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Posts Tagged ‘Car accident’

Is Georgia Game for Growing Bad Faith Liability?

Posted on: July 17th, 2018

By: Jessica Samford

As discussed in my last blog on bad faith, seeking bifurcation can be a proactive means to distinguish the issue of coverage from the issue of bad faith and appropriately manage the all too often unwieldy discovery process before it’s too late.  A recent case in Georgia is an interesting illustration of an insurer’s attempt to bifurcate issues after the discovery stage in a bad faith failure to settle claim in particular and is yet another cautionary example for insurers to carefully consider the increasing potential for extracontractual liability in Georgia.  Whiteside v. GEICO Indem. Co., 2018 U.S. Dist. LEXIS 87868, *3-*4 (M.D. Ga. May 25, 2018).

In that case, the trial court declined to bifurcate the issues of liability and proximate cause of damages at the trial stage as requested by Geico, which sought to have a jury determine whether or not Geico could be held liable for bad faith failure to settle before being presented with evidence of the default judgment entered against Geico’s insured of almost $3 million and causation of same.  Separation of liability and damages issues was not warranted according to the trial court because facts relating to Geico’s claim handling were relevant to both, and Geico’s concerns could be handled through proper jury instructions, special interrogatories, and the verdict form.  See also Whiteside v. GEICO Indem. Co., 2018 U.S. Dist. LEXIS 52761 (M.D. Ga. Mar. 29, 2018).  The trial court did, however, bifurcate the claim for punitive damages from the rest of the jury trial.

The result was a jury verdict of $2 million against Geico for failing to settle in response to a bicyclist’s demand for the $30,000 policy limit based on medical bills of almost $10,000 following a motor vehicle accident.  Previously, Geico had argued there was no coverage due to the insured’s failure to notify Geico of the subsequent lawsuit she was served.  Whiteside v. GEICO Indem. Co., 2017 U.S. Dist. LEXIS 203617, *6, 2017 WL 6347174 (M.D. Ga. Dec. 12, 2017).  Notwithstanding such a flagrant breach of the policy’s notice conditions, the trial court did not see coverage as being an issue since that coverage defense did not exist at the time Geico responded to the demand by offering to settle for about half the limits instead.

These unusual circumstances are certainly noteworthy, and extracontractual damages such as these are becoming less uncommon in Georgia bad faith cases.  FMG’s Insurance Coverage and Bad Faith BlogLine has already geared up to cover the Georgia Supreme Court’s upcoming rulings after granting cert on the scope of what triggers failure to settle liability in Georgia, not to mention the proposed changes to the Restatement of the Law of Liability Insurance and their impact.  Whatever is in the cards for extracontractual liability in Georgia, the risks presented by settlement demands should be evaluated in light of these current trends.

If you have any questions or would like more information, please contact Jessica Samford at [email protected].

Georgia Supreme Court Grants Certiorari In Failure to Settle Case

Posted on: June 25th, 2018

By: Bill Buechner

The Georgia Supreme Court recently granted an insurer’s petition for certiorari in a bad faith failure to settle case to consider what constitutes an offer to settle a claim within policy limits and whether an insurer’s duty to settle arises only when the claimant presents a valid offer to settle within policy limits.  First Acceptance Ins. Co. of Georgia, Inc. v. Hughes, 2018 Ga. LEXIS 407 (June 4, 2018).

In Hughes, the insured caused an automobile accident that resulted in his death and injured others, including the claimants (a mother and her minor child, who sustained a traumatic brain injury).   The limits on the policy were $25,000 per person and $50,000 per accident.   After the insurer sent a letter to the claimants’ counsel (and other injured parties) requesting a settlement conference, the claimants’ counsel sent a response letter to the insurer on June 2, 2009 stating that they were “interested in having their claims resolved within your insured’s policy limits and in attending a settlement conference[.]”  The 6/2/09 letter from the claimants’ counsel also explained that the claimants had uninsured/underinsured motorist coverage in the amounts of $100,000 per person and $300,000 per accident.  The 6/2/09 letter continued:

Of course, the exact amount of UM benefits available to my clients depends upon the amount paid to them from the available liability coverage.  Once that is determined, a release of your insured from all personal liability except to the extent other insurance coverage is available will be necessary in order to preserve my clients’ rights to recover under the UM coverage and any other insurance policies.  In fact, if you would rather settle within your insured’s policy limits now, you can do that by providing that release document with all the insurance information as requested in the attached, along with your insured’s available bodily injury liability insurance proceeds.

The accompanying letter from the claimants’ counsel, also dated June 2, 2009, requested various insurance information within 30 days and stated that “[a]ny settlement will be conditioned upon [the] receipt of all the requested insurance information.”

Counsel for the insurer did not consider the letter from the claimants’ counsel as an offer to settle within policy limits and thus did not respond to the letter.   On July 10, 2009 (38 days later), the claimants filed a lawsuit.  On July 13, 2009 ( 41 days later), counsel for the claimants sent a letter to the insurer stating that the 6/2/09 offer to settle within policy limits was withdrawn.  The claimants thereafter obtained a jury verdict in July 2012 awarding $5,334,220 in favor of the minor child.

