A recent Ohio car accident case (Caraman v. Bailey) really drives home how some insurance companies will stop at nothing to protect their money.

DRIVING DRUNK...FOR THE FOURTH TIME

A Progressive insured driver smashes into and injures another motorist, injuring her. He is intoxicated and leaves the scene. It's his fourth DUI and Progressive is aware of this. The injured driver (known as the "plaintiff") brings a lawsuit against the drunk driver,and includes a claim against him for punitive damages. Under Ohio law, punitive damages can be returned against an intoxicated motorist in addition to damages for the injured person's medical bills, lost wages, and physical injuries (the latter damages are known as "compensatory damages"). Punitive damages are designed to punish a wrongdoer for malicious or reckless behavior (like drunk driving), and are usually not covered in a standard Ohio auto insurance policy.

In other words, if you drive while intoxicated in Ohio and are sued, your insurance company may cover the injured person's "compensatory damages," but you are on the hook personally for any punitive damages a jury returns against you.

THUMBING THEIR NOSE AT EVERYBODY
So how did Progressive handle the claim and the lawsuit? First, it ignored the plaintiff's attorney's offer early on to settle the case for the drunk driver's policy limits--which were a paltry $15,000. Second, Progressive evaluated the claim by using a software program known as "COA" (read on to learn what this really stands for), which did not include or allow for the plaintiff's herniated disc and spinal cord compression as recognized injuries. However, it did apparantly "recommend" that the plaintiff's claim exceeded the value of their drunk driver/insured's policy.

Third, Progressive even ignored the pleas of the drunk driver's personal lawyer. He advised Progressive that their failure to offer the $15,000 limits was exposing the drunk driver--their own insured--to personal exposure in the form of a punitive damages verdict.

THE JURY SPEAKS

The case eventually marches to trial, and the jury returns a verdict of $20,000 in compensatory damages and $50,000 in punitive damages, thus exposing the drunk driver to $55,000 out of his pocket, when the claim could have resolved for the $15,000 limits.

The judge ruled after the verdict that Progressive failed to make a good faith offer to settle the case, tacked on interest to the verdict, and upheld the punitive damages verdict.

LESSON LEARNED

This case never should have seen the inside of a courtroom, and should have been settled well before it ever got to trial. Progressive essentially ignored everybody in this case--The Plaintiff's attorney, its own insured, and even its own "software evaluation system." It even left its own insured hanging out to dry by refusing to resolve the case and exposing him to huge personal liability.

Progressive dragged this out for one reason, in my opinion: to attempt to save a few thousand bucks. And now Progressive may be facing a lawsuit by its own insured for "bad faith insurance practices" for not resolving the claim and exposing him to losing his personal assets due to the punitive damage verdict he got tagged with.

We hear a lot about "frivolous lawsuits." Yet, when insurance companies take unreasonable positions in indefensible cases, you won't read about it in the local paper. I don't know what Progressive's "COA" injury evaluation software stands for, but I think I can guess: "Cover Our A___." In defense of Progressive, however, this conduct is not all that uncommon, unfortunately. There's plenty of COA to go around.

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Much has been written lately about the dangers of texting while driving. My good friend and blogger extrordinaire Robert Mues has an excellent synopsis of the scope of the problem, and what states are trying to do to curb it, over at The Ohio Family Law Blog.

The numbers of crashes due to texting are staggering. In fact, he coined the phrase "intextication" as a means of relaying that, in many ways, texting while driving is just as bad as driving intoxicated. Recently, I have noticed a shocking increase in the number of young drivers who are messing with cell phones way too often while driving. The other night, as I was returning from my son's lacrosse came, a driver was riding too slowly in the left lane of the highway. When I passed her in the right hand lane, she was looking down at the screen of her cellphone with both thumbs on the pad.

I see this all too often. Although I like the phrase "intextication," I describe it as follows:"you might as well be driving with a paper bag over your head."

I also suspect that the problem is underreported in many crashes for the following reason. Assume a driver runs a light at an intersection while texting and injures a fellow motorist. The investigating officer does not ask the offending driver if he was texting at the time of the collision. The insurance company for the texting driver admits liability for the crash, knowing through their own internal investigation that their driver was texting.

