Monday, March 30, 2009

Delay, Deny, And Low Ball Offers--Top 3 Complaints Against Insurance Companies

A recent report issued by The National Association of Insurance Commissioners reveals the obvious: the most common three complaints consumers had against insurance companies were (1) delaying claims; (2) denying claims; and (3) inadequate settlement offers. In other breaking news, the sun rises in the east and sets in the west.

All kidding aside, these numbers must be put into proper perspective. First, they only involve complaints that were REPORTED to a state's Department Of Insurance (DOI). In other words, somebody had the wherewithall to suspect that the insurance company was treating them unfairly and took the time to report the company to their DOI. So the true incidence of poor treatment is probably vastly underreported.

Secondly, in fairness to the insurance companies, the mere fact that a complaint was reported does not mean that consumers were in fact being treated unfairly. As with any reporting system, some complaints would be legitimate and others would lack merit under any objective criteria.

But I can tell you that the specific top three complaints referenced in the report are not suprising to us. The unholy trinity of delay, denial, and low ball offers made in order to simply "cash out" an injury victim is what makes our phones ring.
And with the advent of dogmatic insurance claims handling procedures based upon computer programs and models that give adjusters little to no discretion in the claims handling process, I don't expect these findings to change any time soon.

Monday, March 23, 2009

High School Cage Fighting? Seriously? Perfectly Fine In Ohio Schools...

Recently I read where Texas officials were investigating a high school whose principal made students who were caught fighting "duke it out" in a cage. It's probably safe to say that principals going "UFC" on students and making them fight as a means of punishment or discipline is harebrained and stupid (at least the UFC, which I am a huge fan of, is highly regulated and extremely safety conscious). If a student got seriously hurt or killed, most people might think that the school district should be liable for negligence in allowing students to fight one another.

Well I'm here to tell you that if this happened in Ohio, no problem whatsoever. Line 'em up, bring the popcorn, and let's "get it on" to quote UFC referee "Big John" McCarthy. No need to worry about any "legalities" here in Ohio. That's because Ohio's "soverign immunity" statutes protect school districts from almost every negligent act, with few exceptions. Here's the general rule of Ohio's soverign immunity law: school districts are NOT liable for negligence--period.

There are basically 5 exceptions to this rule. The first is the negligent operation of school buses and other vehicles. The second is if the activity is a "proprietary" (meaning non-governmental) function. If the activity is a "governmental" function, schools are immune from liability. Under the definitions of these terms, almost every act of a school district is considered a "governmental" function that serves some educational or disciplinary purpose. Example: one Ohio case ruled that the act of high school cheerleading was a "governmental function." I'm not kidding. With that analysis in mind, I'm pretty sure that "cage fighting" might fall into the same category as "cheerleading."

The third exception involves "physical defects" on school grounds. Example: the school ignores a deteriorating ceiling and it falls on Junior's head during math class. The fourth involves negligent maintenance of a "nuisance" and the fifth deals with a violation of a statute that "expressly imposes civil liability" upon a school district. Translation: unless the Ohio Legislature has passed a specific law that says to school districts "if you violate this law you can be sued," there is no liability under this exception. Immunity applies.

Although Ohio recently passed an "anti-hazing" law, something as idiotic as administration sanctioned cage fighting would not be considered "hazing" since it is defined as "doing any act or coercing another, including the victim, to do any act of initiation into any student or other organization that causes or creates a substantial risk of causing mental or physical harm to any person."

So there you have it. Cage fighting fits no exceptions to immunity, and therefore immunity applies. Just another example of "immunity" protecting stupidity. Add it to the list of other shocking examples of immunity for negligence, such as if your child is molested in the bathroom, locker room, or bus by a teacher, cook, janitor, or even a volunteer--even if that person was a convicted child molester.

These extreme examples prove how unbalanced, unfair, and downright scary school immunity laws have become. Protecting our schoolchildren? Forget it. The only thing this law does is protect the insurance companies who insure schools, and who, coincidentally, lobbied for passage of these laws.

Thursday, March 19, 2009

AIG Spent Millions Pushing For Lawsuit Reform--Look Who's Getting "Reformed" Now

What goes around truly comes around. Or is it vice versa? You get the point-eventually the bully on the block gets his deserved thrashing.

