Spouses denied settlement from insurance company after motorcycle accident awarded $19.3 million verdict

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by Jay Pate

GEICO insurance has been ordered to pay $19.3 million to Steve and Barbara Vissagio of Vernon, New Jersey for injuries sustained in an accident on Route 23 in Sussex Borough in 2010. Steve was riding a motorcycle when he was rear-ended by a pickup truck. GEICO insured the driver of the pickup truck. The insurance company refused to settle the claims against the pickup truck driver for the $250,000 that the Vissagios had been originally willing to accept.

Steve sustained a serious spinal, neck and shoulder injury. The jury awarded him $15.5 million in damages. Barbara was awarded $3.8 million in so-called Per Quod damages, which can be awarded under New Jersey law for one spouse’s suffering and loss as a result of injury to the other spouse.

When an insurer fails to use good faith efforts to attempt to settle a claim against an insured within the policy limits and an excess verdict is entered against the insured, the insurer may be found liable to the insured for the amount of the excess judgment. In New Jersey, such excess liability claims are sometimes referred to as a “Rova Farms” claim, after the decision in Rova Farms Resort, Inc. v. Investors Insurance Co. of America, 65 N.J. 474 (1974).

In a broader context, “every insurance contract contains an implied covenant of good faith and fair dealing.” Wood v. N.J. Mfrs. Ins. Co., 206 N.J. 562, 577–78 (2011). When negotiating third-party claims asserted against its own insureds, the insurance company has “a positive fiduciary duty to take the initiative and attempt to negotiate a settlement within the policy coverage.” Rova Farms, 65 N.J. at 496. “A decision not to settle must be a thoroughly honest, intelligent and objective one.” Id. at 489-90. When an insurer breaches that fiduciary duty, the insurer must “absorb losses which may result from its failure to settle,” including a verdict in excess of its coverage limits. Id. at 502.

Trouble with your insurance company?

If you believe you were treated unfairly by an insurance company, 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 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.