Alaska Injury Law BlogThe percentage of crash fatalities that are alcohol-related dropped substantially from 1982 — when it was 53% of fatal crashes — to 34% of fatal crashes in 1997. Since 1997, the alcohol-related crash fatality rate has remained in the 33% to 35% range. The factors that led to the substantial decrease in alcohol-related crash fatalities include stiffer drunk driving laws; a higher minimum drinking age; “zero tolerance” laws for drivers under the age of 21; a decreasing proportion of the population falling in the higher risk 18 – 34 age group; an increase in the proportion of female drivers and an increase in the percentage of total miles driven by female drivers (female drivers are much less likely to drink and drive); and a small general reduction of per capita alcohol consumption. Since 1997, however, further improvement in these statistics has stalled. Given the huge tragic toll drunk drivers still inflict on our society, new strategies and new technologies need to be enlisted to achieve another sustained decrease in drunk driving deaths. One promising possibility for prior offenders is the alcohol monitoring bracelet which continuously reads and reports on any alcohol use. As Lindsay Lohan discovered with her bracelet, it is hard to argue with a judge who has hourly readings of your alcohol consumption.
Articles Posted in Automobile Injuries
Alaska Supreme Court Affirms Attorney Fee Award Against State Farm-Insured Driver
The Alaska Supreme Court recently issued a decision with important practical implications for individuals with personal injury claims in Alaska. In a case handled by Alaska Personal Injury Group attorney Neil O’Donnell, the Court ruled that a negligent driver (who was insured by State Farm) had to pay 75% of the plaintiff’s attorney fees for not accepting plaintiff’s earlier reasonable settlement offer. Yaple v. Okagawa, Opinion No. 6494 (July 16, 2010). Under Alaska Civil Rule 68, if a party makes a settlement offer and beats that offer by 5% or more at trial, the other party has to pay up to 75% of the offering party’s attorney fees. The issue before the Alaska Supreme Court was how to calculate this attorney fee award for a prevailing plaintiff who hired his attorney on a percentage contingency fee basis.
Seventy five percent (75%) of a contingency fee may be much smaller than 75% of the attorney fees calculated on an hourly basis (i.e., the hours worked by the attorney multiplied by the attorney’s normal hourly billing rate). Plaintiffs in Alaska with modest claims previously faced the risk of having to pay a large attorney fee award to the defendant if they did not “beat” the defendant’s offer of judgment while only receiving a modest attorney fee award if they instead prevailed. In the case handled by the Alaska Personal Injury Law Group, the Alaska Supreme Court ruled that Rule 68 attorney fee awards could be calculated for both defendants and plaintiffs on an hourly basis even if the plaintiff hired his attorney under a percentage contingency fee. This ruling affirmed an attorney fee award to Mr. O’Donnell’s client that State Farm had argued was far too large.
The bottom line is that this decision substantially increases the incentives for insurance companies to accept reasonable settlement offers (instead of delaying, litigating, and hoping that claimants will eventually settle for less), at least when injured individuals are represented by competent counsel and the insurance company knows that their attorney is willing to go to trial.
Highways Safer Except for Motorcyclists
Despite a great deal of room for improvement, our roads and highways have become significantly safer over the past decade — just as long as you are not on a motorcycle. The number of annual total vehicle fatalities trended downward from 41,501 fatalities in 1998 to 37,261 fatalities in 2008, an 11% decrease. During this same ten-year period, the country’s population increased 11% from 270 million to 304 million. Expressed on a per mile basis, the overall fatality rate decreased from 1.58 fatalities per 100 million vehicle miles in 1998 to an historic low of 1.25 fatalities per 100 million vehicle miles in 2008. These statistics make the fatality rates for motorcyclists all the more surprising and disturbing. Total annual motorcyclist fatalities increased from 2,294 in 1998 to 5,290 in 2008, a 231% increase. While partially explained by increased population and ridership, the fatality rate on a per-mile basis still went up significantly from 22.3 fatalities per 100 million vehicle miles in 1998 to 36.6 fatalities per 100 million vehicle miles in 2008, a 64% increase. As also apparent from these statistics, you are 29 times more likely to die per vehicle mile on a motorcycle than in a car or truck. There are varied causes for these adverse motorcycle statistics, including other drivers failing to “see” motorcycles, but the trends and overall results are not good.
