Limited Insurance Proceeds

January 5, 2013

Crash (2 vehicles).jpgI've had a few sad cases recently. In each case, my client was injured in an accident. In each accident, there were other people injured, as well. My clients went to the hospital, and were treated for their injuries. Neither of my clients had health insurance. Neither of them had UM/UIM insurance (neither of them drove a car, and neither lived with a family member who drove a car).

After they finished medical treatment, we sent demand letters to the insurance companies. In each case, the adjuster informed us that they could not settle our claims because there were limited insurance proceeds available, and that other victims were either still treating or hadn't submitted their demand packages, yet. The limited insurance proceeds were in compliance with the Maryland minimums--$30,000/$60,000. That means that the most any one person in an accident can recover is $30,000, with the total allowed for all people in a single accident as $60,000.

So, not wanting to wait, we filed lawsuits. Other victims of each collision did, as well (though not all). When it was time for the insurance company to answer the complaint in one case, and when their discovery responses were overdue in another, they cried "uncle." They tendered policy limits in each, and washed their hands of the whole matter saying "you plaintiffs divide it up."

So we did in one case (the other case we're still working on). For the one that fully resolved, my client received something along the lines of 60% of her medical expenses. There were too many other victims, many of them with injuries far more serious than my client's. We were able to get other medical expenses reduced, and thankfully there was Personal Injury Protection (PIP) available, so my client had a little bit of a take-home. But, it wasn't what it should have been. And sadly, there was no other source of recovery--no UM/UIM, and no chance at recovering personal assets of the defendant driver.

So how do you divide up limited insurance proceeds with other claimants? It's tough, because the process pits a plaintiff's lawyer against other plaintiff's lawyers, and we usually like to be on the same side. However, we must each zealously advocate for our clients. These are some considerations if you ever find yourself in the same boat:


  • Perhaps the simplest way is for each automobile accident victim to get a pro rata share of the proceeds based on total medical expenses. So, if the total insurance available is $60,000, the total of all medical expenses is $100,000, and your client had $20,000 in medical expenses, your client would get total of $12,000. ($100,000/$20,000 = 20%; 20% x $60,000 = $12,000). This method has some appeal--it is completely objective, and there is no need to compare amounts of non-economic damages (pain, suffering, inconvenience, etc...).

  • For cases that warrant the expense, a mediator or arbitrator (often a retired judge) can be brought in to help settle the matter.

  • Another method is to allow the court to decide--everyone files a lawsuit, the cases are consolidated, the defendant admits liability, and the judge or jury decides what everyone gets. Or, the defendant could place the money into the court with an interpleader action, basically inviting all of the plaintiffs to come to court and fight it out.

  • One particular consideration should be other means of recourse. Some accident victims may have UM/UIM insurance coverage available--meaning that they are more likely to be able to recoup their losses elsewhere. Lawyers who have access to other potential sources of recovery may be hesitant to take a discount on the first part of the case, though, until they have some assurance about what they can indeed recover from the UM/UIM insurance company.

In any event, everyone is going to end up with less than they deserve. This is one reason why it pays to have good UM/UIM insurance. We recommend everyone get as much as they reasonably can afford. The increase in premiums isn't significant, and $100,000 is the bare minimum. We highly recommend more.

Do you owe more on your car than it's worth?

January 1, 2013

Total Loss (11-26-11).jpgOur usual recommendation to people is that when they lease a car, purchase GAP (Guaranteed Auto Protection) insurance. GAP insurance makes up the difference between fair market value of a car and what you owe on the car (the second figure is sometimes higher). This type of insurance is important because in an accident, you are only entitled to the fair market value of the car. The trap is that if you owe more than the Maryland property damage settlement amount, then you certainly won't have enough money to buy or lease a or new car. Then, you end up renting a car for far too long (which you won't get completely paid back, either). It's a terrible cycle of debt, and hard to get out of.

