Tort "Deform" and the BP Oil Spill

My mind is being boggled daily by the ramifications of the BP Oil Spill.  Men lost their lives on the rig, our environment is being devastated and every day folk have lost their livelihood in the Gulf.  Worst of all, this is nowhere close to ending.

Anger is at an all time high.  Tony Hayward foolishly commented that he wanted his life back.  Yeah, well so do the families of the men that perished.  So do the people that depend upon the Gulf and its abundance to earn a living and support their children.  Rep. Joe Barton of Texas had the audacity to apologize to BP because of the pressure the White House was putting on BP to set up an escrow fund of $20 billion dollars to help compensate the victims. I read today that some experts are estimating the total cost could exceed $100 billion.

All of this has generated new buzz on the issue of Tort Reform.  Tort Reform refers to proposed changes in our civil justice system that would limit the ability of victims to get compensation.  Proponents of tort reform would argue that this will reduce skyrocketing insurance costs and limit frivilous lawsuits.  This is despite the fact that there have been no unbiased studies (meaning studies other than those purchased by the insurance or healthcare industry) that prove or even support the proposition that insurance costs are related to tort compensation.  Tort reform only helps big business.  It completely obliterates justice for the comman man. Capping or limiting potential damages under Tort Reform also removes a company's determination to make safety a primary issue.  Take the BP Oil Spill as an example.  Currently, oil companies are limited to a $75 million dollar cap on damages.  Compare that to the estimated $100 billion in damages that BP has caused.  That is $.0007 on the dollar.  How does that affect, say the shrimper in Louisiana that makes $50,000 a year to support his family?  Joe Shrimper makes a claim to BP for his lost income for just one year of $50,000 and BP says, "Yes, we were wrong, but we only owe you $35.00.  Here's a check and best of luck to you".  That, my friends, is Tort Deform.

There is an attempt to push a bill through now that will remove the $75 million dollar cap on damages by oil companies.  By allowing unlimited liability, perhaps that will make companies like BP take safety a little more seriously if the shareholders know their dividend checks are going to be a little lighter in the years to come.

The argument on Tort Reform is contentious and bitter.  I am the first to agree that there are frivilous lawsuits out there but the answer is not in passing measures that will hurt those decent people who are not making frivilous claims but only trying to survive and be treated fairly.  Our civil justice system has plenty of measures in place to take care of frivilous lawsuits (ie, Motions for Summary Judgment, Rule 11 Sanctions, Trial by Jury, etc).  Let those procedures work their magic and take care of booting out the ridiculous lawsuits and leave the law alone to take care of those people that justly deserve it.

Insurance Bad Faith

As Beth discussed in her prior Blog post, if you are sued and the verdict is in excess of your available insurance limits, you may have a claim for Bad Faith against your insurance company. We are required to purchase liability insurance and assume if we are at-fault our insurance carrier will truly be our “Good Neighbor” and take care of us. However, the insurance company makes the decision about what to do for you. So if you are sued, the insurance company decides what offer to make and whether it will entertain fruitful settlement discussions with the Plaintiff. In essence, your insurance company decides whether you will be sued or not based on how they deal with the plaintiff in settling his or her case.


Bad Faith claims usually arise when the insurance company failed to settle a case with a plaintiff within the available insurance coverage and then later a verdict is rendered against the at-fault party for an amount in excess of the insurance limits. In North Carolina, you are required to carry at least $30,000.00 per person/ $60,000 per accident. The majority of time, in my practice, the plaintiff would like to resolve the claim within the limits of the at-fault party’s insurance coverage. Most plaintiffs are not seeking to displace someone from his or her home or someone's retirement. However, when the insurance company refuses to attempt to settle in good faith, my clients sometimes have no choice and at that point are a little irritated they are not being treated fairly.