For over twenty years, AIG has spent millions and millions lobbying for lawsuit or "tort" reform. Definition: laws that place limits or restrictions on what insurance companies have to pay in personal injury lawsuits. CEO Maurice Greenberg funneled millions into "thinktanks," ad campaigns, and lobbying to influence public opinion and pass tort reform legislation. We "trial lawyers" have been painted as the enemy.According to the AIG's of the world, limiting your rights was good for insurance companies, the economy, and American businesses. As Mark Wahlstrom from The Settlement Channel blog points out:

As anyone who has spent any time at all in the insurance industry knows, the "tort reform movement" was the brainchild and largely financed by AIG and other property casualty firms back in the 1980s when an artificial crisis in reinsurance was created to drive up pricing on excess/surplus and reinsurance coverages. When the companies saw how effectively they could pass along the blame for higher insurance costs on the supposedly run away verdicts and litigation costs in America to the trial lawyers, they devised the next stage in their plan. That was to move on a state and federal level to cap damages on all types of claims such as medical malpractice and work to limit punitive damage awards. The gambit has always been that any actuary can devise a profitable pricing on a line of insurance when they know that their upper limit on damages is capped in any fashion. It becomes a no lose profit making line of coverage when they know exactly what the upper limit is on a potential claim.

However, to get the legal and legislative cover to change laws, elect judges, run state wide referendums and pack the courts it takes money and lots of it. Enter AIG and all of the other major casualty companies who had the biggest stake in the game to get limits on damages, allow for preemption of state courts and strip citizens access to the courts. It may be lost to history the amount of money that was paid by AIG, it's political action committees, executives, agents and affiliates to fund state and federal tort reform measures, but you can only imagine the money spent from the mid to late 1980s until now.

Since that time, here is the shameful litany of AIG's recent shenanigans:

Early 2000's: target of a series of fraud investigations that ultimately led to the forced resignation of Maurice Greenberg, the company's CEO and Chairman for nearly 20 years;

2005-2006: An investigation initiated by New York's attorney general eventually resulted in a $1.6 billion fine ($1.15 after taxes) for AIG and criminal charges for some of its executives. The February 9, 2006 settlement resolved allegations that A.I.G. had participated in bid-rigging schemes and paid insurance brokers to steer business its way, used fraudulent insurance transactions to bolster the quality and quantity of its earnings and underreported to state insurance departments the amounts of workers' compensation premiums it had collected, on which it owed taxes. In 2005, it restated its financial results for five years beginning in 2000, a period when improper accounting inflated the company's earnings by more than $3 billion. (Gretchen Morgenson, "A.I.G. Apologizes and Agrees to a $1.64 Billion Settlement," New York Times, 2/10/2006).

2008: Greenberg's successor, Martin Sullivan, was forced to resign on June 15, 2008, after the company's stock began plunging after the company reported financial losses. On September 17, 2008, Sullivan's successor Robert B. Willumstad, Chairman of the Board of Directors of the Company since 2006, was quickly forced to step down and replaced by Edward M. Liddy, as one condition of a federal bailout of the firm


And all these questionable practices were occuring at roughly the same time AIG was investing in risky mortgage derivatives. Bottom line: at the same time AIG spent millions restricting injured persons' rights to sue "for the good of the economy" and relief for American businesses, it was a major force in collapsing and ruining our economy!

Has there been a more shining symbol of hypocrisy from an American business in recent memory? Remember the example of AIG the next time you hear groups like The Chamber Of Commerce lobbying for more lawsuit reform in order to "help our economy."

We now see where all that "lawsuit reform" and "help" for American business has gotten us.

Wednesday, March 18, 2009

$50 Million Chimp Lawsuit Explained

Wire services are reporting that the woman viciously attacked by a friend's chimpanzee recently has filed a $50 million lawsuit against the friend.

A couple of points here. First, the amount anybody sues for is COMPLETELY IRRELEVANT to anything that happens after the lawsuit is filed. Perfect examples (1) this woman, who was seriously injured and may have brain damage, and (2) the goofball $54 million lawsuit over a lost pair of pants. Both have sued for over $50 million; one person is hurt and the other one is...well...missing a pair of pants, and neither will ever see anything in the same stratosphere as the amount they sued for.

