Notes

Bad Faith - Insurance
Defense Case - TravelCenter
DEFENDANTS' CASE

Overview
Allstate and Ms. Bari have a contract. That contract, and the law, obligates Allstate to pay a fair amount on claims in a fair time frame. But it also obligates Ms. Bari to cooperate with Allstate. That is the only way to the two parties can figure out what a “fair” amount is.

Here, Ms. Bari was misled. She hired attorneys who specialize in setting up “bad faith” claims. They do this so they can sue insurers and collect more money, including attorney fees. Ms. Bari’s attorney is the one who acted in bad faith. This attorney, named Dezi Cruz, works for a firm that specializes in personal injury lawsuits. This firm advertises on television for cases. And in this case, its attorney – Ms. Cruz – intentionally tried to set up Allstate.

You might wonder why an attorney would do this. The answer is pretty simple. An attorney gets 40% of whatever the plaintiff gets. And in this case, if a jury finds that Allstate acted in bad faith, Allstate will have to pay a penalty. Put even simpler – if Ms. Cruz had settled the case with Allstate in good faith, she would get 40% of $250,000 – or less. But if she sets up Allstate for bad faith – she will get 40% of a much larger number – as it will include the penalty.

For these reasons, Ms. Cruz avoided sending information to Allstate that would let it evaluate the claim. Specifically, Ms. Cruz did not provide the cost of future surgeries or the related lost wages. This made it impossible for Allstate to evaluate the claim fairly.

Because of this ploy, Allstate’s information showed medical bills of under $80,000, some permanent injury, and potential lost wages. Despite asking for months Allstate had no impairment rating and no concrete estimate of lost wages. Based on what it knew, Allstate saw an injury that cost about $80,000 in bills, caused some pain and suffering, and might require a surgery. Allstate also know that the plaintiff already received $100,000 from the other driver. So, Allstate’s first suggested payment of $35,000 was based on viewing the broken wrist and related costs as about $135,000, then subtracting the $100,000 already paid. Valuing a broken wrist at $135,000 is not unreasonable or unfair. If Allstate had been given an impairment rating, estimated lost wages, and the estimated cost of future surgery in a timely manner, it would have known there were other costs, been able to estimate those costs, and then make a new offer. Indeed, when Allstate finally received all this information (after the plaintiff sued), Allstate would have agreed to pay $250,000.

The truth is, Ms. Bari’s attorneys didn’t want to get the claim paid. They wanted to set up Allstate, hoping jurors would simply “hate” insurance companies and try to punish Allstate.

The timeline in this case is important, so Allstate will lay it out clearly, noting the delays that were caused by the plaintiff’s attorneys – NOT ALLSTATE.
Timeline

The delays by the plaintiff’s attorneys began almost immediately. For months, the plaintiff refused to provide a medical authorization. Ms. Bari bases her claim on damages resulting from a car accident, so the money she requests is largely intended to cover her past, present, and future medical expenses. As a result, Allstate needed to acquire Plaintiff’s medical records to properly evaluate her claim. Medical providers, of course, will not provide an insurer with a patient’s medical records unless the patient signs an authorization permitting their release, so Allstate asked Plaintiff to provide a signed authorization in June 2015. Yet Plaintiff refused, forcing Allstate to request the authorization again in October and a third time in December 2015.

This was a 6 month delay caused by the plaintiff and/or her attorneys.

It was not until after this third request and after six months had elapsed that Plaintiff finally provided a signed authorization. Nevertheless, Plaintiff made a demand on Allstate in August 2015 for payment. At that juncture, the plaintiff’s attorneys knew that Allstate did not have the medical records or other information necessary to determine the value of Plaintiff’s claim, so Plaintiff here was attempting to coerce Allstate into making an inaccurate settlement demand based on an incomplete investigation.

Ms. Bari’s attorneys also made a claim for permanent impairment. That claim can only be evaluated based upon an impairment rating, which calculates the loss of functionality. This was expressly requested for that reason, and Plaintiff agreed to that request. Since Plaintiff was also claiming damages for future medical treatment and related wage loss, supporting information was requested for that too. Again, Plaintiff promised to provide such information.

