A big rig accident took place on Interstate 5, coming down the Grapevine. One person killed, numerous others injured. My client leased out the involved trailer to a trucking company. The trucking company was supposed to keep the brakes in good working condition. It didn’t. The Certificate of Insurance, issuer at first wanted to apply the entire $1 million dollars benefit.
This case was not going to settle, or likely end in judgment, at or below $1 million. My client’s insurance agent had told him that ensuring five of his trailers, the ones that he was actually using, would be sufficient. Thus, coverage was doubtful as to this specific trailer. I was able to convince coverage counsel (this particular insurance company is infamous for its recalcitrance) to throw in $100,000, the client paying $20,000, and most importantly, plaintiff’s counsel accepting the foregoing, in addition to the $1 million of certificated insurance. That was not a “good settlement” but really “a great one.”
Environmental contamination lawsuit, five plaintiffs including the EPA. I tendered my clients claim to the insurance carrier. The carrier refused to indemnify, but realizing its duty of defense was broader, and agreed to pay for the defense pursuant to what is called “a reservation of rights letter.”
The case of drug on for years, and was absolutely nowhere near settlement. The total EPA demand was $125 million, of which they wanted about $5 million from my client. The carrier’s coverage counsel and claims adjuster call me, yelling and screaming, “We’ve paid (some huge sum) in defense costs, and you say the case is not ready to settle.” I respond, “No, it’s not ready for any of the approximate 40 defendants to settle.” They say, “You know, we can terminate you by extending coverage, and replace you with one of our panel attorneys.” [Yes, but only if it wasn’t too late and somehow prejudiced our client].
My response, because it would get incredibly valuable coverage for the client, was “Do it.” I get a letter of termination and extension of coverage. A few weeks later coverage counsel calls and says, “Mr. McCollum, would you continue to defend the case?” I asked, “Why would you want me to do that?” “Well,” came the reply, “we can’t find an attorney without a conflict of interest, and, everyone we spoke to said that you are absolutely ‘the best.’” With the great benefit of coverage in hand for my client I agreed. Ultimately I did settle the case, for $25,000 which the insurance carrier was delighted to pay.
This was a matter involving an inadequate defense by insurance carrier appointed panel defense lawyer. The client came to me and explained the situation. In short his company was the masonry contractor on a fairly large development. The grading contractor had constructed a dirt ramp. One of my client’s cement mixers was proceeding up that ramp, when it collapsed. It rolled over a young worker, who had just been made foreman, and had just married. It crushed him to a pulp from the waist down. There was a CGL policy in force with $1 million in coverage. In very brief the client explained to me that the appointed attorney, the youngest at the firm, seemingly never handled a case before, appeared to be doing everything wrong. He presented me with some ugly examples.
In the course of my investigation I determined that there was umbrella policy, in relation to which no tender had been made. Seemingly no one had even thought about it. I contacted the primary carrier directly and presented the litany of errors by the insurance carrier appointed counsel. The claims adjuster was quite unimpressed, probably knowing that a case by an insured client against a lawyer faces tremendous odds, but was quite taken aback when I informed him that the umbrella carrier would have a very strong legal position, if the matter exceeded the underlying coverage. I gave the adjuster a 24 hour window in which to settle the claim against our client whatever amount was necessary, or, I would tender to the umbrella carrier.
The primary carrier, even though its maximum publication was $1 million on the policy, was able to immediately settle the case for $1,600,000 and thereby avoid any exposure to either my client or the umbrella carrier.
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