An administrator for the insured’s estate filed a lawsuit against the insurer asserting that the insurer negligently or in bad faith had failed to settle the minor child’s claim within policy limits.   The trial court granted summary judgment in favor of the insurer, but the Court of Appeals reversed and concluded that there were material issues of fact as to whether the 6/2/09 letters from the claimants’ counsel offered to settle the minor child’s claims within policy limits and whether the offer included a 30-day deadline for a response.  Hughes v. First Acceptance Ins. Co. of Ga., Inc., 343 Ga.App. 693, 697, 808 S.E.2d 103 (2017).

The Georgia Supreme Court granted the insurer’s petition for certiorari and stated that it was particularly concerned with (1) whether there were material issues of fact as to whether the 6/2/09 letter from the claimants’ counsel offered to settle the minor child’s claim within the policy limits and established a 30-day deadline to accept the offer; and (2) whether the insurer’s duty to settle arises “when it knows or reasonably should know settlement within the insured’s policy limits is possible with an injured party or only when the injured party presents a valid offer to settle within the insured’s policy limits?”

The Georgia Supreme Court’s rulings on these issues likely will have a significant impact on Georgia insurers and their exposure to negligent or bad faith failure to settle claims.  Oral argument has been scheduled for September.

If you have any questions or would like more information, please contact Bill Buechner at [email protected].

Something Rotten: Spoliation Claims Against a Plaintiff

Posted on: June 15th, 2018

By: Sean Ryan

The Georgia Supreme Court recently clarified that same duty and standard applies to a plaintiff as to a defendant in assessing potential spoliation claims. In Cooper Tire & Rubber Co. v. Koch, 303 Ga. 336 (2018), the Georgia Supreme Court stressed that the duty to preserve relevant evidence is “defined the same for plaintiffs and defendants” and “arises when the alleged spoliator actually or reasonably should have anticipated litigation.” While a plaintiff’s duty to preserve relevant evidence may more often revolve around the actual knowledge of litigation because a plaintiff largely controls when to bring a lawsuit, a plaintiff still “must act reasonably in anticipating whether litigation arising from an injury will occur.” In addressing reasonableness, a court should consider a non-exhaustive list of factors such as the type and extent of the injury, whether fault for the injury is clear, the level of sophistication of the party and familiarity with the likelihood of litigation is similar situations, and whether the party has hired an attorney, expert, or investigator.

In Koch, plaintiff’s husband died following a car accident where a tire tread, manufactured by Cooper Tire, separated from the left rear tire of the husband’s vehicle, allegedly causing the vehicle to strike a guardrail and overturn. The plaintiff allowed the vehicle and three tires without tread separation to be destroyed, saving only the allegedly defective tire. In the ensuing litigation, Cooper Tire moved to dismiss the lawsuit or impose sanctions against the plaintiff for spoliation of evidence.

Using the standard outlined above, the Supreme Court held the trial court did not err in finding the plaintiff did not actually contemplate litigation at the time the car was destroyed and should not reasonably have contemplated litigation. The Court cited the plaintiff’s lack of previous litigation experience, the belief by plaintiff and her husband that he would recover from his injuries, the plaintiff’s lack of investigation into the accident, and the plaintiff’s decision to retain counsel after the vehicle was destroyed. The Supreme Court also credited the fact that plaintiff’s counsel took steps to preserve evidence, albeit fruitless, once hired several weeks later.

What does this mean for defendants in tort cases moving forward? While the Court in Koch did not find the plaintiff’s conduct sanctionable, the case clarifies that a plaintiff must conform to the same standard as a defendant in preserving evidence relevant to their case and that this duty arises independent of the defendant’s duty. The case also sends a clear signal that a plaintiff will be expected to preserve evidence following consultation with an attorney or expert. Such consultation is a fair indicator that plaintiff anticipated or reasonably should have anticipated litigation. Armed with this case law, defendants are in a strong position to demand preservation of relevant evidence, including data from vehicles, cell phone data, and social media data.

If you have any questions or need more information, please contact Sean Ryan at [email protected].

Multi-Million Dollar California Verdict Affirmed Despite Questionable Causation

Posted on: March 6th, 2018

By: Theodore C. Peters

Proof of causation is a frequently debated topic in tort cases where the battle between “possible” and “probable” is bitterly fought.  Tort victims are left empty-handed unless they can sufficiently demonstrate the causal connection between the defendant’s conduct and the harm that befell them.  Speculation or conjecture is insufficient; a plaintiff must prove more.  But how much more, and where is the line drawn when there is no direct evidence supporting a causal connection and where it is equally plausible that the defendant’s act or omission did not cause the harm in question?  The California court of appeal, In Dunlap v. Folsom Lake Ford, recently provided some guidance.

