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Who Gets the Money in a Wrongful Death Case?

A recent decision from the United States District Court reaches the initially startling conclusion that the estate of a man injured by the negligence of another driver who also died in the crash could not attach monies received by the defendant’s daughter as compensation for his death.  It sounds incredibly confusing and completely illogical, but because of the way the Massachusetts wrongful death statute works, it’s exactly the right result.  Here’s why:

Amnon Bogomolsky was killed when the minivan he was driving was hit by a truck driven by Michael Furlong, who also died as a result of the collision.  The deadly crash took place near the approach to the Sagamore Bridge in Bourne.  A state police investigation of the crash concluded that several factors contributed to the collision, including Furlong’s excessive speed, the presence of cocaine and benzodiazepines in his system, and poor brakes on his truck.  The police also faulted an unknown vehicle that had merged onto Route 3 eastbound, possibly encroaching into Furlong’s lane, that caused Furlong to veer into Bogomolsky’s lane.

Bogomolsky’s estate sued Furlong’s estate, and sought an attachment of $100,000 in uninsured motorist proceeds that Commerce Insurance Company had agreed to pay to Furlong’s estate in settlement of the uninsured motorist claim–resulting from the negligence of the driver of the unidentified third car.  The court in Bogomolsky v. Furlong denied the attachment, properly ruling that, under Massachusetts law, the proceeds of the wrongful death claim belonged not to Furlong’s estate, but to Furlong’s daughter, who was the beneficiary under the wrongful death statute.  It sounds strange, but the court got it exactly right.

One of the interesting features of the Massachusetts wrongful death statute, G.L. c.229, ss. 1 and 2,  is that the personal representative of the estate has the authority to bring a wrongful death case, but that any recovery is distributed to the so-called statutory beneficiaries–the heirs at law.  The damage recovery never becomes an asset of the decedent’s estate, but instead is held by the personal representative in trust, with the obligation to distributed it directly to the beneficiaries.

What that means in the Bogomolsky case is that the $100,000 uninsurance proceeds, which were being paid on account of a claim by Furlong’s estate against the unidentified driver, never became a part of the estate, but instead, would go directly to Furlong’s daughter, the statutory beneficiary.  Since the proceeds were not an asset of Furlong or his estate, they were not subject to attachment by Bogomolsky’s estate.  In contrast, if Furlong had a bank account or a house in his name at the time of his death, those would be assets that the plaintiff could attach as security for a personal injury judgment.

This principle has important consequences that I’ll discuss in the next post.

Read the opinion in Bogomolsky v. Furlong here.


Insurance Policy Bites Dog Owner

Unknowndog biteA recent case from the Supreme Judicial Court is an important reminder to home and business owners to make sure they read and understand the terms of their insurance policies.  A local dog owner didn’t do that, with devastating consequences.

Caron v. Horace Mann Insurance Company involved a homeowner’s policy that both the homeowner and the insurance agent believed provided $500,000 in coverage for liability resulting from dog bites.  When the homeowner met with her agent to complete an application for a new insurance policy, the agent asked the homeowner if she owned any of a specific list of dog breeds.  The homeowner truthfully replied that she did not; she owned an American bull dog, which was not on the list.

Although they did not discuss dog bite liability, both the agent and the homeowner believed that the full policy limits of $500,000 would apply to liability resulting from a dog bite.  In fact, there was a clear limitation in the policy language stating that Horace Mann would pay no more than $25,000 for dog bite injuries.  The homeowner later received the policy, and “skimmed” the provisions.

Of course, you know what happened next.  The bull dog bit someone, who sued the homeowner and recovered a judgment of some $250,000.  When the homeowner asked Horace Mann to pay, the company raised the policy provision limiting its liability to $25,000.  A second lawsuit ensued–and the Supreme Judicial Court ruled that Horace Mann was right, leaving the homeowner exposed to uninsured liability approaching a quarter of a million dollars.

