Reply With QuoteI don't understand how Progressive could possibly be liable for any amount over and above the policy amount, except for legal fees incurred in winning the case.
By the way, do any of you know if after all of this Progressive is still just liable for the policy amount? The judgement in the trial was for $760k plus legal fees in favor of the estate of the woman who died, but my understanding is that the actual UI policy the estate is actually after is capped at $100k. So I'm wondering if that is all that Progressive is required to pay.
If that is the case then it seems like they made a clear financial decision (for whatever reasons) since the estate would only accept $100k and turned down lesser offers. After all, if losing at trial brings out the worst case scenario of having to pay out $100k versus caving and paying $100k, then the financial math probably favors fighing it in court. On the other hand if Progressive is now liable for far more then they really made a big mistake.
Of course in retrospect the attention this particular case has brought them means they would have been far better off just giving the estate $100k and walking away. But since this kind of thing happens all the time from what I understand, they could hardly have expected this kind of negative public response.
I don't understand how Progressive could possibly be liable for any amount over and above the policy amount, except for legal fees incurred in winning the case.
Some have suggested the estate could now file a direct lawsuit against Progressive claiming "bad faith" but I don't see how that would work unless Progressive still refused to pay. Its my understanding from this thread and other things I've read that essentially Progressive wasn't required to do anything until a judgement was reached that called for greater financial payouts then what had already been given.Originally Posted by Scuzz
I do find it interesting that none of the parties involved have said anything today. Hopefully that means they are resolving the whole thing.
The obligations of an insurance company do not simply amount to "pay up." They are also expected to acknowledge coverage, investigate the claim, maintain communication with the insured, make a reasonable assessment of damages, etc. In other words, even if Progressive pays, they can sued for punitive damages for excessive dickishness (lawyers, chime in with the Latin terminology).
Here's an example that is similar to the OP:
A family, who lost their child in a car accident, was awarded $3.9 million after a California court determined that the insurance company had offered an unreasonably low settlement of $10,000 on a $300,000 [underinsured motorist] policy. (David Clayton v. United Services Automobile Association)
Last edited by magnet; 08-15-2012 at 04:45 PM.
While that is true, at the same time this seems to be a particular example of dealing in bad faith, and a dishonest and reprehensible handling of the situation by Progressive. Then they lie in an attempt to spin things favorably for themselves. They seem intent on kicking themselves in the groin after already poking themselves in the eye.
So this has now been settled.
I was trying to find the official statement referenced and partially quoted in the article, but have had no luck.
Well, I am a lawyer and I agree with this.
There's a time to be lawyering and a time to be straight talking.
What Progressive did was lawyering when they should have been straight-talking. That just pisses people off.
PR wise, Progressive calmly loaded the gun, disengaged the safety, aimed at their foot, and fired. Horribly handled.
I'm still not convinced they did anything actually wrong, it sounds like they followed the only legal avenue available to contest a claim they felt was inflated under the laws of the state they were operating in.
Oh crap, I think I finally figured this one out.
Maryland is one of the last remaining contributory negligence States.
So they rolled the dice to see if the jury would find the decedent even 1% at fault.
Then they would owe zero on a death claim.....
Oh crap, I think I finally figured this one out.
Maryland is one of the last remaining contributory negligence States.
http://www.msba.org/sec_comm/committ...omparative.htm
So they rolled the dice to see if the jury would find the decedent even 1% at fault.
Then they would owe zero on a death claim.....
You're surely right. And Progressive deserves its Internet ass whipping. That is horrible.
Why would that be horrible? One can disagree with the the state's law (and the state's legislature for not changing the law), but if that's the law in Maryland, why exactly would it be horrible for the company to assert its legal rights if it legitimately viewed the policy holder as being contributorily neglegent to some degree?
Because it was a dishonest policy that they sold if that is their viewpoint. Basically, if they can prove you blinked at the wrong moment, they don't have to pay. That's collecting money on a policy they have no intention of ever paying off.
And the other company already raised it's hand and said it's client was at fault and had paid out. I don't think "legitimate" ever entered their minds - they were out to game the system like the weasels they are.
We're not talking about some super-secret loophole. Contributory negligence in tort is a major policy issue. That would affect recovery in almost every auto accident situation. As I mentioned above, it's only the UIM aspect that pits this policy holder against her own insurance company.
If Maryland is a contributory negligence state, everyone should be walking around with comprehensive.
