Tom and Teresa Howard, of Middlesboro had a $100,000 UIM policy. Their adult son, Mikel, was killed in a car wreck. He was 26 years old, healthy and working doing some remodeling for $6 an hour at the time of his death.
The underlying policy limits of the driver (also 100,000) were quickly exhausted, there being another death and another injury in the car that had 4 occupants. Mikel was a passenger. The driver of this one car accident also died. The car ran off the road, and flipped upside down in water, drowning three of the occupants. Mikel's estate took $45,000 out of the driver's limits, agreeing to share with the other estate and injured passenger.
So Tom, the father, filed his UIM claim with Kentucky National, who denied the claim, saying that "the payments from the underlying limits ($45,000) represent full value of the claim". An interesting twist was that Tom, the father is also a Kentucky National agent, who sold the policy to himself. He also sold an identical policy (same terms, same $100,000 limit) to his in-laws, the Heaths. Mikel, who had just finished serving 5 years in Eddyville for drugs and stealing, had been "home" in Bell County for only about 6 weeks when he was killed. Mikel had no apartment or house to live in and, as one might expect, resided with his parents, but also sleeping some of the time at his grandparents’ house, a few miles away. The grandparents sent a letter to KY National saying they considered Mikel to be living with them, but Tom said that he considered Mikel to live with him and his wife. All this information was passed onto Ky National through Tom, the dad and agent, who simply supplied the facts from which Ky National could conclude that Mikel lived at one place or the other. It, of course, did not matter whether he lived with his parents or his grandparents, since the payment would be the same, and both households were insured by the same company.
The underlying UIM claim was tried last year and the jury assessed the wrongful death damages at $533,000, and found Mikel lived with his parents, the Howards. So it was way over the 100,000 policy limits. Judgment was entered for the policy limits of $100,000 in July 2010. Still to this day there has been no payment of the UIM claim, since Ky National appealed the verdict. The first verdict came into evidence in the trial of the bad faith phase.
As it turned out, Ky National, in their 45 page claim file, picked the grandparents’ house over the parents’ because they thought, mistakenly, that picking the grandparents’ house would give them an offset, under Tennessee law, reducing the policy limits from $100,000 to $55,000. Aside from this being a wrong conclusion (the grandparents’ policy was a Kentucky policy), Ky National went on to just deny the UIM/Wrongful death claim saying that the underlying limits of $45,000 was full payment. The adjuster, William Plucinski, who signed this letter, testified by video deposition about how he arrived at his conclusion that 45,000 was adequate payment. Among other things, he said that the measure of damages for a wrongful death case was "contribution to the household of the policy holder" and, that if Mikel was not going to support his grandparents, then the wrongful death damages would be essentially zero. In other words, the adjuster had measured wrongful death damages as a PIP claim for Survivor Economic Loss. No one testified live at the bad faith trial for Ky National.
Another interesting twist was that the claim file that was produced in discovery stopped at May 25, 2005, the day that the claim was denied. When pressed for an updated file, Ky. National said there was none, despite there being ongoing litigation, and a trial and verdict on the underlying UIM claim. I decided not to move to compel the rest of the file, because they said in a request for admission that there was no activity in the claim file since May 25, 2005. Because the Defendant had chosen to not maintain a claim file (or at least not be willing to produce it in discovery), the judge forbid them from defending the bad faith phase of the trial on the basis of anything that they had received from the underlying attorneys. They repeatedly suggested to the jury that the "claim activity period" was somehow limited to that first 5 months of 2005. We of course countered that the claim adjustment was on-going, and that we were still, today, waiting for a check. Ky National then told the jury that we did not have to worry about getting paid because Ky National have been good enough to post a full case bond that would pay the claim if it was upheld on appeal. They did not, because of the judge's ruling, offer any opinion about their chances on appeal of the underlying. I pointed out in closing that the full case bond was not a favor they Ky National did for us, but rather a legal mechanism to prevent us from collecting on our judgment for what we were owed, all according to another Bell county jury.