Now, some people will have another option (which they rightfully expected to have in the first place). The Daily Record wrote up an article, 4th Circuit Backs Consumers Whose Cars Are Totaled which outlined a new decision in Decohen v. Capital One. There, a consumer leased a used car. The lease included a debt cancellation agreement. Unlike insurance, debt cancellation agreements are not regulated by the Maryland Insurance Administration. It is simply an agreement between the lender and the person leasing the car that, if there is a problem, the most they will owe is the fair market value of the car. The lender simply forgives any excess owed. In exchange for this benefit, the consumer pays a little extra. In Mr. Decohen's case, he paid $600 extra for this added security.

Unfortunately for Mr. Decohen, the lender sold his account to Capital One (play Imperial Death March here) who decided to fight Mr. Decohen. Their argument is long and convoluted, but suffice to say that the evil bank argued that federal banking regulation override Maryland state law. Maryland's consumer-oriented laws were somewhat more favorable than the actual contract. The contract stated that the difference between the fair market value and another value would be cancelled. That other value was the larger of (a) cash paid by an insurance company; (b) the NADA value; or (c) the Kelley Blue Book value. Maryland law only permits (a) the cash paid by the insurance company. In Mr. Decohen's case, the bank argued that it didn't have to cancel the debt because the actual value of the car (it claimed) was higher than what the insurance company paid for it.

In Mr. Decohen's case, the consumer victory is grounded in the fact that the loan was assigned to a national bank. Had the loan (with the really bad language) been kept by the lender, the result may have been different.

The lesson for Maryland consumers who lease a vehicle is clear--if you are going to rely on a debt cancellation agreement, you should carefully read the contract and make sure that, under any scenario, you will not have to pay more than the insurance company pays you if the car is totaled. It might be better to simply get GAP insurance from your insurance agent. If you have questions, contact us.

More Maryland Automobile Accident Information

Spying on Texting Drivers

October 17, 2012

Text Distracted Driving.jpgThe Federal government wants to know whether you've been texting and driving. They have authorized grants to two states, Connecticut and Massachusetts, for anti-texting enforcement programs. Each state will get $275,000.00.

This money will be used to train police officers on how to detect texters--not only from their patrol cars, but from highway overpasses and more covert locations. I'm not sure how this will work, exactly. One police officer on a bridge, watching traffic come toward him. That officer radios to another officer on the road below, and tells him which car to pull over. Maybe it's as simple as that.

One thing is for sure--some people who flaunt Maryland's cell phone use laws are getting crafty--many keep the phones down below window-level to avoid police detection. Of course, that makes it harder to see the road, which is more likely to cause crashes.

Maryland automobile accident lawyers should have an arsenal of discovery ready to determine when illegal cell phone use may have contributed to an accident. In some cases, this involves written questions, requests for production of cell phone records, and subpoenas to cell phone companies.

See the U.S. Department of Transportation's press release and Ray LaHood's blog.

How Much Will Maryland Save With Scooter Helmet Law?

October 3, 2012

50cc scooter.jpgWe posted recently about the new law requiring moped and scooter riders to wear helmets, procure insurance and have their vehicles titled (Maryland Helmet Law Now Extends to Scooters). An interesting question is what this will do for Maryland's finances?

One article cites that there are 3,500 scooters in Maryland--with a price tag of $25 for the title and decal, that means the state should get about $194,000 in net revenue.

But wait, there's more! The requirement to wear a helmet means that some injuries will be prevented entirely, and others will be less serious. It is estimated that it will save Medicaid $120,000.00 per year. That's money that they won't have to spend on serious, long-term care of people who were injured. Though, one wonders if there might in fact be more injuries--a rider without a helmet might be killed, though a rider with a helmet in the same accident might have a severe and permanent brain injury. It's hard to know where these estimates come from. Only time will tell, and that's only if someone comes in and analyzes the data.

Maryland Helmet Law Now Extends to Scooters

October 1, 2012

50cc scooter.jpgEffective today, moped and scooter riders must wear helmets.

Maryland has proudly required motorcyclists to wear helmets since 1992 (though, the law is not without its detractors, who try to repeal it at every opportunity).

