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The Dirtiest Insurance Company Trick of All

September 17, 2009 by Steven M. Gursten

Would we ever let a lawyer stand up in court and knowingly and intentionally mislead a jury?

Yes. It happens all the time.

And unfortunately, it just happened again.

Farm Bureau Insurance recently forced Michigan Auto Law to try a serious auto accident injury case in Lenawee County, Mich.

The defendant was an 18-year-old girl. Of course, she wasn’t the real defendant.

The real defendant was Farm Bureau. Our client, Douglas Mayher, was seriously injured when the reckless teenager slammed into his Yukon while she was speeding illegally on the dirt shoulder to avoid waiting a few extra seconds for traffic to clear. Mr. Mayher had to be pulled out of his vehicle by the Jaws of Life and was transported by helicopter to the hospital. He suffered a serious traumatic brain injury and shoulder injuries. Additionally, he developed severe chronic pain in his leg, and chronic fatigue.

Farm Bureau insured the vehicle the girl was driving. Despite the obvious seriousness of the injuries, the adjuster, Doris Keefer, refused to make any meaningful attempts to settle this case.

Why Farm Bureau Wouldn’t Settle

Why would an insurance company, in a very serious injury case — where everyone agrees the teenager who caused the crash acted recklessly and foolishly — refuse to make any meaningful attempts to settle and force a case to trial?

Because, there’s a federal rule of evidence that’s been adopted by almost all states, that says juries cannot be informed whether a defendant in a lawsuit has insurance, or that an insurance company will be paying the verdict. Therefore, juries are left to presume that it’s an individual, uninsured defendant who will be paying any verdict in a personal injury case.

The supposed public policy behind the rule is that telling a jury a defendant has insurance will result in higher verdicts, which is unfair to insurance companies.

But in this case, Farm Bureau made an intentional calculation that turns the public policy of not telling juries about the existence of insurance on its head. Farm Bureau forced this catastrophic injury case to trial, knowing the jury would not be told the teenage driver was insured, let alone that her insurance policy was substantial.

In turn, Farm Bureau, its adjuster and defense lawyers led a jury to believe the teenage driver was the one who would be paying up; simply taking the attitude that a jury would never return a significant verdict, because it would feel sorry for her or think she would never be able to pay a substantial verdict.

Keep in mind the teenage driver served 30 days in jail for felony reckless driving. But that was not disclosed to the jury either.

Farm Bureau: Take It or Leave It

Farm Bureau used the evidentiary rule about insurance as a shield to hide behind, and as a sword to intentionally deprive our client of the full measure of his damages.

And there is something very wrong with that — especially since this is a defense tactic that is commonly used in courtrooms across the United States.

Specifically, Farm Bureau and company were actually depending upon this jury improperly using unfair outside considerations — such as the obvious inability of the teenage girl to pay any substantial verdict — to deliberately avoid responsibility for a catastrophic injury accident its own insured had caused. The insurance company wasn’t just depending on improper considerations by the jury; it was counting on it.

And this colored everything the defendant — the real defendant, that is — did to resolve the case. The settlement offer was only a paltry $100,000. The Farm Bureau insurance policy limits were substantially higher than this amount. But the adjuster and defense lawyers believed it was impossible a jury would award more than this, no matter how serious the injuries, because they were going to be looking at a teenager throughout the trial, wondering how she would ever pay.

Their attitude toward our client was, “Take it or leave it. You will probably get less.”

Thankfully, at least this time, the jury was not fooled by this insurance company tactic. On Sept. 15, the jury returned a verdict of more than $2 million to protect and provide for the Mayher family.

The Rule Needs Revising

I’ve been trying auto accident cases throughout Michigan for 15 years now. I personally feel what Farm Bureau did in this case was morally wrong, and I am offended.

The public policy behind the tactic that allows insurance companies to deliberately pervert a rule of evidence that’s meant to ensure fairness for both parties needs to be re-examined.