In fact, under Ohio law, if a person is seeking more than $25,000 from a lawsuit for whatever reason, the complaint must state exactly that, and asking for "millions" is technically a violation of Civil Rule 8 (which is never enforced, by the way). And asking for "more than $25.000" in the lawsuit complaint doesn't mean that the plaintiff (the person bringing the lawsuit) will ever get it or is entitled to it. That call is up to the jury or judge, neither of which is bound by what the complaint sought in damages.

So why do attorneys or people filing lawsuits on their own (the pants lawsuit guy) continue to ask for ungodly sums of money in lawsuits both legitimate and frivolous? Simple. Publicity. It makes news. Generally speaking, combine a chimpanzee AND $50 million of anything and it's probably newsworthy...unless it involves more bailout money. That's now considered CHUMP change...

Monday, March 16, 2009

Hit And Run Drivers...And How Your Insurance Company Gets Out Of Paying For Their Damage

You're driving down a country road late at night with your family and a van crosses the center line and is heading directly at you. You swerve quickly to avoid a collision and manage to miss the van, but you lose control and hit a tree. The van left the scene. You describe the van to the investigating officer as a gray and blue Ford van, but you were not able to positively identify it or get a license plate. Your car is totalled and so is your knee and shoulder, two surgeries and $35,000 later.

You call your agent, since you have Ohio uninsured motorists' coverage, which you were told would cover you in this situation. Result? Weeks or months later, your own insurance company denies your injury claim. Your uninsured motorists' coverage contains a clause that requires you to prove one of two things: (1) physical contact with the offending vehicle, or (2) "independent corraborative evidence" through independent third-party testimony that an unidentified vehicle caused your injury.

Your family's testimony describing the van is not enough. Why? Because Ohio law presumes that you are essentially filing a fraudulent claim until you prove otherwise. "Preventing fraudulent claims" is the reason for requiring "independent evidence" of the existence of an unidentified vehicle. It doesn't even matter if you're an honest person who never in your entire life had a claim and even passed a lie detector test. Nope, Ohio law throws out the baby with the bathwater, so to speak, and presumes that you (and everybody else in the same situation) as an honest and premium paying insured is trying to hoodwink your insurance company by crashing the family car into a tree. Nice to know that when you send in your premiums, you're presumed to be a fraud and a liar, isn't it?

So what can you do? If you're run off the road by an irresponsible motorist, you need to try to gather evidence pertaining to the offending vehicle as quickly as possible. For example, a competent personal injury attorney can help you by hiring an investigator to attempt to find and interview nearby residents who may have witnessed the offending vehicle in the area. Furthermore, the vehicle may have left physical evidence in the area which can help to trace it the area where your collison occurred. In one Ohio case, testimony by local firefighters that a similar car was seen driving erratically in the same area shortly after forcing the injured person's car off the road was suffieient evidence to allow the injured person to make a claim under her policy.

In these types of cases, time is of the essence, and the longer you wait, the more difficult it is to meet this difficult "independent evidence" hurdle. So the worst thing you can do is wait weeks or months on your friendly insurance company to investigate your crash. After all, if you're "presumed" to be a liar until proven otherwise, you can figure out what the letter from your insurance will most likely say: CLAIM DENIED. I think Bob Dylan said it best when he sang: "You don't need a weatherman to know which way the wind blows."

Friday, March 13, 2009

Your Comments Helped To Create 3,500 Meals

Our "Comments For Cans" Campaign is now over, as the total comments on our blog has exceeded 100. I just found out from folks at the Akron Canton Regional Food Bank that a $1 donation provides 7 meals for those in need. So, thanks to all of you who responded, our $500 has turned into 3,500 meals. Pretty cool. The check is in the mail (really, it IS in the mail, I promise). If you still want to leave a comment anywhere on the site, we welcome all comers.

Thanks again to all of you who took the time to leave a comment. We will now return to our regularly scheduled programming...

Sunday, March 8, 2009

Comments For Cans Update

The power of association is an awesome thing.