This makes sense, of course: we require seatbelts, carseats and booster seats in cars, and the occupants there have two tons of steel to protect them other vehicles, trees, and the roadway. In a motorcycle accident, the sheer size and weight of any vehicle, compared to the slight size and weight of a motorcycle, can cause terrible injuries in what would otherwise be a minor impact. Motorcyclists are easily ejected from their bikes, and suffer a range of serious and permanent head injuries, if not death. There seems to me to be little difference between a motorcycle and a scooter or moped.

The new law also requires that mopeds and scooters be titled and insured. This brings motor scooters and mopeds one step closer to cars--in most respects, they are treated like bicycles.

In a motorcycle accident, and a moped or scooter accident, we argue that a rider's failure to wear a helmet is inadmissible. The rule in Maryland for car accidents is that non-use of seatbelts are inadmissible. The theory is that, if the negligence of the defendant caused the automobile accident, then the fact that a seatbelt/helmet was not used is basically irrelevant. Furthermore, we don't want judges or juries blaming the victim for his injuries, when they are primarily caused by the defendant driver. Of course, we'd be happier if all riders would just wear helmets. If it means fewer lawsuits, so be it.

Pedestrian Deaths in Maryland

September 27, 2012

Lahood Text.jpgOftentimes, pedestrian-versus-car accident cases are among the toughest to litigate. It's rare that we see that perfect liability scenario:

The pedestrian, observed by traffic cameras, dutifully waited her turn to cross from one end of the street to the other. The approaching traffic stopped, she got the white "walking man" signal, and after looking both ways, she proceeded across the cross walk to the other end. At that point, the independent and disinterested witness observed, the defendant ran the red light at twice the speed limit, hitting the pedestrian."

What we usually see is something like this:

The pedestrian, unobserved by anyone or anything, was crossing the road in the middle of the street, about 20 yards from the crosswalk. He said there was no traffic approaching at the time. When he was about 2 feet from the opposite curb, he felt the impact from a vehicle that "just came out of nowhere." Of course, he was listening to iPod at the time of the collision.

The reality is, in a state like Maryland where contributory negligence is the order of the day, plaintiff pedestrians probably lose 75% of the time (yes, this is a completely off-the-cuff and made-up-on-the-spot statistic). And, lawyers won't even take the really unlikely case. Contributory negligence is the rule that says, even if the defendant driver is 99.99% negligent, a plaintiff must lose his entire case if he is 0.01% negligent (we're hoping the Court of Appeals might change this arcane rule of law soon).

U.S. Secretary of Transportation Ray LaHood said recently that 80% of pedestrian deaths in 2010 were due to jaywalking. A little research indicates that 79% of pedestrian deaths were at "non-intersections." Not quite the same as jaywalking, and not quite the same as "caused by." As the article states, sometimes there is no crosswalk anywhere in the area; sometimes cars jump curbs and kill people at "non-intersections."

Of course, this is all largely irrelevant. The important point that Lahood wanted to make is that pedestrians should pay attention to traffic, not their cell phones, when crossing the street. Surely that's going to save a couple of lives.

Proving The Defendant Was Texting While Driving

August 24, 2012

Txting Drvng Reaper.jpgWith so many accidents caused by distracted driving, it's a fair bet that, in any given accident, the negligent driver was on a handheld phone or handling e-mail or text messages while driving. In many cases, that fact is not important: if the defendant admits liability, or if liability is clear (for example, the garden variety rear-end collision).

In other cases, though, proving that the defendant was distracted can go a long way toward showing that their version of events is likely wrong (if not an outright lie). Yesterday I deposed a representative of AT&T to find out everything I could about the phone usage of an automobile accident defendant at the time of the accident.