The bad faith verdict was $200,000 for inconvenience and 2,000,000 for punitive. The verdict was unanimous on all counts. We also won on a Consumer Protection Act claim, so we may get attorneys fees for the bad faith phase. We waived the claim for emotional distress when they tried to schedule an IME with Dr. Granacher. There are motions to be filed for attorney’s fees (incurred for the underlying claim litigation) and 12% interest under KRS 304.12-235.
https://mehrfairbanks.com/
The underlying policy limits of the driver (also 100,000) were quickly exhausted, there being another death and another injury in the car that had 4 occupants. Mikel was a passenger. The driver of this one car accident also died. The car ran off the road, and flipped upside down in water, drowning three of the occupants. Mikel's estate took $45,000 out of the driver's limits, agreeing to share with the other estate and injured passenger.
So Tom, the father, filed his UIM claim with Kentucky National, who denied the claim, saying that "the payments from the underlying limits ($45,000) represent full value of the claim". An interesting twist was that Tom, the father is also a Kentucky National agent, who sold the policy to himself. He also sold an identical policy (same terms, same $100,000 limit) to his in-laws, the Heaths. Mikel, who had just finished serving 5 years in Eddyville for drugs and stealing, had been "home" in Bell County for only about 6 weeks when he was killed. Mikel had no apartment or house to live in and, as one might expect, resided with his parents, but also sleeping some of the time at his grandparents’ house, a few miles away. The grandparents sent a letter to KY National saying they considered Mikel to be living with them, but Tom said that he considered Mikel to live with him and his wife. All this information was passed onto Ky National through Tom, the dad and agent, who simply supplied the facts from which Ky National could conclude that Mikel lived at one place or the other. It, of course, did not matter whether he lived with his parents or his grandparents, since the payment would be the same, and both households were insured by the same company.
The underlying UIM claim was tried last year and the jury assessed the wrongful death damages at $533,000, and found Mikel lived with his parents, the Howards. So it was way over the 100,000 policy limits. Judgment was entered for the policy limits of $100,000 in July 2010. Still to this day there has been no payment of the UIM claim, since Ky National appealed the verdict. The first verdict came into evidence in the trial of the bad faith phase.
As it turned out, Ky National, in their 45 page claim file, picked the grandparents’ house over the parents’ because they thought, mistakenly, that picking the grandparents’ house would give them an offset, under Tennessee law, reducing the policy limits from $100,000 to $55,000. Aside from this being a wrong conclusion (the grandparents’ policy was a Kentucky policy), Ky National went on to just deny the UIM/Wrongful death claim saying that the underlying limits of $45,000 was full payment. The adjuster, William Plucinski, who signed this letter, testified by video deposition about how he arrived at his conclusion that 45,000 was adequate payment. Among other things, he said that the measure of damages for a wrongful death case was "contribution to the household of the policy holder" and, that if Mikel was not going to support his grandparents, then the wrongful death damages would be essentially zero. In other words, the adjuster had measured wrongful death damages as a PIP claim for Survivor Economic Loss. No one testified live at the bad faith trial for Ky National.
Another interesting twist was that the claim file that was produced in discovery stopped at May 25, 2005, the day that the claim was denied. When pressed for an updated file, Ky. National said there was none, despite there being ongoing litigation, and a trial and verdict on the underlying UIM claim. I decided not to move to compel the rest of the file, because they said in a request for admission that there was no activity in the claim file since May 25, 2005. Because the Defendant had chosen to not maintain a claim file (or at least not be willing to produce it in discovery), the judge forbid them from defending the bad faith phase of the trial on the basis of anything that they had received from the underlying attorneys. They repeatedly suggested to the jury that the "claim activity period" was somehow limited to that first 5 months of 2005. We of course countered that the claim adjustment was on-going, and that we were still, today, waiting for a check. Ky National then told the jury that we did not have to worry about getting paid because Ky National have been good enough to post a full case bond that would pay the claim if it was upheld on appeal. They did not, because of the judge's ruling, offer any opinion about their chances on appeal of the underlying. I pointed out in closing that the full case bond was not a favor they Ky National did for us, but rather a legal mechanism to prevent us from collecting on our judgment for what we were owed, all according to another Bell county jury.
The bad faith verdict was $200,000 for inconvenience and 2,000,000 for punitive. The verdict was unanimous on all counts. We also won on a Consumer Protection Act claim, so we may get attorneys fees for the bad faith phase. We waived the claim for emotional distress when they tried to schedule an IME with Dr. Granacher. There are motions to be filed for attorney’s fees (incurred for the underlying claim litigation) and 12% interest under KRS 304.12-235.
https://mehrfairbanks.com/
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