Last week we launched our "Comments For Cans" program (see post below) to raise awareness and money for the Akron Canton Regional Food Bank. My wife, a photographer and fellow blogger, was all over this and immediately notified her colleagues on her various photography forums such as "Two Peas In A Bucket" and "The B School." Her fellow "peas" and other photographers responded en masse. Many thanks to all of you, as your passion and compassion shines like the morning sun peeking into the window on a Spring morning (you know, the spot right where our dog will lay and my wife will shoot--I mean photograph--him).

In fact, one photographer, Terra Dawn, took to heart our plea to use this idea and launched her own program called "Comments For Cause" to benefit inner city youth arts programs. Kudos to you, Terra.

The response from some of my attorney colleagues was outstanding as well, thanks to some help from Ben Glass, an outstanding attorney and entrepreneur who understands how to get a message out to the Internet and who has many charitable ideas and programs of his own through his firm. I hope some of his colleagues run with this idea as well.

And many thanks to all who took the time to leave a comment, including some of my fishing brothers and sisters in Canada who visited courtesy of the Ontario Fishing Forum, one of my favorite Internet hangouts. One of the many reasons why Canada rocks!

It just goes to show how connected we are and how The Internet can be a force, if even a small one, for good ideas and doing good. It's encouraging at a time where we could use some good news.

One change to the "Comments" program. Never having done something like this before, I had no idea what to expect. I've come to realize that 500 comments is unrealistic in the short term. Lesson learned: many more people visit a site than leave a comment. So a correction is in order. As soon as we get 100 comments, we'll donate the $500 to the food bank.

After all, it's our contest and we can change any rules we want.

Monday, March 2, 2009

Comments For Cans

Recent newspaper articles in the Canton Repository and Akron Beacon Journal have highlighted that more and more Ohioans are losing their jobs, and are relying on local food banks just to get by. In some of the worst economic times we've ever witnessed, the increasing strain on our food banks is obvious.

We launched our Bullseye Blog last year as a way to educate people about our justice system and how legal developments in and out of Ohio affect your rights. As a way to combine that goal with a small measure of social responsibility in more pressing matters, I am asking for your help, and it won't cost you a thing. Simply leave a comment on this blog post or any other post as you browse through the site. When the number of comments reaches 500, Nicodemo and Wilson will make a $500 donation to the Akron-Canton Regional Food Bank.

We're calling this program "Comments For Cans." So leave a comment, and spread the word around in the Internet community. And I invite other bloggers to outright steal this idea if you think it's worthy of copying. In fact, we'd be honored if you did.

After all, little hinges can open big doors. Let the comments begin..

Sunday, March 1, 2009

"Why Do You Blog?"

I am occasionally asked this question. When I explain that I blog to share an idea or experience that might offer a new or different perspective on an issue, the standard responses are a perfunctory "Oh, that's nice" or "sounds like a lot of work." Sometimes people will nod their heads and not say much of anything (translated: I really don't know what you're talking about and/or really don't care).

I'm fine with all of it. And that's because I know my place in the vast expanse of the Internet world. The Internet is changing the way we do business, stay in contact with friends, get our news, and choose products and services. Blogs are like engines--some are huge and produce alot of power, and some are smaller. I liken my blog to a little 5 hp engine that sits in the corner of the garage and hopefully starts on the first pull and cranks out some work each week.

Recently I was thinking about the lessons I've learned in over 20 years as a trial lawyer who represents people injured in all sorts of preventable calamities. The biggest lesson: that people who are hurt the worst generally complain the least. Many have fought back from ground zero: comas, brain injuries, learning to walk and talk and read again. It's amazing what they learn to celebrate and appreciate, like learning to feed or dress themselves again. Suprisingly, they are hardly ever as angry or bitter as I expect them to be. I'm no psychologist but I can only generally observe that the survival mechanism of simply fighting and clawing to get back what was lost leaves little time or energy for bitterness. And any anger tends to be compartmentalized.

I've seen this phenomenon over and over again. It is counterintuitive to how accident victims are commonly portrayed by those seeking limits on lawsuits. These victims are often painted as opportunists who are exaggerating their losses and looking to cash in on some "litigation lottery." There are lots of reasons for this belief, which I've written about previously here and here, but the root causes are insurance industry propaganda and our profession's own self inflicted wounds.

It's truly a shame, because it's yet another example of perception not squaring with reality when it comes to things like lawsuits. And if this blog helps to give certain groups a voice or set a story straight, it's worth firing up the little engine.