These types of depositions take a lot of legwork. When I get the transcript, I'll post it on the website. If you have a case where you suspect illegal cell phone use at the time of an accident, here are some things to think about:


  • Even before a lawsuit is filed, immediately send a preservation letter to save any cell phone owned by the defendant, and the content of any text messages on the phone at the time of the accident
  • Find out what cell phone carriers and cell phone numbers the defendant had at the time of the collision
  • Either get the defendant to sign an authorization, or send a subpoena requesting all cell phone records (including voice, data and text messaging records) for the time of the collision
  • Once you have those records, work with the cellphone carrier to set up a corporate designee deposition to decipher what the records mean--they typically come to you in spreadsheet form with various codes and abbreviations
  • During the deposition, identify the meaning of every column and term generically
  • During the deposition, figure out if you can verify whether there was any use of the phone during the collision

AT&T, for example, does not keep records of the content of text messages--they can only tell what time those messages were sent or received (they can't tell what time the messages were read). In a catastrophic injury case, a forensic computer specialist may be able to dissect the phone to determine that type of information. Your best bet is showing a string of text messages back and forth near the time of the accident. Even better is a phone call log. Data usage (Apps, Facebook, internet usage) from a smartphone can be more difficult--many programs run in the background, so the fact that a phone is uploading or downloading data does not mean that someone is actively using the phone.

Finally, be sure to find out in discovery whether the defendant gets e-mail on his phone. If so, request a copy of all e-mail messages sent and received near the time of the accident.

Texting and Driving Infographic

August 23, 2012

Courtesy OnlineSchools.com
Texting Inforgraphic.jpg

$250,000 Per Leg: Texting Motorcycle Accident Case Settles

August 21, 2012

distracted driving accident attorney.jpgThe New Jersey couple who were hit by a texting driver while riding their motorcycle settled their case against the driver for $500,000. Both Mr. and Mrs. Kubert, who were on the motorcycle, lost a leg because of the motorcycle accident.

We wrote about this story in May (Distracted Driving Lawsuits: Suing the Sender, and Lawsuits Against Text-Senders: Conclusion). There, the trial judge ruled that the plaintiffs did not have a case against the person who sent the text message, only the driver who read it. The lawyer in the case is appealing that decision, though I still wonder how he will get paid if he wins.

The $500,000 settlement only applies to the driver of the car. It looks like that is the policy limit, so the driver's insurance paid everything it had.

For more on distracted driving lawsuits, see our archives.

Backlash Against Progressive

August 20, 2012

Progressive HQ.jpgThe internet has been in a furor over Progressive's treatment of a Maryland family following the wrongful death of young woman in an auto accident. Is the furor justified? Check out our Generation J.D. blog post to find out: Evil Insurance Company? Following the Law? Both?

Should You Hire A Lawyer For Your Maryland Auto Accident Case?

August 6, 2012

Car Accident (2 people)(11-22-11).jpgThis post won't go into detail about whether you can or should handle a Maryland auto accident lawsuit by yourself--that's a post for a different day (for information about filing a lawsuit on your own, see the legal Self-Help section of our website).

Instead, this is to help answer whether you should settle your case on your own, or whether you should hire a lawyer to do it for you. The analysis will depend on where you are in the process:

I Was Recently In An Accident And I'm Not Finished With Medical Treatment

Early on after an automobile accident, there are a few good reasons to hire a lawyer:
  • You need medical treatment, but you either have no health insurance, insufficient PIP insurance, and you can't pay a doctor to treat you
  • You don't want to deal with the paperwork (filling out a PIP application, or ordering medical records, for example) or time (dealing with insurance adjusters)
  • You want someone else to take care of your car's property damage
  • You're concerned that the insurance company (either yours or the negligent driver's) might take advantage of you

Of course, the converse of each of these is also true. If you don't mind spending the time to deal with the accident, you have enough PIP insurance, and you can handle your property damage issues, then you can do it all yourself. You can choose to hold off hiring a lawyer, or you might choose to just resolve the whole thing on your own. People who have limited medical treatment, for example a visit to the emergency room and maybe a primary care doctor appointment, can easily handle this on their own. The more medical treatment an auto accident victim has, though, the more complicated the case becomes. In those situations, it might be good to have the advice of a lawyer. Clearly, if the victim requires surgery, or is in treatment for more than 6 months, a lawyer is a good idea. Anywhere in between is something of a gray area.

I Have Finished All Of My Medical Treatment And I'm Ready To Settle My Auto Accident Case

If the case is ready for settlement, a person injured in an auto accident may try to settle the case on his own. He can probably do so if:
  • He's willing to spend the time and money to order all medical records and bills
  • He's willing to spend the time dealing with the insurance adjuster
  • He's willing to spend the time collecting other important evidence: witness statements, police reports, etc...

