Fair dealing with insurance companies.

Fair dealing with insurance companies.

One of the more frequent topics I find myself involved with as a civil litigator is not just the actions or inactions that cause an accident, but the actions of an insurance company and the claims representatives who handle injury claims.

It might seem obvious, but the less an insurance company has to pay to claimants, the more profit it has. As someone who pays insurance premiums, I am sympathetic to the argument that the less claims made against my policy (or policies in general) the less my insurance is going to cost. But is that really true? Do insurance companies pass on the savings to insureds? What do insurance companies say to their shareholders about this?

In a letter dated February 25, 2012, to Berkshire Hataway shareholders (of which GEICO group of insurance companies is a major asset) Chairman Warren Buffet advised:

Our insurance companies continue their delivery of costless capital that funds a myriad of other opportunities. This business produces “float” – money that doesn’t belong to us, but that we get to invest for Berkshire’s Benefit. And if we pay out less in losses and expenses than we receive in premiums, we additionally earn underwriting profit, meaning the float costs us less than nothing. Though we are sure to have underwriting losses from time to time, we’ve now had nine consecutive years of underwriting profits, totaling $17 billion. Over the same nine years our float increased from $41 billion to its current record of $70 billion. Insurance has been good to us.

As my Dad used to say when there was not much to be said; “welp, there ya go.”

Now don’t get me wrong, a business should be able to make a profit. But I don’t think the average American let alone just the average person on this planet really has an idea of how much $17 billion is. Lets put it this way. If you just had one year of the 9 year profit boom or, about $2 billion ($2,000,000,000.00); you could spend a million dollars every day for five and a half years.

Here comes the obligatory buy me a boat reference

Well, with all that money, you would hope that when you have a claim they will treat you fairly, right? You might want to read the Sherrill v. Farmers case and then tell me if you still believe that. In case you want the TL:DR version ( that’s shorthand for too long didn’t read for non millenials) Sherrill, a former Farmers Insurance adjuster alleged she was fired because she didn’t follow Farmers policies including:

Contacting claimants within 24-48 hours of an accident and then making in person contact.
Requiring Adjusters to settle a certain percentage of bodily injury claims within 60 days for $1,500 or less.

The New Mexico Court of Appeals said whether these Farmers procedures are against public policy is a question for a jury and as of this post, this case is still pending.

You might be wondering, “what is wrong with contacting a claimant within 24 hours?” Well, what if they are in the hospital? What if they are still in pain? What if they need money badly due to medical bills and don’t know their rights? The strange thing is, the New Mexico legislature thought of those questions too and actually prohibits taking statements or negotiating settlements when a person who has been injured and under the care of a person licensed to practice the healing arts within 15 days of the accident. Check out the statute yourself https://law.justia.com/codes/new-mexico/2006/nmrc/jd_41-1-1-ee21.html

But nonetheless, you might get a call within 24-48 hours from the date of your accident wanting to know what happened because an adjuster’s job may depend on it.

So, if your own insurance company isn’t going to look out for you when you’re hurt, who is? That’s why there are personal injury attorneys. Most personal injury attorney’s work on a contingency fee basis. What a nice dynamic. Unlike insurance, which the less they pay you the more they get; generally the more you are compensated, the more I am compensated. I truly hope you never need an attorney. I will find another line of work when no one needs attorneys. But until the financial incentive for insurance companies sticking it to claimants, including their own insureds, is removed, I’ll be holding their feet to the fire.

Don't fear the deposition

One of the best truth seeking tools in a civil case is called the deposition. If you are about to be deposed or maybe you are conducting a deposition for the first time, I think Arnold Schwarzenegger summed it up best in the following clip.

That’s right. An attorney gets to ask questions of a deponent (the person giving the testimony) and they have to be answered (generally).

No consulting with your attorney before answering, no running to the bathroom, no responding “well whats that got to do with anything?”. Your attorney can object to the form of the question or foundation, but generally can’t instruct you as to why they have objected. This is what is known as a ‘speaking objection’. While many attorneys do use speaking objections, it is not permitted by the rules.

