Alaska Injury Law Blog

America's highways are unsafe because trucking companies routinely violate safety standards, keeping unsafe trucks and drivers on the road. These are not minor violations, but include practices like routinely overloading trucks, failing to maintain brakes and tires, using unqualified and untrained drivers, and paying drivers in a way that encourages them to exceed speed limits and driving hour limits. Given the crucial role of brakes, it is hard to comprehend that defective brakes account for more than 50% of all violations!

Those are just some of the conclusions contained in a new report just released by the American Association for Justice. Researches analyzed more than a million lines of data obtained from the Federal Motor Carrier Safety Administration (FMCSA). The full report Warning! Safety Violations Ahead may be read here.

When big heavily loaded trucks hit cars, the cars and their occupants usually lose. That's just the law of physics. So consumers have the right to expect trucking companies to be especially vigilant about equipment maintenance and safety. But many needless injuries and deaths are caused because truckers ignore equipment problems. One egregious example is the truckers who fixed a leak in the air brake line with a toothpick and electrical tape. As any thinking person would expect, the "fix" failed after a short time, causing the needless death of a motorist.

The study found that more than 28,000 trucking companies are operating on U.S. roads with safety violations, representing over 200,000 trucks. Truck crashes caused over 12% of all motor vehicle deaths, even though trucks make up only 4% of all vehicles on the road. And that statistic is not a result of trucks covering more miles, because trucks cause deaths per mile driven that are 56% higher than those caused by all vehicles combined.

Continue reading " New Study Finds Trucking Companies, Unsafe Trucks Causing Injuries and Deaths " »

Recent congressional testimony by the Legislative Director of the Consumer Federation of America (CFA) catalogued several major trends in the insurance industry over the past two decades. Most of these trends are extremely adverse to consumers including small businesses. The first trend is the "hollowing out" of the benefits provided in many insurance policies through more restrictive coverage provisions and expanding exclusions that are poorly understood by the insureds who purchase these legally complex documents. The second trend is that many major insurance companies have turned their "claims operations into 'profit centers' by using computer programs and other techniques designed to routinely underpay policy holder claims." As a result, the percentage of each premium dollar that goes to pay claims has fallen dramatically over the past 20 years, producing "unprecedented profits" for insurance company shareholders and insurance company executives at the expense of the insureds. The full report can be found at:
Testimony of Travis V. Plunkett, Legislative Director, Consumer Federation of America, 7/29/08.

The Alaska Personal Injury Law Group has frequently warned injured Alaska consumers about various bad faith tactics used by insurance companies. A new study just released by the American Association for Justice documents many of the bad faith and fraudulent tricks and tactics insurance companies use to evade paying valid claims. Tricks of The Trade: How Insurance Companies Deny, Delay, Confuse and Refuse. All Alaskan consumers, but especially injured Alaskans making claims against an insurance company, need to read this revealing study.

The study details the bad faith tricks and tactics insurance companies use to delay and deny claims the policy requires the insurer to pay. It illustrates its findings with examples of tricks the insurers used against real people to deny their valid claims. These true stories involve outrageous conduct by insurance companies, reminiscent of John Grisham’s novel The Rainmaker. Unfortunately for the poor victims of this insurance company bad faith, the stories are not fiction. They illustrate well the depths to which insurers will stoop to enhance profits at the expense of the insured victims.

These sinister tactics are not limited to liability claims or automobile insurance. The horror stories include insureds who had their health insurance policies revoked in the middle of cancer treatment. The wrongful cancellations resulted in suspension of the critical treatment, delay in resuming crucial treatment, and the burden of unpaid bills totaling hundreds of thousands of dollars. Other true stories involve insureds who had their long term care policies revoked when they finally needed care, after paying premiums for the insurance for many years. In one instance, the family business had to be sold to cover the unpaid bills the insurance company wrongly refused to pay.

These horror stories are not isolated occurrences. Investigating whether an insurer engaged in wrongful post-claim underwriting to cancel health policies, California insurance regulators randomly selected 90 cases where Anthem Blue Cross cancelled policyholders who made a claim. In every single one of those 90 randomly selected cases, the regulators found that Blue Cross had violated state law in cancelling the policy. Study at p. 13.