Beyond this, it becomes a simple mathematical calculation. A person who has reached this point might choose to try to settle it and, if the insurance company's offer isn't good enough, he can then hire a lawyer. The calculation to determine whether a lawyer is a good idea is as follows:

Unrepresented Settlement Offer ≤ 66.66% Represented Settlement Offer

Most lawyers take auto accident cases on a contingency fee basis, which means that they get a percentage of the final settlement or verdict. Most lawyers' agreements provide that the client gets 2/3 (66.66%) of any pre-lawsuit settlement, and 60% of any post-lawsuit settlement or verdict (this number doesn't include expenses, which are usually modest in the smaller District Court-level automobile claims). The real question is whether the lawyer, either by adding his name or by expert negotiation/litigation skills, can increase your settlement or verdict by more than 2/3 (if pre-lawsuit) or 60% (if post-lawsuit). If so, you will do better by hiring a lawyer.

The reality is that insurance companies do tend to make higher offers to auto accident victims represented by lawyers. Sometimes it is enough of an increase to justify the attorneys' fees; sometimes it is not. I suspect that the main reason is inertia--insurance companies know that an unrepresented accident victim who is negotiating his own case is already less likely to hire a lawyer under any circumstances--they will sometimes accept settlements because they don't know what their case is worth; or they will sometimes accept settlements because it is easier to be done than to go that extra step to hire a lawyer. Once a lawyer is involved, however, the proper response to a low offer is to file a lawsuit, which puts the insurance company's feet to the fire (some lawyers are settlement lawyers, and some lawyers are trial lawyers--you must make sure that you hire someone with a track record of going to trial).

The only difficulty for most people is that it can be hard to know what their case is really worth, and what offer a lawyer would get. Check out the Maryland Auto Accident Settlement Calculator for more information. As a very rough rule of thumb, if the insurance company is not offering you a settlement that equals at least double your medical expenses, plus your lost wages, then they are not even trying to give you full value. In some cases, that number should be much higher than even that.

The Value A Lawyer Brings To Your Case

So what can a lawyer do for your accident claim? Here's how they can help make your life easier:
  • Deal with your insurance company to ensure that PIP makes the proper payments
  • Deal with the negligent driver's insurance company to get your car's damage taken care of
  • Deal with the negligent driver's insurance company to settle your case
  • Help to recommend a doctor if necessary (I prefer that clients go to their own doctors; in some situations, however, this is not realistic)
  • Collect all evidence, including witness testimony, medical records and bills, and police reports
  • Educate you as to the settlement value and trial value of your case
  • Negotiate down the amount owed by you to your doctors or health insurance
  • File a lawsuit, if necessary

Contact An Experienced Maryland Auto Accident Attorney

You may be able to handle your own auto accident case, and that's great. If you have general questions, feel free to give us a call. If you don't want to take care of it by yourself, let us know at 443.850.4426, or send us a confidential online message.

Auto Accident Cases While On Vacation

August 4, 2012

Ocean City Postcard.jpgWe've had a spate of referrals from out-of-state lawyers lately that involve Maryland auto accidents, usually Maryland defendants, but out-of-town plaintiffs. The scenario is that an out-of-towner is traveling in Maryland, perhaps even on vacation, and is hit by a negligent driver here in Maryland. Some of these are Ocean City auto accidents, others are for less traveled destinations in our state. Those people may treat here in Maryland while they are here, usually an emergency room visit or two, and then they finish out their medical treatment in whatever state they come from. They contact a lawyer in their home state, and that referring attorney may attempt to settle the case on his own; if that doesn't work, he needs a Maryland lawyer to file and litigate the lawsuit here in a Maryland court.

There are a couple of other of permutations--Maryland drivers visiting a vacation spot in Maryland, and hit by a negligent out-of-town driver. Out-of-town driver visiting Maryland hit by another out-of-town driver in Maryland. In each case, the lawyer should consider the best place for the lawsuit if it doesn't settle.

