QuestionMy father-in-law passed away due to multiple injuries he suffered from an auto accident. He was crossing on the green light when a SUV driver turned left on a busy street and hit him. The driver acknowledged her fault and there were 2 witnesses according to the police report.
My lawyer contacted my mother-in-law this afternoon and told her that the insurance the driver carries has only $50,000/$100,000 so the max amount of compensation she can expect is $100,000 less his legal fees.
Is he out of his mind? A person died due to the driver's fault. My mother-in-law lost her husband of 45 years and now she has to worry about how she can support herself?
The driver has 2010 Mazda SUV and insured through Progressive.
My wife is so upset that she cannot even eat or sleep. Can there be something we can do to make the insurance company be more responsible in this case?
Thank you for your help in advance.
AnswerHi Joonsup,
I am sorry that your family has suffered this terrible tragedy. There is no amount of money that can replace this man and what he meant to his family. But we do use the poor substitute of money to compensate for the losses we suffer.
What I have to report to you may not be what you want to hear, so I hope that in your feedback to this forum you do not "shoot the messenger" by giving my answers a low grade. The situation is what it is, and the outcome will not be as favorable to your mother-in-law as you would like.
Because of this being such a serious tragedy, and the poor position your attorney has put your mother-in-law in, I am going to give you well over an hour of my time trying to explain things so you can get some cash from the attorney's fees.
For starters, Joonsup, let's look at the only sources of money for your mother-in-law. Here are the only places that I can think of that will yield some money to her. I will go over these in detail for you below.
• The tortfeasor's policy limits;
• The tortfeasor's assets above those which are exempt in bankruptcy and not otherwise secured;
• A second tortfeasor;
• Her own underinsured motorist coverage (UIM);
• Reduction in attorney's fees;
• Reduction in any subrogation owning;
• The decedent's own life insurance.
Now I will discuss all of these and answer your questions. Your recitation raises six separate issues, only two of which you have asked about. So let's take the two that you touch upon in your question, and I will save my four issues for later.
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#1. Duty of Tortfeasor's Insurance Company
"Can there be something we can do to make the insurance company be more responsible in this case?"
ANSWER: So far as I can tell, the insurer has done an excellent job of fulfilling its duties: it tendered the policy limits without any trouble or having to bring a lawsuit.
There is absolutely no obligation upon the company to pay one dime more than its limits. That is it. The contract is between the insured and his company. There is no additional money source with the tortfeasor's insurance, absent a bad faith claim. Sometimes people suffer bad faith and are able to recover from an insurer, but this case is anything but bad faith since they tendered their limits up front.
#2. What is your mother-in-law to do for money?
"My mother-in-law lost her husband of 45 years and now she has to worry about how she can support herself?"
Hopefully your in-laws planned for accidents. I will bet that if you discuss it with her, you will help your mother-in-law to recall that they do have underinsured motorist coverage (UIM) and life insurance. The couple's own auto insurance coverage will apply in a pedestrian accident. So second is her own Underinsured Motorist Coverage (UIM) because they have very serious claims (her own claim and the husband's claim via his estate).
One is protecting himself and family with the UIM coverage. The maximum limits of UIM should be the goal, depending upon what one can afford.
Naturally, the best planning for the death of a spouse is to have a substantial life insurance policy to provide for any missing income stream. Hopefully your in-laws took the necessary steps to provide for each other by purchasing life insurance.
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OK, Joonsup, I have answered your questions, so now let me raise four issues of my own.
#3. POLICY LIMITS cases.
Here is an excellent insurance policy limits information page, which will give you a bit of background on how it works. http://www.settlementcentral.com/page0451.htm
What is missing there is a discussion of the choice to forego the limits and sue the tortfeasor and obtain a judgment far in excess of the limits. That choice has to be made after one obtains an asset check on the tortfeasor. Why?
Because the tortfeasor can discharge your judgment in bankruptcy, UNLESS he was committing a crime at the time of the accident. DUI would be an example of that.
So, let's say that you forego the offer of the limits and sue and obtain a judgment versus the tortfeasor of $300,000. He files for bankruptcy to discharge that judgment (i.e. it will be of no effect).
He gets to keep the exempt property, IAW your state laws. This consists of named assets, such as tools of the trade, a vehicle, household goods, a library, clothes, cash, and equity in his home.
Now each of these categories of assets will have a dollar limit to it. For example, your state may exempt $5,000 in value of tools, or $3,000 in cash, or $6,000 in value of vehicle, etc. Your state will also exempt a part of the equity in his home, usually around $40,000.
If he has $100K equity in his home, you get to sell it and take the balance. Same for the vehicle. A $20,000 FMV vehicle will be sold and the exempt part (per your state statute) will be paid to the judgment debtor and the balance the trustee in bankruptcy will pay to you and other creditors.
How in the world can your attorney accept the policy limits until he has done an ASSET CHECK on the tortfeasor? There are plenty of rich people around who drive older vehicles, so he cannot go on the type of vehicle driven.
Anyway, that is something he surely has or will do on his own. But you might at least ask him how the assets of the tortfeasor checked out. BEWARE: most attorneys will try to bluff their way here since they do NOT want to have to bring a lawsuit and then try to collect on the judgment.
FYI, the policy limits will be paid on the judgement. So, assuming your mother-in-law got a $300K judgment, the insurance company has to pay in its $100K. Then you start to garnish his accounts and his wages, and his assets. That is why attorneys want to avoid this kind of work. They want to take the insurance limits and get rid of you and move on to the next case.
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#4. ANY OTHER TORTFEASORS?