Insurance companies use these same bad faith tactics to deny claims for damage for many different kinds of insurance. They are used on claims under homeowners’ policies, health insurance policies, long term disability policies, and others. The study names companies that engage in these bad faith schemes and gives specific examples of the bad faith, fraud, and the internal insurance company programs used to implement these tactics. Some of the companies discussed are Farmers Insurance Company, Allstate Insurance Company, State Farm Insurance Company, and AIG Insurance Company.

For example, Farmers Insurance Company had an employee incentive plan called “Quest for Gold” used to reward employees who met goals for low payments.

Continue reading " Injured Alaskans Need to Read New Report on Bad Faith Tricks of Insurance Companies " »

For the past several years, the Bush administration has pursued a covert campaign to steal the rights of victims of dangerous drugs and other defective products. Contrary to the conservative Republican mantra of "personal responsibility," federal agencies have been giving "Get Out of Jail Free” cards to irresponsible corporate wrongdoers. The goal is to deprive the injured victims of defective products of their rights to fair compensation under state law.

An in depth study just released by the American Association for Justice has documented how federal agencies have used "preemption" to try to allow corporate wrongdoers to escape justice. What is preemption? Rightly used, preemption means a federal law preempts all contrary state laws where Congress has expressed its intent to totally occupy a specific area of law.

What is the result of such language? If it is effective, consumers can be prevented from filing lawsuits in state court when the product that injured them complied with federal standards, no matter how inadequate those regulations may be. No suit may be maintained even though the product might be considered defective under state law. By this means, the federal law trumps the state law, and the corporate wrongdoer is immune from liability for the injuries its product caused.

Political appointees of the Bush administration have gutted many of the regulations that are supposed to protect us all. Compounding the wrong, they then inserted into those ineffective regulations language that purports to preempt lawsuits by victims of dangerously defective drugs, defective automobiles, and other harmful products. Since 2005, seven agencies of the United States government have issued more than 60 rules with preemption language in the preamble to the rule. These preemption provisions generally were inserted at the last minute, without notice to interested state governments, consumers or other affected groups. Often, the proposed rule stated that no preemption was intended, but the Bush bureaucrats inserted a preemption provision into the final rule after public comment had ended.

"Why," you may ask, "would the government want to keep people injured by dangerous drugs or other defective products from asserting their legal rights?" Why, indeed. Protection of the public is the mission of many of the agencies that have tried to cheat these victims and help the corporations that harmed them. Contrary to their true mission, under the Bush administration the agencies have taken up the cause of protecting corporations at the expense of public safety. A bigger perversion of the role of federal regulators would be hard to find.

Continue reading " Corporations Granted Preemption Immunity for Defective Products and Wrongful Acts " »

If the administration's preemption efforts continue to bear fruit,(see our concerns about this here and here), then any federal regulation will serve to prohibit someone who is injured from bringing a claim against a defendant who has maimed or killed someone they love. A case in point: if an auto manufacturer has met federal design minimums (remember, they can always design a product more safely than the minimum standards dictate), the manufacturer will say that the government has "approved" the design, and that it shouldn't be subject to litigation if the design proves faulty, regardless whether the design failure involves exploding gas tanks, failing seat belts ( see our litigation against GM about this Farnsworth v. General Motors), or vehicle rollovers.

The lesson for the class today involves roof crush. Follow the links below, and you will see video footage demonstrating that the federal roof strength standard will not protect vehicle occupants. Passengers who sustain these injuries often face the horrific consequences of brain injuries, spinal cord injuries, or death. Should the injured passenger's claim be preempted by federal regulation when it is patently clear that rollover accidents are foreseeable and that manfuacturers can design a vehicle to withstand them? (Remember that this legal sea change was brought to you by politicians pledging to keep the government out of your business and to maximize states rights against the overreaching urges of the federal government...)

Sources:

Multiple documents and video:
http://www.citizen.org/pressroom/release.cfm?ID=2728

http://www.newmediamill.com/webcasts/cas/20080909/

http://www.citizen.org/autosafety/rollover/crashwrth_/articles.cfm?ID=17995

Alaska is the only state where the party that prevails in litigation is regularly entitled to recover partial attorney fees and litigation costs from the losing side. For an injured individual, this can mean that a major portion of their attorney fees and costs will effectively be paid by the defendant at the end of the case. Personal injury plaintiffs often greatly benefit from this rule.

Defendants, however, can make use of this rule by making an "offer of judgment." If the injured plaintiff does not obtain a judgment that is at least 95% or more of the defendant's "offer of judgment," the plaintiff has to pay a portion of the defendant's attorney fees and litigation costs.

