Insurance companies have a responsibility to their insureds and those harmed by their insureds to timely pay fair sums for legitimate claims. When they fail to do this, they may be sued for acting in bad faith.
F.S. 624.155 allows direct legal action against insurers who violate this tenant, and a finding in favor of the plaintiff may result in compensation for triple the amount of original damages.
Usually in auto accident cases, we represent injured parties who are either seeking UM/UIM (uninsred/underinsured motorist) benefits against their own insurance companies, or have been granted rights to pursue the insurer directly after securing a judgment against a defendant insured.
A recent high-profile case is highlighting the issue of bad-faith insurance, as large chain store Wal-Mart is suing two of its insurance companies – Liberty Insurance Underwriters and Ohio Casualty Insurance Company.
The case started in 2014 in New Jersey with a trucking accident. Wal-Mart truck driver, who records show was awake 24 consecutive hours at the time, crashed into a limousine carrying Comedian Tracy Morgan, seriously injuring him and two others, and killing another comedian, James McNair, who went by the stage name, “Jimmy Mack.” It is illegal for truck drivers to operate large rigs with so little sleep, and the driver has since been charged with vehicular homicide. That case is pending.
Meanwhile, McNair’s family and Morgan sued Wal-Mart for negligence and vicarious liability. It was alleged the store knew or should have known the driver was violating federal Hours of Service laws, as he had driven 700 miles from his home in Georgia to a warehouse in Delaware before his shift even started. At the time of the crash, he was traveling 20 mph over the posted speed limit of 45 mph, and he failed to slow down as he approached brake lights on the vehicles stopped ahead of him at an intersection. In total, six cars and 21 people were involved.
Ultimately, Wal-Mart agreed to settle the lawsuits filed by Morgan and McNair’s estate for undisclosed sums. But Wal-Mart had insurance, and, the company argues, the insurance companies are required to pay those settlement amounts per the policy agreements.
However, the insurers counter that the sum paid to Morgan was far too high. In lawsuits that were filed by the insurance companies against Wal-Mart in advance of its action, the insurers allege the company agreed to exorbitant settlements because it wanted to avoid punitive damages that might have been awarded at trial. Under the terms of the policies, the insurers would not be on the hook for punitive damages – Wal-Mart would.
The retailer has already paid Morgan and other claimants, so they are not party to this action. However in many cases, plaintiffs do have to go toe-to-toe with insurance companies for bad faith action because most defendants aren’t multi-billion-dollar corporations who can afford to pay a settlement or judgment out-of-pocket and then fight the insurer for reimbursement.
The insurance companies argue that in addition to the amount being unreasonable, the settlement was reached premature because the store had not yet been found liable by a court.
A representative for the retailer says it has paid premiums on umbrella liability policies for decades, and were forced to take action when insurers failed to live up to their promises.
If you have been injured in an accident, it’s important to have an experienced lawyer advocating on your behalf to the insurance companies involved.
Call Associates and Bruce L. Scheiner, Attorneys for the Injured, at 1-800-646-1210.
Wal-Mart insurers accused of ‘bad faith’ Morgan case, Oct. 14, 2015, By Ted Sherman, NJ Advance Media
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