In Maryland, the rules about where lawsuits can be filed are usually clear. Maryland Rule § 6-201 provides that lawsuits can typically be brought in a county where the defendant lives (if a person), or where a defendant has its principal place of business (if a corporation). Rule § 6-202 provides that a lawsuit can also be filed in the county where the accident occurred.

Particularly where accidents happen for a person on vacation, there may be multiple options on where to file a lawsuit. The police report will typically show the address where the defendant lives; if that is different from where the accident happened, the lawyer should compare the potential judges/juries, and make a decision about where the case will likely have the most success. Another consideration is the convenience of the plaintiff--if the victim is from another state, he or she may have to travel back to Maryland for a trial if an auto accident settlement is not possible. However, it may be more convenient for a local accident victim to choose one permissible venue over another. The lawyer's client should be included in the decision making process.

Health Insurance and Auto Accidents

July 18, 2012

Pill and Rx pad.pngIn Maryland auto accident claims, the victim of a negligent driver is entitled to recover the cost of all reasonably related medical expenses. For example, if a driver runs a red light and hits another vehicle, the emergency room visit for the other vehicle's occupants should be paid by the negligent driver's insurance company.

Sometimes, however, the injured person's medical care is paid for by health insurance, or by personal injury protection (PIP) insurance. Maryland has a law called the collateral source rule, which says that the negligent driver cannot benefit from other payments made to the victim.

Under the collateral source rule, even if a victim's medical bills are paid by insurance, the negligent driver must pay the value of those bills directly to the victim. In some cases (notably, PIP), the victim gets to keep the money. This is something like a double-recovery in some cases. However, it helps many smaller accident victims by making them whole, when the attorneys' fees are factored in.

In other cases, however, the victim must pay back the insurance company. This is especially true where medical expenses were paid by medical assistance (Medicaid) or Medicare. But, it also typically holds true when private health insurance pays medical expenses. The contract between an insured and a private health insurer usually contains a provision that that requires a victim/insured to reimburse the health insurance company for payments made that were required because of the negligence of another.

The way that health insurance companies find out if the accident was caused by negligence is usually to send out a form to the insured, asking about the circumstances surrounding the injury. They send these forms out automatically when they find out about certain types of injuries that are typically caused by accidents--whiplash, back injuries, etc....

If there is an obligation to pay the private health insurance company back, the victim's lawyers can usually negotiate the amount owed down. One good argument is that the health insurance company would not have received any reimbursement at all, had the victim not hired a lawyer and paid his one-third to 40% in attorneys' fees. The argument we make is that the health insurer should have to pay the same fee by reducing the amount they are paid back. This gets more money into the victim's pocket.

If you have questions about paying back a medical provider after an accident, contact our firm at 443.850.4426, or send us an online message.

Maryland Auto Accident Settlement Calculator

July 18, 2012

How do lawyers determine the value of an automobile lawsuit? Check out the Maryland Auto Accident Settlement Calculator, on the Charm City Lawyer Blog.

Increasing Penalties For Distracted Driving

July 11, 2012

Given the prevalence of cell phones and smartphones, the likelihood is that many if not most automobile accidents are caused by distracted driving. The NHTSA estimates about 3,000 fatal distracted driving auto accidents in 2011. One study suggests that cell phones may be the cause of 1.6 million accidents per year, which is 28% of all auto accidents. Maryland has been improving the laws year after year, but some research questions whether existing laws around the nation are good enough.

distracted driving accident attorney.jpgAs far as punishment, some believe that higher fines will increase compliance, just as it did for seatbelt laws. New Jersey is considering a $200 fine for the first offense with a license suspension for 90 days for the third offense. Connecticut has already increased fines to $125 for a first offense. In Maryland, the fines are relatively light. Talking on a cell phone can cost $40 for a first offense and $100 for subsequent offenses. Sending or reading e-mails or texts is punishable by $70 fine for the first offense and $110 for subsequent offenses.

We should beef up the penalty provisions--larger fines and points (right now, there are no points issued for speaking on a phone for the first offense unless it causes a collision). Financial penalties provide most people with an incentive for good behavior, which will lead to safer roads.