Evie Rhodes found herself in the latter unhappy situation in an automotive personal injury case recently decided by the Alaska Supreme Court. Rhodes v. Erion. (This case was not handled by the Alaska Personal Injury Law Group.) Erion admitted negligently rear-ending Rhodes' car but disputed the amount of the damages. Erion made an "offer of judgment" of $30,000 early in the case which Rhodes rejected. Rhodes ultimately obtained a judgment against Erion after trial of $27,016 -- only 90% of the $30,000 offer. This meant that Erion, the negligent driver, was now the "prevailing party." The court ordered Rhodes to pay Erion $42,263 in attorney fees, which amount completely offset Rhodes' judgment and left Rhodes owing Erion $17,411. As the Alaska Supreme Court mildly put it, "the result in this case was less than ideal from Rhodes' perspective."

At the Alaska Personal Injury Law Group, we often see clients who greatly benefit from Alaska's unique attorney fee rule. Rhodes v. Erion is a reminder that Alaska's attorney fee rule functions as a litigation "risk multiplier" for both sides.

Alaska Personal Injury Law Group attorneys have waged many legal battles to force Allstate to produce documents that are relevant to insurance "bad faith" claims against the insurer by injured Alaskans. These claims have alleged that Allstate unfairly and unreasonably delayed and "low balled" their personal injury insurance claims. Significantly, the Florida Department of Insurance, Office of Insurance Regulation (OIR) recently suspended Allstate's license to write new insurance in that state because Allstate refused to produce documents requested by the Office of Insurance Regulation (OIR) regarding Allstate's claim practices. That suspension order was recently affirmed by the Florida Court of Appeals, which wrote that "Allstate's willful, indeed potentially criminal, failure to comply with its disclosure obligations has prevented OIR from adequately investigating its reasoned belief that Allstate is systematically defrauding its policyholders." Allstate Floridian, et. al. v. Office of Insurance Regulation, 2008 WL 2048349 (Fla. App., May 14, 2008) Forcing the insurer to produce the relevant documents is key to any successful insurance "bad faith" case. We have often gone back to court repeatedly to ensure that we get the evidence injured insureds need to prove their claim. We are encouraged by the Florida court's firm stance on this issue.

Allstate has finally made public its controversial "McKinsey Documents" which describe the development of its self-described "radical" claims handling program. Allstate made these documents public just days after a Florida court affirmed an order from the Florida Division of Insurance prohibiting Allstate from writing any new business in that state until it produced those documents to the Division of Insurance there. Download file The Alaska Personal Injury Law Group already has a copy of many of the McKinsey Documents, having obtained a court order requiring Allstate to produce them in litigation pending in Alaska. From these documents and other sources, the Alaska Personal Injury Law group is familiar with Allstate's self-described "radical" claims program designed by the international business consulting firm McKinsey & Company. According to Allstate records, this program has generated hundreds of millions of dollars in additional profit for Allstate's shareholders and executives. The program, called Claims Core Process Redesign or "CCPR," had three key components: (1) discouraging claimants from hiring attorneys because McKinsey's extensive closed-claim study showed that represented claimants, even after adjusting for the same type of claim, were paid far more than unrepresented claimants; (2) arbitrarily and systematically depressing claim valuations through a centrally "tuned" claims evaluation computer program with the not-so-friendly name of "Colossus;" and (3) vigorously litigating against claimants who did not submit to Allstate's new arbitrarily-lowered claim valuations (candidly called the "Boxing Gloves" treatment by McKinsey and Allstate, as contrasted with the "Good Hands" treatment given to claimants who agreed to Allstate's valuations). For the last 10 years, Allstate has doggedly refused to produce the McKinsey Documents in cases alleging bad faith claims handling. In the few cases in which courts have ordered Allstate to produce the McKinsey Documents (like one currently being handled by the Alaska Personal Injury Law Group), the court imposed strict confidentially rules based on Allstate's claim that the documents were allegedly important trade secrets. Allstate produced 12,929 pages of McKinsey Documents to the Alaska Personal Injury Law Group under protective order. The Alaska Injury Law Group is now looking forward to using these documents without the burdensome confidentiality restrictions previously advocated by Allstate.

