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Showing posts with label attorney's fees. Show all posts
Showing posts with label attorney's fees. Show all posts
Tuesday, July 28, 2015
Superior Court limits amount recoverable under worker's compensation lien
In Curry v. Great Am. Ins. Co., 2010 WL 1795375, the Superior Court held that the recovery under a lien of a worker's compensation carrier in a wrongful death case was limited to the portion of damages allocated to loss of net expected income of the next of kin of the deceased. The worker's compensation carrier was not entitled to the portions of the damages allocated to conscious pain and suffering or loss of consortium. Its recovery was so limited because damages for loss of net expected income represented benefits "that are duplicated by the worker's compensation benefits."
The court also held that the insurer and the plaintiffs must each pay their proportionate share of the legal fees and costs in the wrongful death action.
Tuesday, July 21, 2015
Why PIP claims are rarely litigated
In my last post I discussed the Salem District Court case of Genest v. Commerce Ins. Co., in which an insurer was held not to have violated Mass. Gen. Laws ch. 93A when it based its denial of a PIP claim on an IME report.
In that case it is worth noting that although 93A damages were denied, the insured was probably awarded attorney's fees pursuant the PIP statute itself. The statute grants attorney's fees if judgment against the insurer enters on a PIP claim.
That is crucial. The maximum actual damages under a PIP claim are $8,000. Very few lawyers are willing to litigate a claim of that size. On a contingency fee claim they simply cannot make back their investment of time, and on an hourly basis the client would end up losing money. The only way such a claim is worthwhile is if an award of attorney's fees is available.
However, under the PIP statute, an insurer can pay a PIP claim at any time up until judgment enters, even after trial has begun, and not have to pay attorney's fees. As Genest illustrates, an insurer can incorrectly refuse to pay a PIP claim without being liable for attorney's fees under 93A.
That is why PIP claims are rarely litigated.
Wednesday, April 1, 2015
Superior Court correctly awards 93A damages based only on lost interest
Update: See this post for a clarification.
In my last two posts I have discussed the recent Superior Court decision in Sterlin v. Commerce Insurance Company. As I noted, Commerce was slapped with 93A damages for ignoring overwhelming evidence that a car accident was the fault of its insured driver.
The plaintiffs' damages in that case were enough to make even a cold-hearted over-analytical lawyer like myself feel a twinge of sympathy. The car that was hit had three occupants. The woman who spent two weeks in a body cast was not the worst-injured. Rather that was Pierre, who suffered a degloving injury to his dominant right hand, and various fractures of his hand, fingers, and wrist. He was hospitalized for 16 days and had a total of four operations. His thumb was amputated. Eventually his pinky was amputated and reattached in his former thumb's position.
In addition, because he could not work he lost his job and his medical insurance. His wife also lost her job. After maxxing out help from charities, friends, family, and credit cards, he received a loan against the expected proceeds of the lawsuit.
With a $500,000 policy limit to be divided among Pierre and two other occupants of the car, he received $275,000 in settlement of the underlying claim.
The court held that the 93A damages would start to run from a month after the insurer received complete medical records, and would be cut off at the time that it finally made a reasonable offer of settlement, a period of about five months.
The court noted that unjust delay in reaching a settlement subjects a claimant to costs and frustrations that are encountered when litigation must be instituted. It continued, "Moreover, when an insurer wrongfully withholds funds from a claimant, it is depriving that claimant of the use of those funds." The court held that the loss of use of money constitutes actual damages, consisting of the interest that would have been earned on that money at a rate of five percent. Therefore, the judge held, the actual damages were $5,733.75. He trebled that amount pursuant to the punitive damages provision of 93A, to $17,201.25.
The judge correctly calculated the 93A damages. This case is a good reminder that no matter how egregious an insurer's actions are, damages are based on lost interest, not the amount of the settlement or verdict.
The judge also awarded costs and attorney's fees, to be determined at a later hearing.
Thursday, March 19, 2015
SJC holds prevailing insurer not entitled to attorney's fees when it establishes another insurer's duty to defend
From my best source, Mike Tracy at Rudolph Friedmann LLP comes a decision issued today by the Supreme Judicial Court of Massachusetts:
As I have discussed in a previous post, an insured is entitled to recover attorney's fees and expenses incurred in successfully establishing in a declaratory judgment action that an insurer has a duty to defend.
In John T. Callahan & Sons, Inc. v. Worcester Ins. Co., the SJC held today that that rule does not apply when the insured's attorney's fees in the declaratory judgment action are paid by a second insurer.
Callahan was a general contractor on a construction site and was insured by Zurich. NEAC was its subcontractor, and was insured by Worcester. Callahan was an additional insured on the Worcester policy.
Lagoa, an employee of another subcontractor, was injured at the job site. He sued Callahan. Zurich agreed to defend and indemnify Callahan. Worcester refused to defend Callahan.
Callahan and Zurich brought a declaratory judgment action against Worcester, seeking a declaration that Worcester had a duty to defend and indemnify Callahan. Zurich paid the attorneys in the declaratory judgment action on behalf of itself and Callahan. Zurich and Callahan won the declaratory judgment action. Zurich sought reimbursement of the attorney's fees it incurred in the declaratory judgment action.
The SJC denied the claim for attorney's fees. It stated that the policy reason for awarding attorney's fees to insureds who are successful in establishing a duty to defend is not to punish wrongdoers or reward those who act responsibly. Rather, it is to protect the insured's right to receive the full benefit of its liability insurance contract. The court stated that Callahan received that benefit at no cost to itself because Zurich defended it.
Rather disingenuously, the court stated that Zurich also received a benefit from bringing the declaratory judgment action, because it received a judgment that Worcester reimburse it for one half of the settlement amount and attorney's fees in the underlying action. The court does not address whether that amount was more or less than the attorney's fees incurred in the declaratory judgment action.
Tuesday, February 17, 2015
Mass. Appeals Court holds that insurer must pay market rate to Cumis counsel
When an insurer defends a case under a reservation of rights, the insured has the option of choosing his or her own attorney (often called Cumis counsel after a California case) and having the insurer pay the reasonable charges of that attorney. What has been undetermined, until now, is whether the insurer is obligated to pay that attorney's usual hourly rate, or if it may pay the generally much lower rate it would pay to its usual insurance defense panel counsel.
In Northern Security Ins. Co., Inc. v. R.H. Realty Trust, 78 Mass. App. Ct. 691 (2011), the Appeals Court held that reasonable rates must be based on market rates rather than panel counsel rates.
The court also held that where an attorney agrees to accept a discounted rate from the insured, he or she cannot recover more than that rate from the insurer.
Thanks to Mike Tracy of Rudolph Friedmann LLP for bringing this case to my attention.