Court finds Allstate’s personal injury claims handling constitutes “malicious abuse of process”
As noted in a recent post here, Allstate has instituted a systematic, nation-wide claims handling system designed to drive down the amount of money it pays on personal injury claims. That system came under review in a recent New Mexico case where five individuals sued Allstate for “low balling” their auto personal injury claims. The Court found that Allstate had violated fair claims handling requirements “by not attempting to effectuate . . . prompt, fair and equitable settlement[s],” “compelling each of the plaintiffs to litigate their claims through a jury trial to final judgment,” and improperly using the judicial system in “an attempt to delay or extort each of the plaintiffs into accepting less than the full value of their benefits under their policy.” The Court found Allstate’s conduct constituted “malicious abuse of process.” Martinez et. al. v. Allstate, Case No. D-0101-CV-200400963, County of Santa Fe, First Judicial District, oral order dated 11/13/09). This case illustrates that injured individuals often receive Allstate’s promised “Good Hands” treatment only if they accept Allstate’s “low ball” settlement offers. Otherwise they are subject to — as an Allstate consultant put it — the “Boxing Gloves” treatment. Be prepared to put on your boxing gloves when dealing with Allstate!
New Study Finds Trucking Companies, Unsafe Trucks Causing Injuries and Deaths
America’s highways are unsafe because trucking companies routinely violate safety standards, keeping unsafe trucks and drivers on the road. These are not minor violations, but include practices like routinely overloading trucks, failing to maintain brakes and tires, using unqualified and untrained drivers, and paying drivers in a way that encourages them to exceed speed limits and driving hour limits. Given the crucial role of brakes, it is hard to comprehend that defective brakes account for more than 50% of all violations!
Those are just some of the conclusions contained in a new report just released by the American Association for Justice. Researches analyzed more than a million lines of data obtained from the Federal Motor Carrier Safety Administration (FMCSA). The full report Warning! Safety Violations Ahead may be read here.
When big heavily loaded trucks hit cars, the cars and their occupants usually lose. That’s just the law of physics. So consumers have the right to expect trucking companies to be especially vigilant about equipment maintenance and safety. But many needless injuries and deaths are caused because truckers ignore equipment problems. One egregious example is the truckers who fixed a leak in the air brake line with a toothpick and electrical tape. As any thinking person would expect, the “fix” failed after a short time, causing the needless death of a motorist.
The Hollowing Out of Insurance Coverage
Recent congressional testimony by the Legislative Director of the Consumer Federation of America (CFA) catalogued several major trends in the insurance industry over the past two decades. Most of these trends are extremely adverse to consumers including small businesses. The first trend is the “hollowing out” of the benefits provided in many insurance policies through more restrictive coverage provisions and expanding exclusions that are poorly understood by the insureds who purchase these legally complex documents. The second trend is that many major insurance companies have turned their “claims operations into ‘profit centers’ by using computer programs and other techniques designed to routinely underpay policy holder claims.” As a result, the percentage of each premium dollar that goes to pay claims has fallen dramatically over the past 20 years, producing “unprecedented profits” for insurance company shareholders and insurance company executives at the expense of the insureds. The full report can be found at:
Testimony of Travis V. Plunkett, Legislative Director, Consumer Federation of America, 7/29/08.
Injured Alaskans Need to Read New Report on Bad Faith Tricks of Insurance Companies
The Alaska Personal Injury Law Group has frequently warned injured Alaska consumers about various bad faith tactics used by insurance companies. A new study just released by the American Association for Justice documents many of the bad faith and fraudulent tricks and tactics insurance companies use to evade paying valid claims. Tricks of The Trade: How Insurance Companies Deny, Delay, Confuse and Refuse. All Alaskan consumers, but especially injured Alaskans making claims against an insurance company, need to read this revealing study.
The study details the bad faith tricks and tactics insurance companies use to delay and deny claims the policy requires the insurer to pay. It illustrates its findings with examples of tricks the insurers used against real people to deny their valid claims. These true stories involve outrageous conduct by insurance companies, reminiscent of John Grisham’s novel The Rainmaker. Unfortunately for the poor victims of this insurance company bad faith, the stories are not fiction. They illustrate well the depths to which insurers will stoop to enhance profits at the expense of the insured victims.
These sinister tactics are not limited to liability claims or automobile insurance. The horror stories include insureds who had their health insurance policies revoked in the middle of cancer treatment. The wrongful cancellations resulted in suspension of the critical treatment, delay in resuming crucial treatment, and the burden of unpaid bills totaling hundreds of thousands of dollars. Other true stories involve insureds who had their long term care policies revoked when they finally needed care, after paying premiums for the insurance for many years. In one instance, the family business had to be sold to cover the unpaid bills the insurance company wrongly refused to pay.
These horror stories are not isolated occurrences. Investigating whether an insurer engaged in wrongful post-claim underwriting to cancel health policies, California insurance regulators randomly selected 90 cases where Anthem Blue Cross cancelled policyholders who made a claim. In every single one of those 90 randomly selected cases, the regulators found that Blue Cross had violated state law in cancelling the policy. Study at p. 13.
Insurance companies use these same bad faith tactics to deny claims for damage for many different kinds of insurance. They are used on claims under homeowners’ policies, health insurance policies, long term disability policies, and others. The study names companies that engage in these bad faith schemes and gives specific examples of the bad faith, fraud, and the internal insurance company programs used to implement these tactics. Some of the companies discussed are Farmers Insurance Company, Allstate Insurance Company, State Farm Insurance Company, and AIG Insurance Company.