It is time to ask: How we can let a rule be deliberately misused to rob one side of its one and only chance for a fair trial and just verdict?

It is time to think perhaps less about protecting insurance companies, which after all are paid handsomely for many years to protect their insureds in the event someone does cause a car crash; and consider how insurance companies are deliberately perverting this rule of evidence.

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7 Replies to “The Dirtiest Insurance Company Trick of All”

  1. This is why Michigan in known in the insurance business as the TBI Capital of America. I have never seen nothing like it.

    I am all for paying legitimately injured claimants and it is everyone’s duty to do so, but when it is turned into a money making business, it hurts everybody.

    So Michiganers, the people sucking the life out of what started as a program to help injured people in auto accident are truly what hurts legitimate claims. It also hurts you in your pocketbooks with your gigantic premiums you have to pay for PIP. You guys need PIP REFORM NOW!! Like a great check and balance and the Motorcycle thing, no wonder that poor guy in the last article was so upset. If a motorcycle ran into the back of me and through no fault of my own, my policy has to pay him IS COMPLETELY EGREGIOUS to the law abiding citizens of Michigan. Ouch!

  2. I WAS 24YR WHEN I HAD A DISAGREEMENT WITH A YOUNG WOMEN.AFTER I HAD TURNED MY BACK SHE STRUCK ME WITH HER SUV.IT DOESNT STOP THERE SHE THEN DRUG ME 35FT HIT A PARKED TRUCK AND THEN RAN ME OVER THREE TIMES.MY FRIEND HAD CALLED 911 DIFFERENT TIMES AS THIS WAS GOING ON.IT TOOK THE POLICE ALMOST AHOUR TO GET THERE.WHEN SHE SEEN THEM COMING SHE RAN ME OVER FOR THE LAST TIME AND RAN A STOP SIGN IN FRONT OF THE POLICE.NOT EVEN ONE POLICE TRYD TO GO AFTER HER.THEN IT TOOK ANOTHER 20 MINS FOR THE EMT TO GET THERE.THEY HAD TOLD MY FRIEND SHE HAD TO REQUEST FOR THE EMT. TO COME OUT.WHAT IS THE POINT TO EVEN CALL 911 IF THAT IS THE CASE.I HAD MANY INJURIOUS FROM THIS.THE GIRL GOT 3YRS FOR TAKING MY LIFE FROM ME.SHE ONLY HAD 20]40 SO THE FIRST LAWYER TOLD ME TAKE IT OR I WOULDNT GET ANYTHING.IM NOW FACE THE HARDS THING EVER THE INSURNCE COMPANY DOESNT WANT TO PAY MY BILLS OR NEEDS ANY LONGER CAUSE IM NOT GETTING BETTER.I HAVE MANY DOCTOR ORDERS THAT ARE NOT BEING MET BECAUSE OF THIS.I DONT KNOW WHAT TO DO.I KNOW HAVE A NEW LAWYER ON THE CASE BUT SO MUCH TIME IS STILL GOIN BY AND OF COURSE NOTHING.IM THE VICTIM BUT YET IM GETTING TREATED LIKE I AM THE ONE WHO TOOK MY LIFE FROM ME IT NOT RIGHT THAT THE CAN GET AWAY WITH WHAT THEY DO.PLEASE HELP I WOULD LIKE TO GET IN MORE DETAILS ON WHAT IS GOING ON AND HAPPEND.

  3. I have to disagree with your assessment of this case, at least as it’s recounted, in a couple of ways.

    First, the “real” defendant in this case was, most certainly, the teenage girl. Individuals bear their own responsibilities. Individuals enlist the services of insurance companies to cover losses for which they become legally responsible.

    Second, I don’t see how this law was misused. I support regulations like this. Juries should never take the depth of a defendant’s or, for that matter, a plaintiff’s pockets into consideration when determining judgments or judgment awards.

    It seems that we’ve all forgotten that when an insurance company is involved, it’s not just a faceless corporation, it’s every individual policy holder, that’s at risk.