If the injury claim is negotiated without a lawsuit being filed, the insurance company will never reveal that its insured/negligent driver was texting at the time of the collision. Instead, they'll simply admit that "our insured was at fault" in an affort to blunt any attempt to discover whether texting was involved in the crash.

If a lawsuit is filed, this tactic will be repeated. Any attempt to discover whether texting was involved will be fought on the grounds that, "gee, this is a witchhunt and a fishing expedition because we admit liability, so there's no need to get into any of this." And if the negligent driver is deposed and admits to texting, or his cellphone records are subpoeaned and texting at the time of the crash is proven, before trial the insurance company will file a motion to exclude evidence of texting on the grounds that because liability is already admitted, evidence of texting would be irrelevant and prejudicial.

Which circles back to the idea of "intextication." In the context of intoxication, in Ohio, an impaired driver can be liable for punitive damages for being "reckless"--knowingly driving impaired when it is more likely that a crash will occur. In this case, evidence of intoxication is admissible even if the insurance company for the impaired driver admits liability.

It remains to be seen if evidence of texting while driving is comparable to driving while intoxicated, in order to support a punitive damages case against the driver and admissibility of evidence of texting at trial. In my humble opinion, there's really not much difference between the two. This is the next legal battleground in the larger legal picture as technology races ahead, with all its permutations, and the law tries to play "catch up." Unfortunately, there will be many more crashes, injuries, and deaths in the meantime. OMG.

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Suprisingly the answer is "no," according to a recent Ohio case.

A NIGHT OF DRINKING TURNS INTO TRAGEDY

A group of four young adults head to a college town for Halloween festivities. Accompanying the group was a night of marijuana and drinking. Early in the morning, one of the group noticed that there car had been towed. They located the car in the tow yard, and after paying the bill the tow company employee returned the keys to the driver, who was noticably intoxicated.

The group headed for home. You can figure out how this story ends. The driver wrecks the car and one of the passengers is killed. The boy's parents sued the towing company, claiming that the employee should not have relinquished the keys to the driver since he was intoxicated. What's more, it was revealed in the lawsuit that the towing company:

had on previous occasions "stalled" individuals who they believed were intoxicated from obtaining their vehicle from impound. On other occasions, they allowed allegedly intoxicated persons to obtain their vehicle but subsequently contacted law enforcement to report the vehicle's make, model, license plate, and direction of travel.

The legal issue in the case was: did the towing company owe a duty to "third persons" like the deceased passenger for harm resulting from the negligent conduct of another (in this case the impaired driver)? In other words, did the towing company give "substantial assistance or encouragement" to the driver by returning his keys?

The Court concluded that the towing company did not facilitate the driver's insobriety or drug abuse. Nor did it sell or provide him with the alcohol or marijuana he voluntarily consumed. Finally, the towing company took no part in the passenger's decision to take the risk of riding in a car with an impaired driver.

Quite simply, the Court was unwilling to impose a legal duty on the towing company when it had nothing to do with the group's intoxication and decision to ride in the car when they knew the driver was impaired. I wonder if the court's decision would have been different if the facts of this case were different. What if the towing company tossed the keys to an known, intoxicated driver who then crashed into another vehicle and injured an innocent family that was heading to church or school?
After all, the towing company had withheld keys from intoxicated owners in the past, which seems to me to be good common sense and sound policy...

THERE'S A LESSON IN THIS TRAGIC STORY...

There are a couple take away lessons here. First, I doubt that the driver had high levels of liability insurance to cover any injuries caused by his drunk driving. Second, if a towing company is not legally liable, despite releasing the car to an intoxicated patron, it may leave innocent motorists injured by the driver with no legal recovery. Under these circumstances, there's only one surefire way that innocent drivers can protect themselves: purchase high levels of Uninsured/Underinsured motorists' coverage--at least $500,000 or even a million. This coverage is cheap and allows you to pursue a claim against your own insurance company in the event you are on the receiving end of a series of bad decisions that cause you harm.

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