The main time your attorney can object and instruct you not to answer is to protect privileged or confidential information. For example, asking what a deponent and their attorney talked about would reveal protected information and the attorney should object and instruct not to answer. Generally most attorneys avoid that line of questioning.

But what about when the deponent is asked for their social security number or any criminal convictions they have had in the past? Well, as usual the answer whether those questions should be answered is: is it worth it to object and instruct not to answer. Courts have protected confidential or private information even though it is not privileged information. For example in Martin v. Ametek, Inc., a court denied a motion to compel in house counsel to answer questions about an her alleged romantic relationship with the corporations human services director. This isn’t privileged information protected by law but a court said the deponent didn’t have to answer.

But an objection and instruction not to answer has to be decided by a judge which can add time and cost to the case and may irk the judge that the question wasn’t objected to and subsequently answered.

So if you have something you are worried about in your past or that may come up at a deposition, talk to your attorney. Give them a heads up. That way if it seems like the deposition might be headed that way, at least they can be prepared to object and instruct not to answer and have considered the consequences prior to the day of the deposition.

I'm Hurt, But First, Let Me Take A Selfie.

Data, Data, Everywhere.

There was a time when you didn’t have a cell phone. Digital cameras were bulky, expensive and by the time you booted up the camera, the moment was lost. But now, you can take a video, write a comment, tag your friends and tell the whole world about the fainting goats with a few taps on a screen.

But this isn’t a post about how you should take photos of the accident scene, you should know that by now. This post is about your social media account and its introduction into evidence during your trial.

The jury gets to see my 3:00 a.m. post about Taco Bell?

Maybe. Caselaw is changing all the time, and different jurisdictions have different rules, but generally, if it is relevant to the case a, it comes in and it definitely comes in if you allowed the general public to view it. In a Recent Case, the united states district court in Tennessee put it this way:

“[M]aterial posted on a ‘private Facebook page, that is accessible to a selected group of recipients but not available for viewing by the general public, is generally not privileged, nor is it protected by common law or civil law notions of privacy.”

But the court added a caveat. “Nevertheless, the Defendant does not have a generalized right to rummage at will through information that Plaintiff has limited from public view.”

I’m not saying that you would intentionally conceal information, but how many posts have you made in the past year? Past 5 years? Will you be able to tell your attorney about every time you mentioned something that might possibly affect your case?

When your in the middle of a lawsuit its hard to remember where you put your keys let alone that you posted an el Jefe filter photo of you smiling 3 weeks after a car accident. “Ladies and gentlemen, if he/she was in that much pain, how come they are making a duck face in this Instagram picture”

Just say no.

If your hurt, or in a lawsuit, posting on social media during your case may do more harm than good. Your words may be taken out of context and could destroy your case. Take a look at some examples.

It's Up To You (Or Your Lawyer)

I think therefore I am. Life is what you make of it. The one thing you can always change is: your mind.

These sayings reflect the famous French philosopher and mathematician René Descartes most well known statement “Cogito ergo sum” translated into english “I think therefore I am”. As Elon Musk recently put it, although not the first to suggest it, we could all be inside a giant computer simulation. Something akin to the Matrix or Plato’s Cave. See Mr. Musk’s interview below:

What does this have to do with the law or personal injury?

On a fundamental level, the idea that we are in a computer simulation, cave or even the Matrix is an idea that conflicts with what we generally accept as our existence. The ability to consider these possibilities, despite evidence to the contrary, is a hallmark of what makes a good lawyer.

A good lawyer recognizes the power having and choosing options. Sometimes those options are in the form of what is reality or sometimes those options are presented in terms of litigation. Do you file suit right away or do you try to negotiate? The ability to think up another solution and present it in terms that everyone can agree on can be critical to resolving a case. But, these ‘third way’ options generally aren’t presented to you, you have to put in the work and time. In other words, it’s up to you (or your lawyer).