An example of bad faith practices by an insurance company is when a plaintiff is seeking to settle his or her claim for let’s say the $30,000.00 worth of available coverage. The insurance company offers $25,000.00 and no more. The insurance company is basically telling the plaintiff, “I won’t pay you more so go file suit (against my insured) and try to get more”.   Filing a lawsuit is, of course, a long, expensive and risky process.  But the plaintiff has no choice but to file suit and let's say gets a verdict of $50,000.00. The insurance company then pays the $30,000.00 according the contractual language of its insured’s policy but leaving its insured to pay the plaintiff the other $20,000.00 from his/her own pocket. Now, if you are like me, I’d be a little ticked if my insurance company could have settled this claim for $30,000.00 and protected my home, car and retirement. Now you owe another $20,000.00 to someone you accidentally hurt. Once you discover the insurance company has not acted in your best interest, you now have a claim for potential bad faith. Some insureds will tell their company, "It’s not my fault", or "How can they be hurt that bad", or "I don’t want them paid". If you tell your company this and then have the above verdict against you, there is no bad faith. In other words, the insurance company acted in the manner you wanted them to and thus they are protected from bad faith. However, if you tell the insurance company to pay the claim to protect your assets like your home, retirement, etc., then you have a better shot at a bad faith claim. I would also recommend if you want the insurance company to resolve the claim to keep your assets protected that you send this in writing via certified mail to document the insurance file.

If you succeed in a bad faith claim against your insurance company, the insurance company could potentially owe you the excess amount. In the example above, it could be enough to cover the excess amount you owed the injured party. Depending on how bad the insurance company acted and what the documentation and claim files show, you could potentially recover more than the excess verdict under various statutes.

I look at bad faith as accepting responsibility. If it’s your fault, accept it and have it handled properly; it could keep you from losing your home or a retirement you have worked hard to obtain. I also recommend you review your insurance coverages. I firmly believe $30,000.00 worth of coverage is not enough to protect you when you are responsible for an accident. Our firm will review your insurance coverage for free and provide you advice on how to best implement an insurance policy that will adequately protect you.  Click here to visit our Online Legal Forms and Advice Store and you can upload your insurance declaration page for a free review by one of our attorneys. 
Posted by:  Jennifer Seate, Partner, Leone Noble & Seate

What Happens If You Are Sued?

So May was not a very good month for my blog.  It suffered because I was so darned busy that I forgot to write!  I also took the liberty of taking a bit of a vacation as well so there you have it. 

But now that I am back and ready to rock and roll (and type), I wanted to try to focus on a topic that doesn't often come up for our own clients, but it does happen to those folks who have hit our clients and maybe to someone you know.  What happens if you get sued by someone that you hit in a car accident?  While our firm does the opposite side of this issue (we represent the person who is filing the lawsuit against the at fault driver), we have had many people call us wanting to know what to do when they get sued.

The simple answer is that your own liability insurance company has a duty to defend you in the lawsuit. If you are ever served with legal papers (called a Complaint and Summons), you should immediately call your insurance carrier and report the lawsuit.  They will, in turn, hire a lawyer to represent you in the lawsuit.  But the real question... why are YOU getting sued instead of your insurance company?  That's the way the law rolls in North Carolina.  We (Plaintiff's lawyers) are forced to sue the individual responsible for the accident, not the insurance company.  While the insurance company has the duty to defend their insured, they are not named in the lawsuit, nor is a jury allowed to even know there is insurance available.

Even if your insurance company provides you with a lawyer at its expense, you are still entitled to your own legal counsel.  It is highly recommended that you hire your own attorney to advise you if there is a chance that you could get hit with a verdict in excess of your insurance limits.  If that is the case, your assets will be in jeopardy of being collected against.  You will, before you get to that point, want your own attorney to independently advise you of the risks outside of the lawyer hired by the insurance company to defend you.

I am going to ask my partner, Jennifer Seate, to write a follow up blog on this issue regarding issues of Bad Faith against your own insurance company.  Keep your eyes open.  It won't be another month before we write again.

Her Last Call On Her New Cell Phone

This is a link to a recent email sent to me showing the horrors of driving and talking on your cell phone at the same time.  We posted it on our law firm's website.

Spring Safety Tips for Drivers

Here is a link to a recent safety tip email blast we sent out to our clients.  Read here for Spring Safety Tips for Drivers. 

Uninsured/ Underinsured Motorist Coverage (UM/UIM)

This is a two part series giving a basic explanation on Uninsured/ Underinsured Motorist Coverage in North Carolina.


What is UM or UIM?