For example, Farmers Insurance Company had an employee incentive plan called “Quest for Gold” used to reward employees who met goals for low payments.
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Corporations Granted Preemption Immunity for Defective Products and Wrongful Acts
For the past several years, the Bush administration has pursued a covert campaign to steal the rights of victims of dangerous drugs and other defective products. Contrary to the conservative Republican mantra of “personal responsibility,” federal agencies have been giving “Get Out of Jail Free” cards to irresponsible corporate wrongdoers. The goal is to deprive the injured victims of defective products of their rights to fair compensation under state law.
An in depth study just released by the American Association for Justice has documented how federal agencies have used “preemption” to try to allow corporate wrongdoers to escape justice. What is preemption? Rightly used, preemption means a federal law preempts all contrary state laws where Congress has expressed its intent to totally occupy a specific area of law.
What is the result of such language? If it is effective, consumers can be prevented from filing lawsuits in state court when the product that injured them complied with federal standards, no matter how inadequate those regulations may be. No suit may be maintained even though the product might be considered defective under state law. By this means, the federal law trumps the state law, and the corporate wrongdoer is immune from liability for the injuries its product caused.
Political appointees of the Bush administration have gutted many of the regulations that are supposed to protect us all. Compounding the wrong, they then inserted into those ineffective regulations language that purports to preempt lawsuits by victims of dangerously defective drugs, defective automobiles, and other harmful products. Since 2005, seven agencies of the United States government have issued more than 60 rules with preemption language in the preamble to the rule. These preemption provisions generally were inserted at the last minute, without notice to interested state governments, consumers or other affected groups. Often, the proposed rule stated that no preemption was intended, but the Bush bureaucrats inserted a preemption provision into the final rule after public comment had ended.
“Why,” you may ask, “would the government want to keep people injured by dangerous drugs or other defective products from asserting their legal rights?” Why, indeed. Protection of the public is the mission of many of the agencies that have tried to cheat these victims and help the corporations that harmed them. Contrary to their true mission, under the Bush administration the agencies have taken up the cause of protecting corporations at the expense of public safety. A bigger perversion of the role of federal regulators would be hard to find.
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Federal Preemption: A Picture Worth A Thousand Words
If the administration’s preemption efforts continue to bear fruit,(see our concerns about this here and here), then any federal regulation will serve to prohibit someone who is injured from bringing a claim against a defendant who has maimed or killed someone they love. A case in point: if an auto manufacturer has met federal design minimums (remember, they can always design a product more safely than the minimum standards dictate), the manufacturer will say that the government has “approved” the design, and that it shouldn’t be subject to litigation if the design proves faulty, regardless whether the design failure involves exploding gas tanks, failing seat belts ( see our litigation against GM about this Farnsworth v. General Motors), or vehicle rollovers.
The lesson for the class today involves roof crush. Follow the links below, and you will see video footage demonstrating that the federal roof strength standard will not protect vehicle occupants. Passengers who sustain these injuries often face the horrific consequences of brain injuries, spinal cord injuries, or death. Should the injured passenger’s claim be preempted by federal regulation when it is patently clear that rollover accidents are foreseeable and that manfuacturers can design a vehicle to withstand them? (Remember that this legal sea change was brought to you by politicians pledging to keep the government out of your business and to maximize states rights against the overreaching urges of the federal government…)
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Victory, the Gift that Keeps Giving
Alaska is the only state where the party that prevails in litigation is regularly entitled to recover partial attorney fees and litigation costs from the losing side. For an injured individual, this can mean that a major portion of their attorney fees and costs will effectively be paid by the defendant at the end of the case. Personal injury plaintiffs often greatly benefit from this rule.
Defendants, however, can make use of this rule by making an “offer of judgment.” If the injured plaintiff does not obtain a judgment that is at least 95% or more of the defendant’s “offer of judgment,” the plaintiff has to pay a portion of the defendant’s attorney fees and litigation costs.
Evie Rhodes found herself in the latter unhappy situation in an automotive personal injury case recently decided by the Alaska Supreme Court. Rhodes v. Erion. (This case was not handled by the Alaska Personal Injury Law Group.) Erion admitted negligently rear-ending Rhodes’ car but disputed the amount of the damages. Erion made an “offer of judgment” of $30,000 early in the case which Rhodes rejected. Rhodes ultimately obtained a judgment against Erion after trial of $27,016 — only 90% of the $30,000 offer. This meant that Erion, the negligent driver, was now the “prevailing party.” The court ordered Rhodes to pay Erion $42,263 in attorney fees, which amount completely offset Rhodes’ judgment and left Rhodes owing Erion $17,411. As the Alaska Supreme Court mildly put it, “the result in this case was less than ideal from Rhodes’ perspective.”