A lawsuit against Progressive Casualty Insurance that alleges the company failed to settle a claim on behalf of one its clients and breached its fiduciary duty is moving forward.
Senior U.S. Judge Nanette Laughrey of the Western District of Missouri denied a motion put forth by Progressive to dismiss the case, saying the company did in fact provide the plaintiff that sued its client with information that diluted its client's bargaining power and led to higher damages.
In June of 2015, Progressive's client, Tom Devore, who owned a tow-truck company, was dispatched to Highway 63 in Boone County to remove a disabled vehicle.
While trying to execute a three-point turn with the disabled vehicle attached on the U.S. 63 highway, Mallory Embree was proceeding northbound when her vehicle struck the disabled vehicle attached to Devore’s truck.
As a result, a passenger in Embree’s vehicle, Alexander Wiesner, suffered life-threatening injuries and was rushed to the hospital to undergo surgery to repair his torn aorta and nasal bone fractures.
The highway patrol officer who responded to the collision noted that Devore’s improper turn and improper lane usage were contributing causes of the accident, but noted no contributing causes on the part of Embree.
Progressive insured Devore and his tow truck company under a policy of automobile liability insurance with a combined single limit of $300,000.
On July 11, 2014, Wiesner, who suffered life-threatening injuries, notified Progressive that he would be asserting a claim against Devore and requested that Progressive pay the policy limit in settlement on Devore’s behalf no later than July 21, 2014.
Progressive did not accept that settlement offer or respond with a different offer.
On July 23, 2014, Wiesner filed suit against Devore and Embree, claiming that Devore’s and Embree’s negligence caused him massive heart and body trauma and physical and emotional suffering.
“It’s a big case ... It will bring big money in," Progressive’s claims adjuster told Wiesner’s attorney the same day, according to court documents. "That should make you smile.”
The same claims adjuster, according to court documents, had texted Wiesner’s attorney the prior week that she was his “favorite” because she “give[s] [him] money.”
By Jan. 15, 2015, Progressive’s investigation had allegedly revealed that Devore was responsible for the collision and it knew that Devore faced the possibility of an excess judgment.
By Feb. 3, 2015, Wiesner’s medical bills for injuries caused in the collision exceeded $250,000.
However, even after these dates, Progressive rejected Wiesner’s counsel’s offer to settle the claim at the policy limit and instead offered only sums ranging from $91,650 to $150,000.
Ultimately, judgment was entered against Devore in the amount of nearly $794,000, which exceeded the policy limit by nearly $494,000.
Of the two counts Devore brought forth against Progressive, Judge Laughrey focused on breach of fiduciary duty.
In her ruling, she stated that what Progressive's claims adjuster told Wiesner's attorney essentially led Wiesner's attorney to believe they could get a higher damage amount than the policy limit.
In doing so, the claims adjuster gave away Progressive’s – and therefore Devore’s – bargaining power and led to higher damages than may have been necessary.