Words Matter

If you didn’t already know that words matter, let this funny video be a reminder of how words can make or break a case (or a lawyer).

Words cause wars. Words stop wars. Words are what separate humans from the animal kingdom. Written or spoken, helpful or harmful, symbols with attached meaning are what allow the world to work and for civilization to exist.

Despite the importance of words, it can be a bit frustrating when someone corrects your grammar and even more annoying when someone corrects a spoken sentence. In a world filled with emoji’s and phrases like “r u 🙂 ?” passing for communication, it is easy to allow diction to be dictated by efficiency and question why there is such a big emphasis on words.

But as any good lawyer will tell you, words can be the difference between guilty and innocent or a $1 verdict and a $1,000,000 verdict. Sometimes it is the choice of word that makes a difference. For example, I tried a domestic violence case where the Defendant’s nickname was ‘thumper’. That word probably stuck in the jury’s mind as it was repeated throughout the trial. That trial that ended with a conviction.

Sometimes too many words can change a case. If you talk to the insurance company or to law enforcement and say too much, those words might come back to bite you. Trying a case with a confession is usually a lot easier than trying a case without one.

Sometimes too few words can change a case. I began closing arguments in some cases with a moment of silence to remind the jury in domestic violence cases that silence is the sound a victim makes if they don’t come forward to report their abuser.

But when it comes to the law, how can a lawyer or a client use this information to their advantage? The answer to that is a question humans have been asking for some time, although in a different form, the form of a parable. It goes something like this:

Once upon a time an ancient wise man was said to live in top of a mountain. Anyone who made it to the top could ask him two questions, which the wise man would answer with complete universal truth. One day, a traveler went up the mountain and made it to the top. He asked the wise man, “What is the secret to a happy life?” The wise man said, “Good judgment.” The traveler persisted, “How do I get good judgment?” The wise man said, “Bad judgment”.

There may not be a way to ensure the words you or your lawyer use are the right type or quantity. But if you or your lawyer at least recognize the possible options, then you are further along than the person who doesn’t even consider their diction in the first place.

This is how it's done.

There will always be a type of law, a specific case, or a specific fact that seems to get very little attention, simply because that is how it has always been done. I’ve seen it throughout my time as an attorney. I haven’t been practicing 30 years; only a little over three. But, in those three years, it has been astonishing how many times I have been told “this is the way its done.” It is difficult to stand up and question why because lawyers are trained in the method of ‘stare decisis’, a latin term that means, stand by things decided. Standing up to question things decided, rather than by them, is a risky move in life and in law. It paints a target on your back and forces you to paddle upstream, but it can pay off in the long run.

When I defended a foreclosure case in law school during the housing crisis, and the bank didn’t have the promissory note attached to the lending documents, I was told “this is how it’s done. When I questioned the practice of dismissing domestic violence cases simply because the victim did not want to testify, defense attorneys complained, “this is how it’s done.” When someone told me that a default judgment motion is almost never granted, but I filed it anyway and it was granted, by then I knew this is how it’s done is trumped by this is how we do it. No, not the song from 1995 by Montell Jordan. Although that is a good song.

Only after researching the law and finding the black and white text can any lawyer truly be sure that this is indeed how it is done. One such topic of law is default judgments. In New Mexico, there are a number of cases which describe the process of a default judgment. And there are also rules about how and when to file it. But what many attorney’s probably don’t know, is that a default judgment and an entry of default are two different things. An entry of default is: “When a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend as provided by these rules and that fact is made to appear by affidavit or otherwise, the clerk shall enter the party’s default.” Rule 1-055 NMRA. The judge doesn’t even decide it. But it’s not over.