You would be amazed at how many times we have blinders on and ignore other possible tortfeasors. The two most common seem to be either a land owner who allowed vegetation or a sign to block traffic view OR a governmental agency for poor roadway design. Chances are real slim in the case you described that there could be another person or entity whose negligence contributed to the accident. But is never hurts to explore the possibility—maybe the crosswalk or signage or lighting was defective. Those are REAL live successful arguments in pedestrian death cases.
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#5. Subrogation
Was there medical insurance or auto insurance that paid some bills and now wants their money back via subrogation?
Here a page to read up on dealing with subrogation. I would try to get your attorney to fight subrogation at NO ADDITIONAL ATTORNEY FEES.
http://www.settlementcentral.com/page0459.htm
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#6. FIGHT ATTORNEY FEES!!
OK, Joonsup, I saved for last the topic that will produce some cash relief for your mother-in-law by denying the attorney anything but a reasonable fee. And that fee is NOT going to be a contingency percentage. Notwithstanding what the contract says.
I surely hope that this attorney is NOT trying to enforce a contractual "right" to a full contingency fee on the $100K offer. WHY?
• FIRST, because that would be an unreasonable fee inasmuch as it was not earned; and
• SECOND, because there are rules in your state governing attorney fees that would prohibit such a fee AND those rules TRUMP the attorney's contract.
What is a life worth when the tortfeasor admits liability?
$50,000 limits could be had by a blind dog with a note in its mouth. True story—ANYONE could write a one page letter and get $50K. So WHY would an attorney be entitled to anything but his hourly rate for whatever work was done to get that first $50K?
Almost the same for the next $50K. This, I take it is for the loss to the wife.
Contingency fees are earned when there is a risk of loss and/or the attorney has to do a lot of work.
I am guessing that this settlement offer was made before much went on in the case. Surely there was no lawsuit or thru discovery the attorney would have told you about the limits long ago. Or would he??
It is a common practice for attorneys to hide the defendant's policy limits from their client whilst they do all kinds of busy work, hoping that the client will think that their efforts were necessary to make a recovery. THAT IS NOT TRUE in many policy limits cases.
Your state bar association http://www.settlementcentral.com/links.php will NOT PERMIT A FULL FEE in such a case. The bar has issued Rules for Professional Conduct and RPC 1.5 governs attorney fees and IT TRUMPS YOUR ATTORNEY'S CONTRACT.
TO ACHIEVE A FAIR AND REASONABLE PERSONAL INJURY ATTORNEY FEE, LEARN AND CITE your State Rules of Professional Conduct REGARDING REASONABLE LEGAL FEES. Your State Bar Association http://www.settlementcentral.com/links.php can help you with this, and I would not hesitate to contact them ASAP.
NO MATTER WHAT YOUR FEE AGREEMENT SAYS, YOUR STATE BAR ASSOCIATION IS NOT GOING TO LET YOUR ATTORNEY ABUSE YOU BY TAKING A FEE HIGHLY DISPROPORTIONATE TO THE WORK INVOLVED!
Here is the guidance direct from the site of the Washington State Bar Association, one of the leading institutions of its kind in the nation. www.wsba.org. This is for illustrative purposes, but your State Bar Association will likely have the same or similar content.
Factors in Determining Reasonable Legal Fees (NOTE, MY COMMENTS WILL BE IN CAPS FOLLOWING CERTAIN FACTORS)
There are a number of factors involved in establishing a reasonable legal fee according to the Rules of Professional Conduct for lawyers. They include:
1. the time and labor required, (HOW MANY HOURS SHOULD IT HAVE TAKEN TO DO WHATEVER IT IS HE DID?)
2. the novelty and difficulty of the questions involved, (SIMPLE TASKS HERE?)
3. the skill required to perform the legal service, (MINIMAL?)
4. the terms of any fee agreement between the lawyer and the client,
5. the fee customarily charged locally for similar legal services,
6. the likelihood, if clear to the client, that the acceptance of the particular employment will preclude the lawyer from accepting other employment;
7. the amount involved and the results obtained, (COULD THE SAME RESULTS HAVE BEEN "ACHIEVED" BY A BLIND DOG WITH A DEMAND LETTER IN HIS MOUTH?)
8. the time limitations imposed by the client or the circumstances;
9. the nature and length of the professional relationship with the client;
10. the experience, reputation, and ability of the lawyer, and
11. whether the fee agreement or any confirming writing demonstrates that the client received a reasonable and fair disclosure of material elements of the fee agreement and the lawyer's billing practices.
These, or very similar rules have been adopted by your own State Supreme Court, and your own State Bar Association does a service to the public by providing both access to the rules AND two forums for clients to enforce them versus their attorneys regarding fee disputes.
Note that this is NOT just something that the attorney may or may not agree with: HE IS DUTY-BOUND TO COMPLY WITH THESE RULES. The preamble to the rules states as follows:
”The Rules of Professional Conduct are MANDATORY in character. The rules state the minimum level of conduct below which no lawyer can fall without being subject to disciplinary action."
So, what to do? I would ask about some of the topics raised here, such as the asset check. Be advised that he will fight against bringing a lawsuit since that is work and takes time to get the judgment amount in excess of the policy limits collected AND he does NOT want that kind of work. He wants to get paid and get rid of you and quickly on to the next case. Remind him that he was hired to pursue the tortfeasor, NOT to just pick the low-lying fruit—anyone could do that.
I would not shy away from getting a second opinion. That is another thing that may bring the attorney to realize that he cannot charge a full contingency fee in this case.
That is about is, Joonsup. I trust that my extra time here has produced some information that has been of value to you, and thus I would respectfully request that you take the time to locate the FEEDBACK FORM on this site and leave some feedback for me.
Best Wishes,
Dr. Settlement, J.D. (Juris Doctor)
http://www.SettlementCentral.Com