As a result, when Plaintiff told Allstate in October 2015 that she was planning to see her doctor to discuss an impairment rating and future surgical options, Allstate requested that the to-be-generated report discuss Plaintiff’s impairment rating, future surgical options, and costs. Allstate reiterated its request on December 15. Plaintiff indeed saw her doctor on January 15, 2016, yet the ensuing January 25 correspondence revealed her doctor did not perform an impairment rating or project the cost of surgery.

Making thing worse, the “correspondence” sent to Allstate appeared as if it was coming from Plaintiff’s doctor, but the plaintiff’s attorney later admitted she, and not the doctor, had written the letter.
Allstate then noted that the correspondence lacked an impairment rating or projected costs. Plaintiff’s attorney claimed ignorance to this fact, then demanded Allstate pay for a follow-up visit to get the rating Allstate had already requested. This was probably meant to cause delay and make Allstate look bad. Regardless, Allstate offered to cover the costs and did in fact cover the costs.

Attorneys for the plaintiff then sent a follow-up March 26 correspondence to the wrong Allstate entity, delaying the Allstate adjuster’s receipt of the correspondence by a month. The attorneys had been communicating with the same adjuster since at least March 2015, a full year. This makes one wonder if sending the information to the wrong person was an honest mistake, or another attempt to cause delay that could be blamed on Allstate. The plaintiff’s attorneys finally provided an impairment rating to Allstate in July 2016, ten months after Allstate first requested one.

Making things worse, before commencing litigation, Plaintiff never provided Allstate with any meaningful information from which Allstate could estimate Plaintiff’s future recovery and medical costs. This, of course, is despite the fact that Plaintiff retained a forensic expert in March 2016 and the expert met with Plaintiff and her physician in May and June 2016. Curiously, Plaintiff never disclosed this expert’s existence or opinions prior to litigation, even though that information would have made clear what the damages were and what Allstate should pay. This too was an attempt to hide the ball on Plaintiff’s future damages.

If you wonder if this is trust, consider this: Plaintiff named this very same individual as an expert witness in the lawsuit her expert report details a host of impairments. The expert knew of those impairments and could have provided them to Allstate. If Allstate had rejected detailed expert findings, maybe the plaintiff could complain. But this never happened because the plaintiff hid the expert until after the lawsuit was filed.

Plaintiff also concealed information her expert economist generated which calculated $354,100 dollars in past and future damages. In spite of basing bad faith allegations on an alleged unreasonably low offer from Allstate, these $354,100 in damages were never disclosed before the lawsuit. If the Plaintiff had disclosed a reason to believe there were over $350,000 in damages, Allstate could have assessed the claim then and offered the appropriate amount.

But this was never the plan of the plaintiff. Some of the categories of damages that are now identified by the plaintiff in this lawsuit were never pursued before the lawsuit. This includes “replacement services” for household work that Ms. Bari can no longer perform, to which plaintiff now attaches an exact damage number.

If the plaintiff’s attorneys sincerely desired to have Allstate fully consider all her alleged damages before initiating litigation – and not wanted to set the stage for a lawsuit – she would have mentioned either of these experts or their findings to Allstate before filing a case. She did not. Again, this behavior is not consistent with someone who claims she wanted Allstate to fully consider all her alleged damages or did not want Allstate to undervalue her claim.
CONCLUSION

Plaintiff alleges that Allstate delayed paying her claim, primarily by undervaluing her claim, but Plaintiff refused for six months to provide a medical authorization and Plaintiff failed to obtain an impairment rating for ten months. Plaintiff alleges that Allstate failed to adequately investigate her claim, but Plaintiff ran interference on all of Allstate’s efforts to investigate her claim, while feigning a phony desire to cooperate in the investigation of her claim. Plaintiff alleges Allstate failed to make a reasonable offer to settle her claim, but Plaintiff prevented Allstate from acquiring the information necessary to make a fully informed settlement offer for over a year and withheld hundreds of thousands of dollars of future damages (some of which Plaintiff failed to even request from Allstate before litigation). Furthermore, Allstate made three separate settlement offers between September 2015 and July 2016, but Plaintiff did not counter a single one of the offers.

All of this was a plot by Ms. Cruz – the attorney in this case – to setup a bad faith claim. That would increase the judgment because Allstate would have to pay penalty. And Ms. Cruz and her firm would receive 40% of every single dollar – including the penalty.

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