  4. I have to agree with Phil. This is NOT a case of turning the law on its head, but is an example of the law working exactly as it is intended.

    It is the desire of litigators to inform juries that the defendants won’t really be paying, and that an insurance company will pick up the bill, in order to increase the amount of the judgments.

  5. I certainly appreciate your comments, and I thank you for emailing them to me. I also certainly understand where you are coming from and there will be many who agree with you. I do respectfully wonder however, if you would feel the same way if the insurance company had pulled the same trick on you if you had been catastrophically injured, or if this had happened to someone you love. The idea of an insurance company deliberately parading a penniless teenage girl in front of a jury every day to engage in a charade that she will be personally ruined by a verdict and to improperly encourage people sitting on a jury to feel sorry for her and speculate on her ability to pay is repugnant to many, including myself. There is however, another way. There is a new idea out there – one that juries and the people who sit on them are sophisticated enough to be told that there is insurance involved, and who can then be trusted to not lose all self-control and still be able to render a fair and just verdict based upon the evidence. This is the idea behind a growing trend in some progressive jurisdictions across America. It started several years ago in Alaska. It is starting to gain momentum. The principle is that people who sit on juries can be told there is insurance involved in a case but that they as a jury are then not to consider it when reaching a verdict. The idea behind this is that it allows juries to then focus on their real job – to determine the appropriate amount of compensation without worrying or improperly being urged to speculate about whether there is or is not insurance or about the ability of a defendant to pay. I certainly think it is an idea that has considerable merit, and is more fair to both plaintiffs and defendants than the current way we do things in Michigan.

  6. Do you also consider it as morally reprehensible to take 10 to 35% of the court judgement as a commission of the verdict?

    I didn’t think so.

    You have a job in the process as does the insurance company.

    Your clients catastrophic injuries will be paid for under MCCA for decades to follow, so the judgement will be there, less your fees/commissions/etc, to pay for the non-medical costs damages.

    Had this at fault party had 20/40 or 50/100 like many, many Michigan residents do, you wouldn’t have never been talking about this. However, because this carriers agent & the company had written more adequate levels, you were salivating. Lets be honest.

  7. Jim, I can tell you don’t like lawyers, but you are very mistaken in each of your comments.

    Do you believe a lawyer must advance all costs but work for free? Most injured people out there do not have the money and financial resources to front the litigation and expert costs of a case, and then to pay an experienced and competent attorney’s hourly rate for 3 years. That is why we have a contingent fee – to provide access to the courts and justice to people who otherwise couldn’t afford a lawyer.

    Now, the rest of your comment is just factually wrong. The insurance companies will likely have some type of cap and ceiling in place – whether it be HB 4936 or a modified version – and catastrophically injured accident victims will not have the MCCA in the future. They will be personally bankrupted and likely forced onto Medicaid. Also, there are no fees/commissions on this. I have no idea what you mean, but medical and provider payouts are not subject to “fees/commissions” as you erroneously write.

    Finally, you are just dead wrong on the insurance policy limits. I’ve been helping people who are seriously hurt by people with low policy limits my entire career. I also volunteer dozens of hours every year pro bono to helping the families of wrongful death victims. Pro bono means I do not get paid. I think you would probably call that the opposite of salivating?

    Now, aside from what is probably a poorly thought through jab at lawyers, together with stereotypical comments about lawyers in general, you actually raise an important issue: have you ever wondered why the minimum insurance policy limits in this state are still set at 20/40 – and how does that protect people in this state? These were the limits originally set in 1973, and they were never raised or indexed to inflation. So in a state where the insurance companies make more profits than in any other state, on a product (No-Fault insurance) that we are required by law to purchase, the reality is that most people are grotesquely underinsured and at terrible risk. After all, $20,000 in 1973 is worth just over $6,000 in today’s dollars. So instead of a silly and ill-considered comment about “salivating” lawyers, maybe we’d be better served increasing the minimum policy limits or educating consumers about underinsurance so that they could be better protected.

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