A Pennsylvania appeals court judge has upheld a $19.1 million verdict for Patrick Hennessey of Bensalem, Bucks County, PA for injuries he suffered in a 2009 auto accident. Hennessey’s severe injuries eventually led to an above-the-knee amputation of his right leg. Under PA law, Allstate insurance company may be liable for the entire damage amount if it is found to have acted unreasonably in refusing to settle the lawsuit pre-trial for $250,000, the amount demanded by Hennessey.
Jury finds both drivers at fault
Hennessey had been a passenger in Ryan Caruso’s car when Caruso rear-ended another vehicle. After the collision, Caruso’s car wouldn’t start. Hennessey and Caruso attempted to push Caruso’s car to the side of the road. The driver of the car that Caruso had just rear-ended drove along behind them, with its emergency flashers on, to protect them. Despite these precautions, a car driven by Shawn Robinson Jr. of Philadelphia smashed into the car that was following Hennessey and Caruso, causing a domino effect. Robinson’s car smashed the middle car into Caruso’s car, and Hennessy was sandwiched in between.
Hennessey filed a lawsuit against Robertson and Caruso. Robertson had no automobile insurance at the time of the crash and never responded to the lawsuit. Caruso was insured by Allstate. Hennessey reportedly attempted to settle his claim against Caruso for policy limits of $250,000, but Allstate rejected the settlement demand.
A jury found that Hennessey’s injuries were caused by the negligent actions of both Caruso and Robertson. The jury found Caruso 45 percent liable in the crash, with the rest of the responsibility due to Robertson’s actions. According to Pennsylvania law that applied at the time of this lawsuit, Caruso could be held responsible for the entire judgment.
Appeals court affirms the verdict
In an opinion issued on April 10, Philadelphia Court of Common Pleas Judge John Milton Younge rejected arguments made on appeal by Caruso and upheld the verdict.
Judge Younge found that the damages awarded by the jury were not excessive because Hennessy “was a young man who suffered an extremely painful above-the-knee amputation that will almost certainly cause complications in the future.” Additionally, Hennessy suffers from “continuous phantom pain and an inability to ambulate properly, which will continue to plague him for the remainder of his life, estimated at over 40 years.”
The court also rejected Caruso’s argument that Hennessey’s injuries were caused solely by Robison. Judge Younge noted that “a tortfeasor is responsible for the consequences of his tort.” In short, the second accident would not have happened if Caruso had not been negligent and caused the initial accident which disabled his vehicle. “The fact that the plaintiff’s right leg was not injured in the first accident did not relieve Mr. Caruso of responsibility for the harm his negligent conduct created,” wrote the appeals judge. “Therefore, the extent of the plaintiff’s injuries in the first accident was irrelevant.”
Will insurance company be responsible for judgment above policy limits?
Hennessy’s lawyers reportedly demanded on several occasions that Allstate resolve the case by paying Caruso’s $250,000 policy limits. Caruso may have a claim against Allstate for failing to act reasonably to settle the claims against him, and Caruso may be able to assign that claim to Hennessey. Many states—including Pennsylvania—require insurance companies to act reasonably to settle cases when they can in order to protect their policyholders from the financial devastation that can be caused by excess judgments.
In Pennsylvania, the Unfair Insurance Practices Act protects policyholders against insurance companies that fail to make reasonable, prompt, and fair efforts to settle claims. Insurance companies can potentially be liable for the entire amount of an excess verdict. An insurer is obligated to accept a settlement within the limits of the policy issued to the defendant when there is a reasonable possibility that a verdict may exceed the amount of insurance coverage. As explained long ago by the Pennsylvania Supreme Court, “it is not a right of the insurer to hazard the insured’s financial well-being. Good faith requires that the chance of a finding of nonliability be real and substantial and that the decision to litigate be made honestly.” Cowden v. Aetna Cas. & Curety Co., 389 Pa. 459 (Pa. 1957)
Most states have similar rules to protect policyholders. For example, Texas has the Stowers doctrine (so called because it developed from the opinion in in G.A. Stowers Furniture Co. v. American Indem. Co., 15 S.W.2d 544, 547 (Tex. Comm’n App.1929, holding approved) . Under the doctrine, Texas insurance companies owe a duty to protect insureds by accepting reasonable settlement offers within policy limits. “The duty is not activated by a settlement demand unless three prerequisites are met: (1) the claim against the insured is within the scope of coverage, (2) the demand is within the policy limits, and (3) the terms of the demand are such that an ordinarily prudent insurer would accept it, considering the likelihood and degree of the insured’s potential exposure to an excess judgment.” Am. Physicians Ins. Exch. v. Garcia, 876 S.W.2d 842, 849 (Tex. 1994). Wherever you live, chances are that a similar rule place excess liability on an insurance company that unreasonably refuses to settle a case within the limits of their policyholder’s insurance coverage.
Trouble with your insurance company?
If you believe your insurance company is not treating you fairly, you should consult with an attorney experienced in pursuing “bad faith” lawsuits against insurance companies. The insurance company has an army of lawyers looking after its interests. It only makes sense that you have a lawyer looking after your interests.
At Heygood, Orr & Pearson, we vigorously stand up for individuals and companies who find themselves in the unenviable position of having an insurance company refuse to treat them fairly and reasonably. When an insurance company fails to treat a customer appropriately and denies a legitimate claim that should be paid, the lawyers at Heygood, Orr & Pearson are willing to take them on, expose their actions and make them pay for their improper and illegal conduct
Heygood, Orr & Pearson also has the financial resources to handle bad faith insurance cases from start to finish. In fact, there are many instances in which we invested hundreds of thousands of dollars in a case in order to take it to trial. At Heygood, Orr & Pearson, we are committed to achieving justice for our clients, whatever the cost.
Contact the lawyers at Heygood, Orr & Pearson for your free case evaluation and to learn more about your legal right to compensation. You can reach us by calling toll-free at 1-877-446-9001, or by filling out a free consultation form.