Uninsured or underinsured motorist coverage can pay for injuries to you and your passengers when there is an accident and the other driver is both legally responsible for the accident and considered "uninsured" or "underinsured." In addition, uninsured and underinsured motorist coverage can pay for injuries to you or any resident relative living in your household, even if your automobile was not involved in the accident.

An uninsured driver is someone who did not have any insurance, had insurance that did not meet state-mandated minimum liability requirements, or was not financially able to pay it. A hit-and-run driver also counts as uninsured as it relates to bodily injury as long as there was an impact with the uninsured vehicle (UMBI). However if you are claiming uninsured motorist property damage, the hit and run driver must be identified before you can recover for uninsured motorist property damage.

An underinsured driver is someone who had insurance but the amount of the insurance was not high enough to pay for the personal injuries or damage caused by the accident. In these situations, UIM can pay you the differences in your underinsured coverage and the at fault automobile liability coverage if your case warrants that amount of damages.


Is It Required?

North Carolina General Statute 20-279.21(b)(3) and (b)(4) requires all licensed drivers to carry Uninsured/Underinsured (UM/UIM) motorist coverage on their insurance policies in an amount at least equal to the highest bodily injury liability coverage on said policy. Unfortunately though if you carry only the minimal liability coverage, you will not likely have UNDERinsured coverage.


Why Would You Want It?

Simply put, you want to be protected. If you get into an accident with someone who is driving without insurance or doesn't have enough of it, you will most likely not get just compensation. With UM/UIM in place, you will have a means to collect damages for your injuries and other expenses incurred.

UM/UIM coverage is usually affordable, especially considering the amount of protection it offers. It could pay your medical bills, lost wages, and pain and suffering. If someone hits you or your car and is legally responsible for the damages, you won't get any money from them if they don't have money to give you. Especially during times when people are struggling economically, many drivers either do not have insurance or do not have enough insurance. If you have UM/UIM, you can get money even if the other driver doesn't have enough.


Next article: How Does UM/UIM Work and How Much Should You Carry?

Dogs... I Love 'Em!

I am reproducing this Attitudes in Living article I wrote for our last newsletter.  It got a lot of response from dog lovers so I thought I'd post it on our blog as well.  Not everyone wants to hear about legal stuff all the time!

My husband and I have three Golden Retrievers. Our oldest, Hearsay, is 8 years old and is bad, bad, bad. She loves people so much, that when you come over to our house, she will jump up on you, grab your shirt and pull you down to the ground so she can smother you with dog kisses. I’ve tried for 8 years to break her of that habit, to no avail. She is, however, our athlete in the family and loves to play ball… and more ball… and more ball… and more ball. We have figured the only way to stop her from grabbing shirts is to stuff a ball in her mouth. The cutest thing she does though is that she has to have a stuffed animal (we call it a “Lambie”) stuffed inside her mouth in order to go to sleep. That cuteness makes up for all the badness.


Our next Goldie is Piper. She is 7 years old and if you ever visit us at our office, you are more likely than not to find her up here at work with me. She is the only one of our dogs that is well behaved enough to enter into the professional world. Piper is a momma’s girl and stays pretty close to me, even following me into the stall in the women’s bathroom. Very annoying. But if I am ever sick, she lies beside me in bed and will not leave my side. On those rare occasions, we call her Pipey Nightengale.

The last to round out our trio of fluff is Buckeye. He is 5 years old and is the most gorgeous Golden Retriever you’ve ever seen. However, he is not the brightest of dogs. I call him my little Zoolander because what he doesn’t have in brains, he makes up for in really, really good looks. Buckeye will stare at himself in the mirror and I am sure he is saying to himself, “You are really, really a good looking dog.” Buckeye tries to be smart, but it never quite works out for him. When he is playing outside and doesn’t want to come in when I call him, he will walk over to the bushes and stick his head inside the bushes so he can’t see me. He truly believes if he can’t see me, then I can’t see him and thus he is adequately hidden from me. Never mind the 80 pounds of his butt sticking out in plain view!

I adore my dogs even with their goofy faults. Their love of me, my husband and every other visitor that comes to our house is without bounds. Gildna Radner once said, “I think dogs are the most amazing creatures; they give unconditional love. For me they are the role model for being alive.” Well said.