits for the personal injuries from the crash.  The jury also found Auto Owners had unreasonably delayed payment of benefits, entitling Client to a judgment for a penalty of two times the covered benefits plus costs and reasonable attorney's fees, pursuant to Colorado statute 10-3-1115 & 1116.  The claim arose before the stacking of UIM benefits, so after payment of the $50,000 by Farmers, there remained $450,000 of benefits (principal amount) on the UIM policy.

Judgment before calculation of interest, costs and attorneys' fees will be $1,350,000.  If the judge agrees that "reasonable attorneys' fees" should equal another 40% or so of the initial judgment, with costs we should have a final judgment of near $2.0 million or so.  For those of you who practice personal injury law and you have clients with a non-responsive insurance company, you might consider claims for insurance bad faith.

Jury instructions in these cases can be challenging. We believe that our work with defense counsel and Judge Williams to simplify and make understandable the jury instructions benefitted the parties, the jury and justice.  I'd suggest careful work on jury instructions with opposing counsel well before the start of trial provides substantial benefit to all parties.

If you have questions, please let me know.

Kindly,

Tom