As to this particular case, we don't know whether the facts supported Progressive thinking she was barely 1% negligent. They may have very well had reason to believe she substantially contributed (e.g., going over the speed limit through the green). I don't think you can ding them for the state's legal standards.
As to the other insurance company, my understanding is that they settled. Settlement often occurs for reasons other than an admission or belief of liability. There was also some talk that they settled without perhaps the full agreement of Progressive, which would arguable shift some of the costs that the other company would have borne on to Progressive.
Again, perhaps a PR mistake, but I don't see enough here to support a claim of evil and deceptive.
Last edited by Stepsongrapes; 08-16-2012 at 11:29 PM.
I'm not sure where I read it, but someone pointed out that while Maryland is a contributory negligence state, juries have generally gotten around that in their verdicts and awards. So while they may technically rule that someone was at fault officially, they award money based on what degree of fault they think actually exists.
So while Progressive may have hoped to get away without owing any money, they were probably also aware that the award could be reduced to some degree by a jury if they were convinced that the deceased woman was at least partially to blame for the accident. We do know that in its official statement today they claimed they were not convinced the other guy was fully at fault and thats why they refused to pay out the policy in full without a trial verdict against the guy who caused the accident.
Keep in mind that we don't know what the estate was asking for in the case, all we know is that they were awarded $760,000 in damages. That may have been what the estate wanted but it may be less. If it was less it would indicate that while the jury found in their favor but felt fault was not 100%. We just don't know.
Last edited by Sarkus; 08-17-2012 at 12:13 AM.
As a former insurance defense lawyer, I would say because it's bullshit. An insurance company collects premiums so it can pay out legitimate claims, not screw its insureds out of what they are owed on technicalities. Also, it shouldn't make them sue to collect what is rightfully theirs. Contributory negligence is an archaic and grossly unfair legal concept that only manages to eek out an existence in a few legal backwaters through inertia and the fact juries purposefully ignore it. If they really did roll the dice to see if they could get a judgment holding the dead girl marginally at fault to avoid paying the entire value of the policy, they are frauds and charlatans and have no business collecting premiums.
Edit: to be specific, I guess whatever mid level executive that refused to pay the claim to juice his yearly numbers is a fraud and charlatan. Progressive just sucks for not overriding that stupid decision and doubling down on the greed and stupidity once the story went viral.
Last edited by Ed Solomon; 08-17-2012 at 07:13 AM.
Again, an issue with the state, not Progressive in particular. I'm sure Progressive has been on the wrong end of contributory negligence in cases where it issued comprehensive insurance and was seeking to recover from another motorist. It's certainly not a policy that always favors Progressive.
That "if" is unknown, as far as I can tell. What is undisputed is that Progressive felt that the estate's demand did not match up with what they felt was their liability under the laws of Maryland. That could be the estate asking for 100% on the policy and Progressive feeling it owed 50%.
Your logic flips the crazy of contributory negligence on its head: if a party accounts for contributory negligence, in any part, in its calculus they must be attempting to barely make out a 1% case of strict contributory negligence and seeking to pay nothing. You can't make that assumption.
Again, perhaps a PR disaster, but not clear proof of despicable behavior.
You're making excuses. It doesn't matter if it is super-secret or not (and how many here knew about it?), and it doesn't matter if it is legal or not - you could buy and sell people at one time, legally, but it is still reprehensible. If the systems makes it virtually impossible to collect on a policy, then collecting money on it in the first place is a deception in itself. And honestly, it's simple - you trust them, you go right ahead and insure with them. I won't.
They made their weasel status blatantly obvious by trying to be misleading about them defending the other party. Oh, we didn't defend him, Nationwide did. And yet their lawyer was there defending the other guy. This doesn't seem to register with Stepsongrapes for some reason (and let's be clear again for his benefit - they lied about defending the guy who killed their client). Only when they got called out on that bluff and the shitstorm really hit did they actually feel motivated to resolve the case.
You're saying it's okay for an insurance company to try to weasel out of paying any legal way it can, including trying to pin blame on the decedent even though the defendant had conceded?
I guess I have a different ethical compass for insurance companies.
No, I'm saying we don't know the facts with sufficient clarity to say that Progressive refused to pay what it clearly owed as per the title of this thread. It is not unreasonable for Progressive to feel that it did not clearly owe the full policy amount (saying they wanted to pay zero is an assumption).
