Lawyers use insurer's 'bad faith' negotiations to get 5 times the policy limits
"With negotiations concluded, Allstate ultimately paid $500,000, which was $400,000 more than what the company was contractually required to pay," said plaintiff counsel.
A pair of Atlanta plaintiff attorneys has resolved its client’s injury claim for five times the insured’s policy limits, after leveraging alleged bad-faith negotiations by the defendant’s insurer.
Tobin Injury Firm lawyers Darren Tobin and Caroline Monsewicz credit their ability to reach the $600,000 settlement to their use of “a well-timed Holt demand, as well as an offer of settlement under O.C.G.A. § 9-11-68 to ensure that Allstate Insurance Company would have to eventually do the right thing.”
Not too soon
What began as a low-impact collision in a Hiram shopping plaza parking lot in January 2020 has ended as a six-figure settlement with liability and underinsured motorist carriers, according to plaintiff counsel.
In a Tobin Injury Firm release, the plaintiff team detailed that as client Kathryn Middleton’s vehicle approached a parking lot exit, another motorist collided with the plaintiff “at a low-rate of speed” while driving “through an empty parking space.”
With the impact occurring on private property, plaintiff counsel said police called to the scene did not issue the at-fault driver a citation or warning.
However, Monsewicz noted that law enforcement did generate a police report that plaintiff counsel leveraged in pursuing compensation from the driver’s insurer for injuries to the plaintiff’s lower back and neck that “required pain medication and injections.”
Plaintiff counsel waited 11 months after the collision to submit a Holt demand and a $115,000 offer of settlement to Allstate.
Tobin noted that by not sending the demand “too soon,” plaintiff counsel lessened the insurer’s ability to argue it lacked “all of the necessary facts and medical evidence it needed to pay” the amount demanded.
“Georgia law holds that when an insurer refuses to pay a reasonable offer to resolve a valid claim in a timely manner, it breaches a duty to protect its insured according to the terms of the insurance contract,” Tobin wrote. “In other words, when you send a demand, you need to give the insurance company a reasonable opportunity to say, ‘Yes, this makes sense. We have what we need to pay this victim.’ That’s the key in this case to how we felt secure in a future bad-faith action.”
Read the Demand Letter
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‘Medical-causation defense’
After the demand went unmet, plaintiff counsel filed an auto tort claim in Douglas County State Court in March 2021.
Perry attorneys S.E. Moody III, Andrew Bryce Moody and Allison Edgar Gylfe of S.E. Moody III P.C. appeared as defense counsel for Allstate, but did not respond to a Daily Report request for comment.
The trio answered the plaintiff complaint the following month with a demand for a jury trial.
Atlanta attorney Matthew Ashby of Savell & Williams joined the litigation as defense counsel for USAA, the underinsured motorist carrier. He did not respond to a Daily Report request for comment.
“The defense made a point that Mrs. Middleton, a military wife and grandmother of one, was previously injured in a high-speed rear-end collision in Colorado years before the January 2020 collision,” plaintiff counsel wrote. “As a result of that earlier Colorado crash, it was documented that Mrs. Middleton experienced significant lower back pain, had a lower back surgical fusion, and underwent years of monthly pain management appointments, including through the time of the 2020 crash.”
To overcome opposing counsel’s “credible medical-causation defense,” Tobin and Monsewicz said they focused on their client’s new neck pain rather than her lower back pain.
Monsewicz obtained medical narrative testimony from two of the plaintiff’s pain-management doctors, who’d treated Middleton before and after the January 2020 crash, to corroborate the onset of plaintiff’s neck pain.
Plaintiff counsel said they also made it a point to depose the at-fault driver, despite Monsewicz’s procurement of a formal admission of negligence in the defendant’s answer to the plaintiff’s complaint.
The duo said doing so further tipped the case in its client’s favor by creating an opportunity for counsel to document what the defendant “looks like and sounds like.”
“Here, because of the defendant’s testimony and his conduct, counsel for Mrs. Middleton’s uninsured insurance carrier, USAA, withdrew the carrier’s answer in January 2022 and refused to answer in the name of the defendant,” plaintiff counsel wrote.
‘It was far too late’
Douglas County State Court Judge Brian K. Fortner docketed the auto tort on his trial calendar several times after a string of conflicts and leaves of absences prolonged the litigation.
“After years of the case sitting and waiting for trial, Allstate upped its initial offer and offered to pay the full policy of $100,000,” plaintiff counsel wrote. “By then it was far too late.”
Because plaintiff counsel’s time-limited demand and offer of settlement had expired, Tobin and Monsewicz said they felt confident in their odds of taking their client’s case to trial for “fees and costs above the $100,000 policy.”
But Tobin said a victory on the underlying claim would be “only part of the battle” in a bad-faith action.
“Once a judgment above policy limits is rendered against a defendant, the plaintiff must engage in all new litigation to pursue a bad faith claim,” Tobin wrote.
Rather than proceed with “years of more litigation,” plaintiff counsel said it maximized its trial preparation to settle the plaintiff’s claims with both Allstate and USAA.
After reminding USAA of the defendant’s deposition testimony and conduct, Monsewicz sent the underinsured motorist carrier a final demand for the uninsured policy limits of $100,000, which it paid.
“Shortly thereafter, Allstate engaged the services of Ryan Dixon of Copeland, Stair, Valz & Lovell, LLP to handle the bad faith ramifications of an excess jury verdict against the defendant,” Tobin wrote. “Dixon did an excellent job in protecting Allstate. With negotiations concluded, Allstate ultimately paid $500,000, which was $400,000 more than what the company was contractually required to pay.”
‘Never a slam dunk’
With the 2020 matter now resolved, plaintiff counsel said they felt “proud of this result.”
“While it’s possible we may have won more than the $600,000, it’s never a slam dunk that you’ll win the bad-faith case,” Monsewicz said. “Getting the best result for the client is always what drives the decision. With this settlement, our client decided that the bird in hand was better as she can focus on her future, and not worry about more litigation.”
Albeit pleased with the resolution, Tobin noted it’s not the first time plaintiff counsel encountered such challenges with the insurer.
“This is the third time this year that we’ve forced Allstate to open their coffers and pay more than the policy. It’s a shameful practice that Allstate seems to always protract litigation unnecessarily,” Tobin said. “Sometimes when it comes to paying injured victims, insurance companies love to play ‘delay, deny, defend.’ I suppose they think some lawyers will give up. Not us. So long as Allstate and other insurance companies play games, we’ll be glad to rewrite their rules.”