After the entry of default, if there are unliquidated damages (paid and suffering) then a hearing must be set to determine those damages. And then a default judgment can be entered. See DeFillippo v. Neil, 51 P.3d 1183 for a case that explains the process in more detail. What an amazing advantage. The plaintiff no longer needs to prove liability. No questions about what the plaintiff was doing. Only questions about how bad they were hurt. Now a default could always be set aside, and usually will be as the above case details, but there is always a chance it won’t.

You Can Sue a Ham Sandwich

“You can sue a ham sandwich”

I have jokingly said this to friends and family when they ask about a potential lawsuit. For the most part; it is true. If that ham sandwich had some ham bone in it with no warning and you choked on it, then there might be a case. Maybe the ham was spoiled and you got food poisoning, that might be a case. But when someone says you can sue a ham sandwich, they most likely aren’t concerned about the quality of your pork product. Rather they are illustrating a widely held belief that lawsuits are frivolous. My earlier post about the Liebeck case touched on this briefly.

Despite the perceived overly litigious nature of Americans, believe it or not, lawyers are compelled by the rules of professional conduct not to pursue claims that are frivolous. So why then is there a persistent belief that lawyers do file frivolous claims? That is too large a question to answer in a blog post, but at least part of the explanation lies in the harsh consequences of not suing. A few of those are outlined below.

Generally speaking, almost all causes of action (right to sue) have a statute of limitations. After a certain period of time, if you have not filed the case, you lose your ability to pursue that claim. It varies in each jurisdiction and it even varies based on who you are suing. One sure way to get a lawyers blood pressure rising is to mention the words tort claim notice and governmental entity. Thats because often governmental entities will require notice of a potential lawsuit within a matter of weeks from when the accident occurred. So, if an attorney gets a case a client sat on for a couple of years and finds out the statute of limitations is about to run, in order to protect himself and his client he may have to file the case without the full picture. It could so happen that claim turns out to not have any merit as the discovery process progresses. Of course the lawyer should withdraw from that case if it truly is merit less.

Sometimes it is hard to know who is at fault and everyone needs to be sued. The classic example is the case of Summers v. Tice. In Tice, Summers, a hunting guide, took two men hunting. A quail flew above the guide’s head and the two men shot at the quail; hitting the guide in the eye and face. In this situation how is Summers supposed to know who did it? After all, as the plaintiff, he has to prove who did it. Sue them both. The California Supreme Court came up with the doctrine of alternative liability and shifted the burden on the defendants to prove who caused the damage. Sometimes you have to sue everybody, and sort it out later. If Summers had only sued one of the hunters and later found out it wasn’t that hunter, that case would be dismissed.

These harsh consequences of not suing, everyone potentially liable, sooner rather than later, contribute to the overly litigious perception that you can sue a ham sandwich.

While being able to indict the other white meat may be viewed as a negative, quite frankly, some ham sandwiches need to be sued. Starbucks recently decided to sue its meat provider when their ham sandwiches were making people sick. Sometimes suing is about making it painful enough for someone or some corporation to change their dangerous practices through litigation. Preventing harm is one of the most laudable goals a litigator can hope to achieve.

So maybe its a good thing that even ham sandwiches are not immune from justice. Because if an inanimate object can be on the receiving end of a subpoena, then truly nothing is above the law.

A Little Hassle Might Be Worth it

This scene from Tommy Boy came to mind recently while I was shopping for car insurance. Periodically, I shop around just to make sure I am not paying too much. 15 minutes or less right? Well, not really. After submitting your information to multiple different companies and looking at your 6 month quotes, you then become inundated with phone calls, emails and even snail mail all trying to get you to switch to a ‘better’ insurance. For me it all comes down to price. I understand what I am paying for and what the insurance company is obligated to do. It’s a contract. I pay x, you will pay y if I am involved in an accident. It should be that simple. But with over 500 billion dollars at stake worldwide, the auto insurance industry is anything but simple.