Assume the following, for the sake of argument: the deceased policy holder was speeding while going through the green light. Other guy runs a red and hits her. Under the laws of Maryland, her etate's recovery could be affected by the fact that she was speeding.
The only undisputed facts are that Progressive did not agree with the estate on what Progressive owed, given the facts and the laws of the state.
Basically, neglegent, under-insured driver and dead sister, alone, does not automatically equal Progressive owing the full amount of the policy. Maryland, by its choice of law, makes other facts dispositive in the recovery calculus.
As to them losing the case in the end, every case that goes to trial has a loser. That doesn't make the loser automatically unreasonable or despicable.
To summarize, to say that Progressive is unequivocally acting in a despicable way here is to say that any disagreement by Progressive on the payout is unacceptable, per se. That would make the policy a no-fault policy, rather than what it is: a UIM policy, which brings into play liability for both parties because of Maryland's laws. I personally think both the concepts of UIM and contributory negligence are extremely problematic, but that's a different discussion.
While I agree that Progressive was stupid to make that statement, I think things were moving way too fast to assume that particular misstep is what lead to the settlement. Once the jury handed down its ruling Progressive was pretty clearly in a position where writing a check for $100k was in its best interests. The original blog post that started the public discussion and later firestorm of public criticism in general may have speeded the process along a bit, but my guess is that they were well along the way to writing the check well before the PR mistake of that statement.
Its also not as simple as writing a check anyway since there are other legal aspects to this that had to be negotiated. Like whether the estate was reserving its right to sue Progressive under "bad faith" claims, who got to say what publically, etc. You'll note that the original blog poster issued a short piece thanking people for their support and that was about it.
Finally, keep in mind that the civil trial was only held this month and the verdict reached just a few days before the blog post. So its not like Progressive was dragging its feet for months and months not paying the policy off after the judgement came down.
Last edited by Sarkus; 08-17-2012 at 10:52 AM.
It's true that every case has a loser, but this case also has something more quantitative: actual damages of $760,000.
Not just any disagreement. Progressive's estimated damages were far below $100,000, which is an order of magnitude away from the actual value.To summarize, to say that Progressive is unequivocally acting in a despicable way here is to say that any disagreement by Progressive on the payout is unacceptable, per se.
That's like trying to haggle the price of a Retina iPad down to $70. Yes, I think Progressive was unequivocally unreasonable.
Last edited by magnet; 08-17-2012 at 11:15 AM.
I'm not sure even snappy use of italics makes that number believable. It's not like a check for $760k somehow brings a dead daughter back. I'm really unsure what computations are used to put a value on a lost life but I have to imagine they include a lot of fuzzy variables that are open to debate.
I've been privy to negotations where one party thought they should get 100 million and the other party not only did not agree to pay out 100 mil, they thought that they should get paid 20 mil. Neither party was clearly being unreasonable: they just had different views on a couple of facts.
The difference between a 760K verdict and one that is 10K can, and often is, the finding on one factual issue (e.g., was she negligently speeding).
For me, there is one singular fact here that strongly supports despicable behavior: the statement on not defending the guy. Now, that was so easily disproven that I'm forced to believe it was sheer stupidity rather than malfeasance.
Well, the other thing we do not know is where that $760,000 figure came from. Its possible (in theory) that the estate asked for more but that was what the jury decided was sufficient. Or maybe thats exactly what the family asked for. Or maybe you don't ask for a specific amount and the jury comes up with that on its own.
Also, while the $760,000 figure seems large in comparison to what Progressive offered to settle for, Progressive was only legally on the hook for $100k per the policy anyway. That said, you would have thought Progressive would have rationally looked at the likely outcome and realized that it was very probable a jury would award far more then $100k in a wrongful death civil lawsuit, meaning that Progressive was going to pay that $100k either way.
All you can fall back on in trying to understand Progressive's position is that either a) they really are bastards or b) they really did think there were questions that needed to be legally examined in a court to determine relative blame in the accident. The latter is the position they took in their official announcement about the settlement.
Well, turns out that I too have advised banks and insurers on claims and yes, you are being an asshat if you have behaved the way Progressive did. You can disagree on the amount, and take that to court, but given the amount offered and the fact that they lost - not only did they weigh their chances badly legally it turned out a PR disaster because of how they managed the relationship with the claimant estate. Well-played Progressive legal team!
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