We procrastinate about many important things in our lives…getting our taxes done, having a physical, and putting all the photos in an album, to name a few. So, it is only human to procrastinate about calling an attorney for advice when an accident has occurred in your life. And if the injuries are serious, you have other things to worry about: paying bills, getting the right medical care, and dealing with all the paperwork.

If we had just one piece of advice for you, it would be this: Talk to an attorney sooner rather than later. Here’s why:

1. In Alaska, you have just two years in which to bring a lawsuit if you have been injured because of someone’s negligence. If you don’t file your lawsuit within that time, you will be foreclosed from obtaining any recovery whatsoever.

2. You have to give your attorney time to do the job. When serious injury or death has occurred, the claims need to be properly investigated, and this often takes time, plain and simple. The reason a plane has crashed or a vessel has sunk can only be determined with a thorough investigation, often one that requires the engagement of qualified experts who have to be identified and engaged for the client’s benefit.

3. You can meet and talk with an attorney about your injury case without signing anything or otherwise engaging them. At the Alaska Personal Injury Law Group, we meet with the client, learn about their case, and then investigate it to determine whether we will be able to help them. If we can’t, we’ll help them to find someone who can. But one thing we don’t do is use high pressure tactics to “sign you up”. We recognize that the attorney-client relationship is a trusted one, and we want to be sure that you understand your rights before you proceed with litigation, or with hiring us, for that matter. (And if a lawyer tells you that you have to sign a contract with them before they can talk with you about your claims, you know all you need to know at that point—grab your things and walk out the door.)

4. Important evidence can be lost. Your memory, and that of important witnesses, is fresher and more accurate right after any injury than it will be two years later. Accident scenes and vehicle damage are repaired. Sutures are taken out and casts removed. If we can be involved in the early stages of a client’s recovery, we can help them preserve critical evidence that will later prove to be essential to whether or not they ultimately prevail in their case.

These are just a few of the many reasons why you shouldn’t procrastinate when a serious injury or death has occurred. Get an attorney with the necessary legal skills involved early on to help you. If you contact us, we will give you the help you need, or we will help you find someone who can.

The insured received serious personal injuries while riding in a car that was struck by another motor vehicle. She settled with Safeco, the insurance company of the negligent driver, for the facial policy limits of $50,000, without payment of any add-ons for interest or attorney fees. She then made a claim for her uncompensated damages under the underinsured motorist (UIM) coverage of her own policies with Allstate. After hearing all the evidence, the arbitrators found her damages to be $118,432.

A primary issue on appeal was whether Allstate was entitled to an offset of the $50,000 paid by Safeco. The Supreme Court ruled that Allstate was entitled to such an offset even though Allstate had not pled or otherwise asserted the right to an offset to the arbitrators. The offset was deemed proper based on the language of the Alaska statutes, the purpose of UIM coverage, and the terms of the Allstate policy.

A second issue was whether Allstate had to pay interest and attorney fees on the entire $118, 432, which included $50,000 of the insured’s damages that had been paid by Safeco. The Court ruled that Allstate did not; because these amounts could have been recovered under the Safeco policy, the insured was not "underinsured" as to those amounts. The Court thus created a crucial distinction in underinsured motorist claims. It reaffirmed the rule of the earlier Coughlin case that if a person obtains the policy limits of the adverse driver, they have exhausted that policy for purposes of qualifying to bring a claim for underinsured motorist coverage against their own insurance company, even though they did not obtain the add-ons available under that policy. But because they could have pursued the add-ons under the first policy, their claim for add-ons to the amount paid under the first policy is not a proper element of the subsequent UIM claim. Sidney v. Allstate Insurance Company, Opinion 6220, January 11, 2008.

On Saturday, January 12, 2008, two Alaska Native leaders and their 16-year-old granddaughter were killed in a three-car collision on the Glenn Highway. Allan and Sophia Chase, and Melissa Pike were struck when a Chevrolet truck crossed the center line and sideswiped their vehicle, which caused their vehicle to hit a third vehicle driven by John Lavarnway. Lavarnway and his wife, Mary, were injured in the crash. The driver of the pickup, Joshua Swigart, and his passenger, Erin Guhl, were not injured. Troopers are investigating why the pickup crossed the center line, and no charges have yet been filed.

Allan Chase was a former board member of Cook Inlet Regional, Inc., an Alaska Native corporation based in Anchorage. Sophia Chase was on the board of Southcentral Foundation, a Native health organization affiliated with CIRI.

Source: Anchorage Daily News, January 13, 2008.