So one of the selling points of one of the companies I spoke with was that I would be satisfied with my claim. In fact, it was guaranteed. Never mind that they quoted me more than double the 6 month premium of a national auto insurance company. Doesn’t matter that the quote was hundreds more than my current insurance State Farm, which I am more than happy with. (just want to make sure I’m not paying too much) Didn’t I care about my potential claim experience? Didn’t I want a guarantee that I would be happy with it? No. Let me explain.

At that point I was fed up. They called me, asked me all the info they already had (I submitted it online), wanted to know how much I was currently paying, and then kept trying to sell me their services without giving me a quote. They drive a hard selling technique. So, I responded in kind. I told him I knew he didn’t want to waste his or my time. I didn’t care about the fluff or frills of the policy. If they didn’t hold up their end of the bargain, well, I was an attorney and I would sue them. So, just tell me how much it costs. Too much. Now I knew why he was selling the ease of making a claim with them rather than the price point.

But that got me thinking, are people willing to pay more just so they don’t have as much of a hassle when making a claim with their car insurance? Clearly, some people might. Is that a good thing? Not according to research done by insurance companies. What do you mean Mr. FitzPatrick? Well, according to the results of a 1999 study from the Insurance Research Council, on average those represented by an attorney received 3.5 times more in auto accident settlements. Im not the only lawyer who knows this. When do people get an attorney involved? Usually when its a hassle to get a payout. Based on the study, if my claim experience isn’t satisfactory, and I hire a lawyer, it’s more likely that I will get a larger settlement? So, really, shouldn’t I pay less to have a hassle free claims experience? I wish I had thought of that when I was on the phone.

So, I say get the insurance that makes it really difficult for you to have a positive claim experience. Maybe it is a little self interested, because then you will give a lawyer like me a call. But maybe its in your best interest because then you might get an attorney, and, on average, you are then more likely to get a larger settlement.

Let It Go?

While this song took youngsters and their parents by storm over the past few years, its message is nothing new. Turn the other cheek. Let bygones be bygones. Keep the past in the past. The words are different but the sentiment is the same. It is a sentiment that many of us have. Humans have a tendency to let things go and forget about them. (Although there are some who seem to never let things go.) And even if you don’t forget about it, most people have a tendency to not want to start a lawsuit. For good reasons: it takes time, costs money, afraid of their own past coming out to haunt them, potential for losing, and just the overall hassle of a confrontation. But let me give you a personal example where I decided not to sue and have lived to regret it.

When I was in high school, my club soccer team was pretty good. We regularly played up in age and one time in particular we played a group of college age players in an indoor soccer game. I was about 16 and had been fortunate to have a nice growth spurt. I was fast, and had good ball skills. This particular game I dribbled by the other teams defense and instead of shooting, decided to dribble by the goal keeper. I did, but as I went by, he reached out and grabbed my leg, bringing me to the ground. A penalty was called and we scored the point. But I was still upset and accused the goalie of not being able to play fair. One of the other players on the goalie’s team got in my face and reminded me I was in high school. Thinking I was clever, I reminded him he was losing to a high schooler.

The next play I went to the ground trying to reach the ball with my foot (it was a little too far), my right arm outstretched to support me. As I was getting up, that same player who was in my face, came up behind me and swung his leg, kicking me right behind my elbow. Leg vs Elbow, leg wins. My elbow bent the other way. Kind of like this. My scream echoed of the walls of the indoor soccer dome. I went to the ER and was put under so they could put it back in place. But anyone who has had a joint injury can tell you; it’s never the same.

People had asked me if I wanted to sue, and I didn’t have much interest. I was depressed, my first serious sports injury, unable to play again for months. Besides what good would suing do? It wouldn’t fix my elbow. Worst part was some people even said I probably deserved it because of the trash talk exchange before it happened. Maybe those people would end up on my jury if my attorney didn’t do a proper voir dire.

Here I am 14 years later. Not only does my elbow creak and crack, but my wrist and shoulder have developed pain due to years of compensating. One arm is slightly bigger than the other due to the tendons not re-attaching right. I could go get it evaluated and potentially have some improvement, but that is time and money. And guess what? The statute of limitations is long passed. Who is going to pay for all that?

