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greed2.jpgAs a Plaintiffs’ personal injury law firm, we deal with insurance companies every day. Thanks to current Florida law, insurance companies are duty bound to act in the best interests of their insureds, the individuals and companies who pay for insurance coverage. Acting in the best interests of an insured sometimes means that an insurance company should tender its insured’s policy limits to the injured party. If done timely, the tender will keep the insured from being exposed to a court judgment in excess of his/her or its policy limits.

When an insurance company fails to tender the policy limits at a time when it could have and should have based on the information at hand, it exposes its insured to an excess judgment. This is considered bad faith. When an insurance company has been found to have acted in bad faith, a determination made by a jury based on evidence, it, rather than its insured, will be required to satisfy the excess judgment. Given that its bad faith created the exposure, this outcome is fair.

Insurance companies do not like being told how to behave, including towards their own customers.

The insurance industry has tried for years to eliminate through legislation and court decisions the duty to act in good faith towards their own customers. However, because the duty is so solidly grounded on reasonableness and good sense, their efforts to date have proved unsuccessful. Unfortunately, they do not give up.

With Governor Scott and a solid majority of right-wing Republicans, in the Florida House and Senate, in control of lawmaking in Florida, during the upcoming legislative session, scheduled to begin in January, 2012, the insurance industry will be proposing legislation to end their duty to act in good faith. In fact, one bill, HB 427 has already been proposed, by Rep. Kathleen Passidomo (R-Naples).

This is a serious topic, about which I have and will continue to blog at length, with far reaching ramifications. Ironically, those who are the most at risk by the proposed legislation are the very same constitutents who generally support right-wing policies, wealthy individuals and corporations.

Reproduced here is a well written article on the subject by Steven Marino, a prominent South Florida “bad faith” attorney, which was published in the Sunday (10/23/11) Miami Herald.
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By Stephen A. Marino Jr.
Special to The Miami Herald
You’re in good hands. Your insurer is on your side, because it’s like a good neighbor. Some companies live up to their slogans, but some use promises to induce Floridians to entrust their livelihoods and businesses to companies offering liability insurance.

When the paperwork is signed and the premiums are paid, it’s all smiles and handshakes. But if the small business owner is a few days late on a premium payment, or makes a mistake on the policy application, coverage is terminated. But what happens if the insurance company makes a mistake?

Florida law has long recognized an insurance company’s fiduciary obligation to protect its policyholder from a judgment exceeding the limits of the policy. Since at least 1938, Florida courts have clearly expressed that an insurer must act honestly and in good faith toward the insured. The reasoning is simple: An insurance company writes a contract that gives it complete control over the defense and settlement of a claim against the policyholder, and must therefore use “the same degree of diligence as a person of ordinary care and prudence should exercise in the management of his own business.”

The insurance company insists that it make the decisions, so Florida law requires that it do so while acting in the best interest of its insured. If the insurance company makes a mistake, and the result is a liability judgment against the policyholder, the law places the responsibility for the judgment on the insurance company, not the small business.
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maze.jpgFlorida’s motor vehicle insurance laws can be hard to comprehend.

A case in point: Personal Injury Protection (PIP) and Property Damage – Liability are the only required coverages for an owner to lawfully operate a vehicle on Florida’s streets and highways. (PIP pays 80% of medical bills and 60% of lost wages for the insured up to $10,000, while Property Damage – Liability pays to repair or replace the other owner’s motor vehicle.) With these coverages, the owner is able to register a vehicle and purchase a license plate.

Surprisingly, however, in the event of a motor vehicle accident involving injury or death, having the minimum mandatory coverages will not prevent the at-fault party from having her drivers license and all vehicle registrations suspended. Sections 316.066(3)(a)1 and 324.051(2)(a) Florida Statutes.

The only type of coverage that will prevent these suspensions is Bodily Injury liability (a/k/a BI). Section 324.021 (7) Florida Statutes.
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car-insurance-policy.jpgOne thing is certain, “full coverage” is not what most people think it is.

The only types of insurance coverage required by law of every owner of a motor vehicle registered in Florida are Personal Injury Protection (“PIP”) and Property Damage – Liability. Period.

There are numerous other types of coverages available under a standard Florida motor vehicle insurance policy, but none of them are mandatory like PIP and PD – Liability. Each of the coverages cost extra money, meaning that an additional premium will be charged for each. Consequently, many people forego the non-mandatory coverages.

PIP (Florida Statute 627.736) covers a combination of 80% of allowable medical charges and 60% of lost wages up to the standard policy limit of $10,000 subject to deductibles (usually $500, $1000, and $2,000), while Property Damage Liability covers vehicle damage caused by the at-fault insured. (The minimum mandatory PD – Liability policy limit is $10,000.) Neither PIP nor PD – Liability provides compensation to anyone for pain and suffering.

