A Philadelphia plaintiffs’ attorney last month secured an $18 million
settlement with an insurer in what is believed to be one of the largest such bad faith settlements with an insurance company involving an underlying $100,000 policy in Pennsylvania history.
Attorney Joel J. Feller, of the Philadelphia-based law firm of Ross Feller Casey, announced in mid-December that he had reached the multi-million dollar settlement with Erie Insurance Exchange in a bad faith case that was initiated by the family of a 15-year-old boy who sustained severe brain injuries during a February 2003 vehicle accident.
The teenager, Stephen Piper, was a passenger in a car driven by his brother, Kyle, on Feb. 22 of that year when the vehicle struck a utility pole.
The record shows that Stephen Piper, who had to be flown by helicopter to a hospital, and ended up spending several weeks in a coma, subsequently sued his brother in the Lawrence County Court of Common Pleas.
The Legal Intelligencer reported that that case ended with a $15.6 million verdict following a trial on damages; a judge had earlier granted judgment on liability.
The bad faith case, the paper reported, stemmed from Erie’s failure to settle the claim that was “grossly underinsured” with $100,000 in bodily injury limits.
Feller, the attorney representing Stephen Piper, told the Legal Intelligencer that “any reasonable insurance professional would conclude that the value of Stephen’s injuries far exceeded the $100,000 policy.”
Feller was quoted as saying that Erie maintained it did not initially have enough documentation pertaining to the seriousness of Stephen Piper’s injuries.
In his filings, Feller also alleged that the insurance company failed to offer a settlement by the fall of 2003, even though by that point the insurer had supposedly received the requested medical record relating to the bodily injury claims.
When an offer was finally made, the insurer “unreasonably and in bad faith” conditioned the settlement upon Piper’s release of all claims against Erie, Feller reportedly said.
The insurance company had also reportedly argued that any punitive damages claims were time-barred because the bad faith claim was filed following the expiration of the two-year statute of limitations.
The accident that triggered the litigation was reportedly horrific, and involved the vehicle striking a pole and ripping in half, causing Stephen Piper to sustain serious brain injuries and head trauma.
The young man was left with permanent physical and cognitive impairments.
In a Dec. 20 blog entry on MyPhillyLawyer, attorney Dean Weitzman wrote that insurance disputes such as this one are not that unusual for victims of serious vehicle accidents.
“Left to their own devices, profit-motive-driven insurance companies often don’t do the right thing,” Weitzman wrote. “They often don’t live up to their contractual and ethical obligations to pay claims when they are due. Instead, they put their own greedy corporate interests ahead of those of innocent victims.”
Weitzman also took a shot at state lawmakers, saying the Pennsylvania General Assembly has been enacting legislation that doesn't actually benefit citizens.
An example he gave was the recent change to joint-and-several liability, specifically with regard to insurance law, a move Weitzman says makes it hard for vehicle accident victims to collect “adequate damages for their severe injuries.”
“Insurance companies exhibit bad faith when they refuse to pay legitimate claims in a timely manner,” Weitzman wrote. “Bad faith is illegal and can cost insurance companies lots of extra damages, as it did in this case.”