My story probably reminds you of some stories that you have. Or maybe it is your friend or a family member that has been hurt and hasn’t done anything. Talk to a lawyer. If it is your friend, encourage them to talk to a lawyer. Sometimes it just takes that little push to get someone going. It doesn’t mean that there needs to be a lawsuit, in fact in many cases it might not be worth filing the lawsuit. But wouldn’t you rather know now? Not 20 years from now.

So, before you let it go, talk to someone who can tell you your rights and options. Your injury might not heal right. Things could get complicated. If you wait, the statute of limitations might prohibit you from filing a lawsuit and ever being compensated.

Do Lawyers Literally Fight for You?

A common phrase by lawyers promoting their services is that they will “fight for you.” It could be a figure of speech, but in a case from 1992 out of Texas, the lawyers almost came to blows during a deposition. Click the short video to watch it happen.

Maybe that is just how Texans try cases? But there also is some truth in the phrase to ‘fight for your client’. It is an adversarial system after all. And it is not just plaintiff/prosecution vs the defense. Sometimes, you might have to fight the judge too and it might get caught on camera like it did with this public defender in Florida.

Ok, so there are a few exceptions where lawyers and judges get out of control and resort to fisticuffs, but that doesn’t mean all lawyers are brimming with testosterone itching for a fight, right? Right, in fact, studies have shown that lawyers who have higher levels of testosterone (men and women) are, you guessed it, trial lawyers! On a measurable, physiological level, trial lawyers are different.

Now, a correlation doesn’t prove causation. Maybe these individuals already had high testosterone levels and thats why they became trial lawyers. Or, maybe, there is some unknown factor that selects for trial lawyers with high testosterone. The classic example of correlation does not equal causation is the correlation between sexual assault rates and ice cream sales. They both rise at the same time…in the summer. At this point, we can’t say eating ice cream causes sexual assaults just as we can’t say being a trial lawyer causes increased testosterone.

What I can say is that when you are face to face with someone and they are alleging you have done something wrong, or that you didn’t follow the rules, your heart gets pumping. If you don’t have years of practice managing your emotions, you might be inclined to become incensed and lose your composure. But if you can develop your skill for composure and thinking on your feet, you can take the wind out of an opponents sails. Let me offer an example.

A little background, when I was a prosecutor, there was a defense attorney known for coming right up to the line of harassing a witness during their interview statements. (Think of the video at the top) This statement was no different. After about an hour, the witness had enough and left despite defense claiming they did not finish their questions. The defense made a motion to exclude the witness because they couldn’t complete the statement and during the hearing, alleged my witness smelled of marijuana during the witness statement. I can honestly say I did not smell marijuana and relayed that to the court. Defense response was that I either was not familiar with the smell or that I was being disingenuous (lying) to the court. Instead of becoming upset that I was basically called a liar in open court, I reiterated that I didn’t smell anything, but, perhaps, was not as familiar with the smell of marijuana as the defense attorney was. The judge laughed and denied defense’s motion.

Now an attorney needs to know their audience, and this response might not work with the Supreme Court, but then again, you probably wouldn’t be called a liar by a fellow attorney in the Supreme Court unless there was some pretty good evidence for it. In retrospect, that older attorney was probably trying to get a rise out of me, but it backfired. The only way I was able to keep my calm despite the surging testosterone, was because I had felt that surge before in numerous other hearings and learned how to handle it. In this particular situation the best option was not to fight, but deflect.

So do you want a lawyer who fights or who deflects? Both. You want an attorney who can decide when it is time to push and when it is time to step back and let the opposing side whiff. So be careful of those who want to ‘sue the pants off’ someone else. Overzealous litigation can not only be the wrong approach, but also end up running up the legal bills. Then it might be the client who ends up feeling like the one with their pants down.