In Dunlap, the plaintiff suffered personal injuries while driving a truck that flipped after its steering allegedly locked up.  The defendant car dealership admitted that a previous owner complained of similar steering problems, and there was evidence that the dealership had diagnosed a problem with worn ball joints, but denied that this was  the cause of the accident.  Rather, the defendant asserted that the accident occurred after the truck and the van it was towing jackknifed when the van suffered a blow out.  Prior to the litigation, the insurers took action to destroy both the truck and the van for salvage, so the parties’ experts were unable to physically inspect the vehicles and instead were limited to photographs which were admitted into evidence.  The photographs were inconclusive and the parties’ experts thus offered competing opinions of their respective interpretation of this evidence.

The defense accident reconstruction expert opined that, as a consequence of the jackknifing vehicles the truck was forcefully pushed, resulting in the equivalent of a PIT (police-intervention technique) maneuver which pushed the truck into a counterclockwise spin causing the accident.  In contrast, the plaintiff’s expert testified that “it was ‘more likely true than not’ that the worn-out ball joints caused the accident, and it was ‘not at all’ a close call.  In his opinion, if the ball joints had been replaced, ‘we would not be here today.’”  The court also noted that “[t]here was evidence that a particular defect (worn ball joints) was present in the truck, and that [the dealer] was aware the ball joints could cause steering lock and needed to be replaced but failed to replace them or verbally advise the owner to do so.”

The jury found in favor of the plaintiff and awarded over $7.4M in damages.  On appeal, the dealership claimed that, because there was no physical evidence that could confirm plaintiff’s expert’s opinion, plaintiff’s evidence as to causation was speculative and plaintiff’s expert should not have been permitted to testify that the ball joints were worn sufficiently to prevent steering.  In finding that the record supported a finding of causation based on non-speculative evidence, the court stated: “Expert testimony on causation can enable a plaintiff’s case to go to the jury only if it establishes a reasonably probable causal connection between the act and the injury… A possible cause only becomes “probable” when, in the absence of other reasonable causal explanations, it becomes more likely than not that the injury was a result of its action.  This is the outer limit of inference upon which an issue may be submitted to the jury.”  The appellate court concluded that substantial evidence supported the jury’s finding of causation, and affirmed the judgment.

The Dunlap opinion is consistent with a growing body of case law that favors letting juries decide issues of questionable causation where the proof satisfies a “more likely than not” standard.  While mere speculation and conjecture are certainly not enough, circumstantial evidence and reasonable inferences that can be drawn from such evidence are sufficient proof of causation to support a jury verdict.

If you have any questions or would like more information, please contact Ted Peters at [email protected].

Need a Lyft? Georgia Court of Appeals Decision Raises Coverage Questions for Ridesharing Services and Their Drivers

Posted on: February 19th, 2018

By: Connor M. Bateman

Most personal automobile insurance policies exclude coverage for damages that result from the ownership or operation of a vehicle used as a “public or livery conveyance.” Although typically undefined in the policy, this phrase has generally been understood to encompass vehicles that are “used indiscriminately in conveying the public, rather than being limited to certain persons and particular occasions or governed by special terms.”

The Georgia Court of Appeals recently weighed in on the scope of this exclusion in Haulers Insurance Co. v. Davenport.  In Davenport, the plaintiff sustained injuries in a car accident, sued the other driver, and served his uninsured motorist carrier (Haulers) with a copy of the complaint. At the time of the collision, the plaintiff was giving a ride to a female friend who would occasionally pay the plaintiff to drive her into town. There was no evidence, however, that the plaintiff ever offered paid rides to the general public. The Court of Appeals rejected Haulers’ argument that the policy’s public or livery exclusion barred coverage, reasoning that the exclusion was inapplicable absent evidence that the plaintiff “used his vehicle indiscriminately to transport members of the general public for hire, or regularly rented out his vehicle for hire.” The court recognized, however, that the exclusion would apply in cases where the driver “presents his services indiscriminately to the general public for hire.”

In light of the rising popularity of Transportation Network Companies (“TNCs”) such as Lyft and Uber, the coverage issues presented by this oft-forgotten exclusion should be carefully reexamined. TNC drivers, who use their personal vehicles to transport passengers, will often have no coverage under their personal policies due to the public or livery conveyance exclusion. This exclusion clearly applies to drivers actively transporting passengers and may even be triggered when the driver is simply using the ridesharing application to “troll” for potential customers. While some of these gaps have been addressed by commercial insurance policies provided by the TNCs, drivers may still be left without coverage in certain situations. For instance, although TNCs typically provide liability coverage for a driver who has the app turned on and is waiting to accept a ride, the TNC policies will not likely cover damages caused by someone or something else during that initial period. To account for this, the TNCs suggest that such damages may be covered by the at-fault driver’s policy or the TNC driver’s personal policy. However, the public or livery conveyance exclusion often extends to uninsured motorist, collision, and comprehensive coverage. And because courts have held that the public or livery conveyance exclusion applies when drivers “present their services” to the general public, the exclusion is arguably triggered even when the TNC driver is merely waiting for the application to connect to a customer.

Although the reach of this exclusion has yet to be fully examined in the context of ride-sharing services, these and other coverage issues will likely continue to arise. For additional information, please contact Connor Bateman at [email protected].