Only Bodily Injury – Liability (“BI”) and Uninsured/Underinsured Motorist (“UM/UIM”) (Florida Statute 627.727) compensate for pain and suffering. Neither coverage is mandatory. (Many other states make BI mandatory. For years, consumer advocates have tried to make BI mandatory in Florida, but the insurance industry has fought off the efforts. The members of our law firm believe that if any coverage should be mandatory, it should be BI.)
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cemetery1.jpgWho can be compensated and the types of damages that are available when a person dies through the wrongful act or negligence in Florida of any person or company is prescribed by statute in the “Florida Wrongful Death Act,” sections 768.16 through 768.26. The chart below is a breakdown of section 768.21.

Wrongful Death claims are brought on behalf of statutory “survivors” by the Personal Representative of the decedent’s estate. The Personal Representative, typically a family member and often a survivor, is appointed by the court after due notice is given to all interested parties. The Personal Representative hires the attorney who will bring a claim to recover damages for the decedent’s estate and survivors. Florida wrongful death attorneys handle these cases on a contingent basis, meaning that attorney’s fees are paid only after a successful recovery has been made in the case. The standard within the legal industry is for the fee to be a percentage of the overall recovery, rather than being based on an hourly rate.

Who may recover under the Act and to what extent varies according to the circumstances of each case and can be confusing. There have been many legal challenges to the Act, yet it has survived all challenges essentially intact. At this point in time, it will take action from the Florida Legislature to change the Act.

The goal of this blog is to make the Act understandable. The chart shows the types of damages that can be recovered and by whom. Many of the variations and exceptions are counterintuitive and unfair. For example, a surviving spouse will preclude the recovery of any damages by the decedent’s parents. In addition, the Act gives special consideration to medical providers, in some instances putting them beyond the reach of the law for causing death by medical negligence/malpractice.

Spouse Dies – Surviving Spouse but no Surviving Children
Spouse’s Damages:

  • Loss of Decendent’s Companionship and Protection
  • Mental Pain and Suffering from date of injury
  • Loss of Support and Services from date of injury to date of death (w/ interest)
  • Future Loss of Support and Services from date of death (at present value)
  • Medical and Funeral Expenses due to decedent’s injury/death if paid by survivor

Spouse Dies with Surviving Children and Surviving Spouse
Spouse’s Damages:

  • Loss of Decendent’s Companionship and Protection
  • Mental Pain and Suffering from date of injury
  • Loss of Support and Services from date of injury to date of death (w/ interest)
  • Future Loss of Support and Services from date of death (at present value)
  • Medical and Funeral Expenses due to decedent’s injury/death if paid by survivor

Children’s Damages:

  • Loss of Support and Services from date of injury to date of death (w/ interest)
  • Future Loss of Support and Services from date of death (at present value)
  • Minor children only (under the age of 25 – Section 768.18(2) Florida Statutes), or all children if there is no surviving spouse, may also recover loss of parental companionship, instruction, and guidance and mental pain and suffering from date of the injury

Parent Dies with Surving Children but no Surviving Spouse
Surviving Children:

  • Loss of Support and Services from date of injury to date of death (w/interest)
  • Future Loss of Support and Services from date of death (at present value)
  • All children may recover loss of parental companionship, instruction, and guidance and mental pain and suffering from date of the injury

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worker.jpgDuring these challenging economic times, our law firm is seeing a sharp reduction in the number of hours employees are being paid to work. Fewer employees are working overtime and many are seeing their hours reduced below the traditional 40 per week.

There are no state or federal laws mandating minimum work hours for Florida employees. The only obligation Florida employers have to those who work less than 40 hours a week is to pay the state minimum wage – $7.31/hr as of June 1, 2011.

Although employees do not have the right to be employed for a minimum number of hours, they do have the right to be compensated for all on duty time. This may seem like a straightforward proposition, but it is an issue that has given rise to a significant amount of litigation going back to the 1940s.

What we are seeing today is that employees are not being paid while waiting to work versus working. Whether this is proper is a question of fact involving “scrutiny and construction of the agreements between the particular parties, appraisal of their practical construction of the working agreement by conduct, consideration of the nature of the service, and its relation to the waiting time, and all of the surrounding circumstances. Facts may show that the employee was engaged to wait, or they may show that he waited to be engaged.” Skidmore v. Swift Co., 323 U.S. 134, 137 (1944). Importantly, there is no principle of law found either in statute or Court decisions precluding waiting time from also being working time deserving of compensation. Armour & Co. v. Wantock et al., 323 U.S. 126 (1944).
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scales of justice.jpgCorporate America has campaigned for more than 30 years to turn the thinking of average citizens against the civil justice system. Sadly, the campaign has worked, fostering views that are contrary to one of the fundamental principles on which America was founded, namely, that the individual should be able to seek redress from the powerful on equal footing. Reference: We the People.

With the hope of encouraging people to resist Corporate America’s dangerous propaganda, this blog gives a primer on the basic issues centering around the Tort Reform debate, or, as I refer to it, Tort Deform.

What is the civil justice system? It is the system individuals and corporations use for suing in civil court to seek compensation for alleged harm caused by other individuals and corporations. The fundamental components of the system are judges, juries, and lawyers for both sides.

What is a “tort”? A tort is harm that a company or a person causes another person either on purpose or because they are negligent. The best known torts involve personal injuries, but can include other types of actions. The Plaintiff is the party who brings the action and is usually seeking monetary compensation.

