The attorneys for a wife awarded $10 million after being injured in her husband’s fatal crash sent a $1 million pre-suit settlement offer to the insurer but the insurance company allowed it to expire.
“This happens all too often as evidenced by the plethora of state statutes designed to address bad faith insurance practices,” said Nicole Clark, business and litigation attorney and founder of Trellis Law.
A 63-year-old Arkansas woman was a passenger in her husband’s tractor-trailer when a truck crashed after crossing a road island in a Kansas county.
Clark
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While her husband died, the wife survived but with orthopedic and brain injuries.
She is represented by JJ Burns and Josh Becker of Dollar, Burns, Becker & Hershewe in Kansas City.
“Allowing a pre-settlement offer to expire without making an offer can be an innocent mistake however, it can also be a stalling tactic for an insurer especially if the insurance company thinks a plaintiff is unlikely to escalate the matter through costly litigation,” Clark told the St. Louis Record.
As previously reported in Missouri Lawyers Media, the complaint was filed against her husband’s estate followed by a non-execution agreement, which lead to arbitration.
It was the husband’s commercial insurer that covered his trucking business, which offered her the $10 million settlement.
“As a tactic, this comes with its own uncertainties, its own risks,” Clark said in an interview. “This is especially true if the defendant, which in this case is the husband’s estate, enters into a non-execution agreement with the plaintiff.”
The insurer was required to cover the driver's wife pursuant to U.S. Department of Transportation and Federal Motor Carrier Safety Administration regulations regarding the transportation of unauthorized passengers.
These regulations state that drivers must receive written authorization from their employer to carry additional passengers along with information about that passenger and their journey, according to Clark.
"If a passenger is injured, the motor carrier’s liability insurance is typically responsible for paying out the claim even if the accident was caused by the driver’s negligence," she said. "This is why in the trucking industry, the authorization of passengers is sometimes treated as a perk for safe drivers."
A non-execution agreement is a contract in which a defendant admits to liability, and a plaintiff agrees to not seek a judgment against the defendant based on that admission.
“Non-execution agreements are often used by policyholders as a way to mediate between a plaintiff and an unresponsive insurance company,” Clark added. “By stipulating to some or all of the allegations in the wife’s personal injury lawsuit, the late husband’s estate can voluntarily settle with the wife, assigning to the wife rights to recover for her losses under the relevant insurance policy. In return, the wife can sue the uncooperative insurance company for those damages, which shifts the focus from the husband’s estate to the insurance company.”