Tennessee Trucking Accident Watch: Unfair Insurance Company Settlement Practices in Rhodes v. AIG

When you are involved in a Tennessee trucking accident it is important to have an experienced personal injury attorney to guide you in the settlement and trial process. A veteran Knoxville injury attorney can help you identify the parties that are at fault or those who are acting negligently. And most importantly can help you deal with insurance companies focused on limiting your claim and protecting their bottom line.

Rhodes v. AIG is a case that illustrates the deceptive practices of insurance companies. The issue addressed here is how to manage damages where the defendant insurance company is engaged in willful and knowing unfair settlement practices.

Rhodes was the driver of a passenger vehicle when the defendant Carl Zalewski, who was negligently driving an eighteen wheel truck, hit plaintiff in the rear of her car. While Zalewski was driving this truck, he was acting within his job duties as a driver for Driver Logistic Services (DLS). DLS had their primary insurance with Zurich and their excess policy with National Union Fire Insurance Company (“National Union”). Their coverage was $2 million and $50 million respectively.

Excess insurance coverage is used by large companies to shield themselves from the risks and liabilities of these highly dangerous accidents involving trucks.

Upon the impact to the plaintiff’s vehicle, Rhodes suffered a fractured spine leading her to become paraplegic. Plaintiff spent several months in the hospital after spinal fusion surgery. She also suffered from several other health issues because of this injury to her spine.

Through this case it is seen how tragic the injuries can be in trucking accident cases. This plaintiff, who was not at fault, will spend the rest of her life in a wheelchair. Also, her family suffered and will continue to suffer greatly because of the injuries Rhodes sustained.

The court in this case was charged with interpreting their state statute in determining how to establish a punitive damages award in the instance where one party fails to promptly, fairly and equitably negotiate settlement with the plaintiff. The Georgia Statute does not require insurance companies to settle with plaintiffs, but what is required is that the insurance companies act promptly and reasonably when the negotiations are taking place.

In order to find the defendant’s guilty of this, the court said that the plaintiff had to prove that the breaching party willfully and knowingly participated in these unfair settlement practices. Plaintiff alleges that both of the insurance companies involved were participating in this behavior, which was therefore a violation of the statute at issue.

Five months after the plaintiff filed a lawsuit against the two insurance companies, plaintiff settled with National Union, the excess insurance carrier, through their claims administrators at AIG.

Although the plaintiff settled with one of the parties, the case continued to the superior court where the court heard the case. They found that the primary insurance company did not violate the statute because it did not infringe on the integrity of the settlement process. The court went on to explain that the issue of whether National Union or their claim administrators at AIG violated the statute was irrelevant because even if the plaintiff proved that those parties were engaging in this behavior, she would be barred from collecting damages from them two times.

What the court did explain was that the state statute that is controlling in deciding punitive damages associated with unfair settlement practices, awards damages where the plaintiff is able to prove that there is a link between their injuries and the unfair practices she is contending. If the plaintiff is able to prove this, the court held that the statute indicates the plaintiff’s award for punitive damages is two times the award plaintiff received in the original suit.

The application of the law to the facts in this case would have led the plaintiff to receive an exorbitant amount of money. Although the court was very sympathetic to plaintiff’s injuries, they do contend that they do not necessarily agree with doubling the original damages award as punishment for unfair settlement practices.

Rhodes is a case that warns the legislatures to make sure that the statutes that are used in determining damages, provide for an equitable award.

Had the attorney in this case warned her client not to settle, the client would have received an additional $22 million dollars.

You need the right attorney to help you navigate through all the law to get you the award you are entitled to.

If you have been injured contact Tennessee Injury Attorneys at Hartsoe Law Firm, P.C. to schedule a free appointment. Call (865) 804-1011.