10 Years After Car Crash, Insurance Company Hit with $18 Million Bad Faith Settlement

By Dean I. Weitzman, Esq. on December 20th, 2013

The family of a then-15-year-old car crash victim who was critically injured in February 2003 in Lawrence County, Pa., has been awarded $18 million in a settlement that resolves a bad faith case against their insurance company, Erie Insurance Exchange.

The case had dragged on for more than 10 years when the insurance company continually delayed payments that originally would have topped out at the $100,000 bodily injury limits of the family’s policy, according to a Dec. 17 story in The Legal Intelligencer.

The lawsuit was filed by David and Joyce Piper, on behalf of their son, Stephen, who was a passenger in his 17-year-old brother Kyle’s car when it struck a pole on Feb. 22, 2003, the story reported.

“Kyle Piper lost control of the vehicle and struck a pole, ripping the car in half and causing serious brain injuries to Stephen Piper,” the story reported. “According to the plaintiffs’ papers, Stephen Piper was flown to a hospital for emergency medical treatment and would spend several weeks in a coma. As a result of the accident, Piper suffers from permanent physical and cognitive impairments, the plaintiffs’ papers said.”

An earlier related liability case went to trial and awarded the family a separate summary judgment and a $15.6 million verdict in the Lawrence County Court of Common Pleas. The bad faith case followed because Erie continued to delay the payment of the original policy coverage maximum of $100,000 to the family, the story continued. The company cited a lack of case documentation and an insistence that the claim would not be paid until the family signed an agreement releasing the company from payment on another portion of the policy, the paper stated.

Erie’s insurance adjuster for the claim “continued to investigate liability even after the Erie home office suggested settlement, according to plaintiffs’ papers,” The Legal Intelligencer reported. The plaintiffs’ papers also described an employee performance review of the insurance adjuster which said she “questions the legitimacy and/or value of every claim, sometimes too much,” the story reported. “According to the plaintiffs’ papers, Erie still neglected to offer settlement by September 2003, even after it had allegedly received all pertinent medical records in relation to the bodily injury claim.”

In October of 2003 Erie “made a conditional settlement offer in which it offered the $100,000 of bodily injury limits, contingent upon Erie being released from all other claims made by the Pipers,” according to the plaintiff’s papers. At that time, the family had already received more than $700,000 in medical bills for their son’s treatment. Yet Erie continued to add the condition they would only pay the $100,000 if the family would release all other claims against the company.

Unfortunately, this kind of case in not unusual for victims to have to endure.  Left to their own devices, profit-motive-driven insurance companies often don’t do the right thing. They often don’t live up to their contractual and ethical obligations to pay claims when they are due. Instead, they put their own greedy corporate interests ahead of those of innocent victims. And unfortunately, our state Legislature, which is all too often in the pockets of the insurance industry because of donations to their re-election campaigns, has been enacting amendments that don’t benefit citizens. Instead, the insurance law amendments benefit insurance companies, such as the recent changes to Pennsylvania’s long-standing joint and several insurance law that makes it harder for crash victims to collect adequate damages for their severe injuries.

Insurance companies exhibit bad faith when they refuse to pay legitimate claims in a timely manner. In the case of an insurance company, an insurer  contracts with a customer through the filing and underwriting of a policy and promises to handle any claims in certain ways, with specific benefits, payments and processes.  If those promises aren’t adhered to and if the company tries to deceive a customer in order to avoid paying legitimate claims, then they are acting in bad faith.  A lawsuit can then be brought against an insurance company for bad faith in handling a claim.

Bad faith is illegal and can cost insurance companies lots of extra damages, as it did in this case.

One lesson to remember in this case is that no insurance company will truly protect and preserve your legal rights. It’s up to your legal team to be sure that you are compensated fairly when someone else hurts you or your loved ones. Choose that legal team wisely to ensure that your family’s interests are well-protected. These kinds of incidents and injuries happen every day when innocent victims are hurt in vehicle accidents through no fault of their own due to the actions or indifference of others.

That’s where having a legal team on your side that uncovers every fact to bolster your case and maximize your damage award is key.

We here at MyPhillyLawyer stand ready to assist you with your legal case if you or a loved one is ever seriously injured in a vehicle incident or accident anywhere in the United States. We represent the families of victims who die in such tragedies as well, to ensure that their families receive every penny of damages that they are eligible to receive.

Call MyPhillyLawyer at 215-227-2727 or toll-free at 1-(866) 352-4572 anytime and our experienced, compassionate, aggressive team of attorneys and support staff will be there for you and your family every step of the way as we manage your case through the legal system.

When Winning Matters Most, Call MyPhillyLawyer.