Aren’t these personal injury or “tort” lawsuits flooding the courts? No. Tort cases make up only 6 percent of the entire civil court caseload and they are decreasing. The National Center for State Courts shows a 21 percent decline in tort filings from 1996 to 2005. Richard LaFountain et al., Examining the Work of State Courts: A National Perspective from the Court Statistics Project (National Center for State Courts 2009) at 1, 2. (The Court Statistics Project is a joint project of the Conference of State Court Administrators, the U.S. Department of Justice’s Bureau of Justice Statistics and the National Center for State Courts.)

  • Only 10 percent of injured Americans ever file a claim for compensation, which includes informal demands and insurance claims. Only two percent file lawsuits. David A. Hyman and Charles Silver, “Medical Malpractice Litigation and Tort Reform: It’s the Incentives, Stupid,”59 Vand. L. Rev. 1085, 1089 (May 2006) (citing Thomas F. Burke, Lawyers, Lawsuits, and Legal Rights: The Battle over Litigation in American Society 3 (2002));Rand Institute for Civil Justice, Compensation for Accidental Injuries in the United States (1991).
  • Academics generally concede there is no evidence that “frivolous” lawsuits are a problem.
  • In 1999, the Institute of Medicine (IOM) concluded that between 44,000 and 98,000 Americans die each year (and 300,000 are injured) due to avoidable medical errors in hospitals alone. Yet eight times as many patients are injured as ever file a claim; 16 times as many suffer injuries as receive any compensation. The Harvard School of Public Health closely examined 1,452 closed claims and concluded that “[p]ortraits of a malpractice system that is stricken with frivolous litigation are overblown.” David M. Studdert et al., “Claims, Errors, and Compensation Payments in Medical Malpractice Litigation,” New England Journal of Medicine, May 11, 2006. The study found that most injuries resulting in claims were caused by medical error, and that those that weren’t were, nevertheless, not “frivolous” claims.
  • In 2005, tort jury and bench trials together constituted 1.3 percent of all general civil dispositions in 79 jurisdictions reporting and 3.5 percent of all tort dispositions in 104 jurisdictions reporting.

What is “tort reform”? This term refers to laws that benefit the corporate sector. These laws make it more difficult for injured people to sue in civil court, or limit the power of judges and juries to make decisions in tort cases. (See these examples: 2010 Florida Legislature Further Curtails the Rights of Medical Malpractice Victims; Vehicle Owners – Other Than Rental Agencies – Vicariously Liable Under Florida Law.)
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worker2.jpgBecause of the limits on compensation available to injured employees through Florida’s workers’ compensation system, Chapter 440, the preferred remedy in cases involving some negligence on the part of the employer is an action at law for damages on account of such injury or death. In contrast to workers’ compensation, this remedy allows for damage awards based on mental pain and suffering, loss of consortium, loss of the decedent’s companionship and protection, past and future loss of support and services.

Unfortunately, the remedy is rarely available to employees or their survivors against employers. Florida Statute 440.11 sees to this limitation by giving employers workers’ compensation immunity.
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mri-image-brain.jpgMagnetic resonance imaging (MRI) is a test that uses a magnetic field and pulses of radio wave energy to make pictures of organs and structures inside the body. In many cases MRI gives different information about structures in the body than can be seen with an X-ray, ultrasound, or computed tomography (CT) scan. MRI also may show problems that cannot be seen with other imaging methods. It is the standard diagnostic test for viewing the intervertebral discs.

In some instances, contrast material is used to enhance the images made by the MRI. Some of those imaging agents contain the chemical gandolinium. U.S. government regulators have begun warning doctors that this class of injectable can cause a rare and sometimes fatal condition in patients with kidney disease. The Food and Drug Administration is adding its strongest warning label to the imaging agents that contain gandolinium.

If contrast material is used, the technologist will put it in through an intravenous (IV) line in your arm. The material may be given over 1 to 2 minutes.
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greed.jpgThe subject of this blog dovetails nicely with the current Wall Street protests over corporate greed.

It was recently learned that State Farm Insurance raised between $2.4 and $4 million for the 2004 election campaign of an Illinois judge. It was the most expensive race in U.S. judicial history.

The judge, Lloyd Karmeier, won the race to become a member of the Illinois Supreme Court, the highest court in the state. From that perch, he voted to overturn a $1 billion judgment that had been entered against State Farm.*

Losing its case at the trial level, before an impartial jury, it appears that State Farm sought an extra-judicial remedy, albeit cloaked in the garments of a sitting judge.
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capitol-us.jpgFollow this link, Ros-Lehtinen rethinks, to read my letter to the editor published by the Miami Herald on September 29, 2011.

I wrote the letter in response to an article published by The Herald on September 25, complimenting Rep. Ros-Lehtinen for co-sponsoring the Respect of Marriage Act, a law designed to extend rights to gays and lesbians. Instead of being duly impressed with her position, which I support, I was disappointed that she was receiving gushing recognition for coming to a decision, at age 59, that any fair minded person would understand from the earliest days of their ability to reason and consider. By the age of 5 years, each of my two children understood what it has taken Rep. Ros-Lehtinen 59 years to appreciate.
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