This case is an important reminder for dog owners, given the state of Massachusetts law.  The Massachusetts “dog bite statute,” G.L. c.140 s.155, makes the owner or “keeper” of a dog liable for any injuries caused by the dog.  Unlike some states, there is no “free bite,” and the owner doesn’t need to be aware that the dog bites, or is vicious, and the plaintiff doesn’t need to prove that the dog has ever bitten anyone before.  The only defenses are that the victim was trespassing, or was teasing or tormenting the dog (unless the victim is under the age of seven, in which case he’s apparently allowed to torment the dog).

This statute basically imposes so-called “strict liability,” or “liability without fault” on dog owners.  It’s really founded on public policy, that the owner or keeper of a dog must pay for any damage caused by the dog, pretty much regardless of the circumstances.  And because dogs will be dogs, and may bite unexpectedly, it’s important for dog owners to have proper insurance coverage for this kind of claim.

Read the Supreme Judicial Court’s opinion in Caron on the court’s website here.
 


Common Sense and Elephants

insuranceThe Rhode Island Supreme Court recently approved the actions of a trial court judge who took the unusual step of speaking to jurors about insurance–an issue that is ordinarily mysteriously absent from the evidence in most personal injury trials.

The trial judge in Oden v. Schwartz instructed the jury that they were not to consider such issues as medical or other insurance or attorney’s fees.  She further told them that they were not to consider what might happen to the physician’s malpractice premiums as a result of a verdict against him (which is probably nothing).  Predictably, as whenever there is any mention of insurance at trial, the defendant doctor’s lawyer objected vociferously, and when there was an adverse verdict, appealed.

In striking a blow for common sense, the Rhode Island Supreme Court held that it was entirely proper for the trial judge to address issues that are often in the minds of jurors, and to tell them–accurately–that these are not proper considerations in their deliberations.  The Court noted that the trial judge “simply addressed the reality that jurors often wonder about liability coverage, especially in instances where there is typically an insured risk, such as medical malpractice.”

The Rhode Island court is entirely correct.  We all know from our own experience on juries and from hearing comments by jurors after trial that they are well aware that doctors carry malpractice coverage.  They also assume that their verdict might impact the doctor’s premiums–even though this is not usually the case.  They usually suspect that large medical bills are or will be paid by health insurance, and expect that the plaintiff will have to pay his attorney a contingent fee.  Yet none of these factors is a proper consideration in the jury’s deliberations.

These issues are the elephant in the corner of the courtroom.  They are a natural part of a juror’s thought process–yet the rules of evidence forbid any mention of these issues.   The approach chosen by the trial court and approved by the appellate court is sensible, because it confronts the elephant head on, and attempts to explain the absence of any mention of logically related issues by telling the jurors that they are not proper considerations.

If anything, it would make sense for trial judges to go even further: to explain to jurors that their verdict depends on whether a defendant is legally responsible, and not whether he is insured, or that most health care insurers can recover what they’ve paid from the plaintiff if the plaintiff gets a verdict that includes medical expenses, so the plaintiff will not receive a windfall.  The best way to prevent jurors from improperly taking these factors into account, or from making incorrect assumptions, is to be frank, to name the elephant in the corner and explain why it must be ignored.

Read the Rhode Island court’s opinion in Oden v. Schwartz here.


Who Pays When a Defendant Has Too Little Insurance?

*Aug 18 - 00:05*One of things that most people don’t think about until they are injured is how much insurance coverage might be available to compensate them for someone else’s negligence.  Too often, we as lawyers have to break the news to a client that a negligent driver, homeowner, bar or doctor doesn’t have nearly enough insurance to cover  liability for a serious injury.

This deficiency was highlighted in one installment of the recent Boston Globe series on taxicabs, which discovered what most lawyers have known for years: the majority of taxicabs–which spend most of their time driving around on our roads–have less insurance coverage than those of us who use our cars with normal frequency.  The sad result is that passengers or others who are severely injured or even killed by the negligence of a cab driver may find that there is only the Massachusetts  state-minimum $20,000 of insurance coverage available to compensate for their losses.

As the Globe article noted, the large taxi companies have successfully arranged their business affairs to minimize their liability exposure.  Using separate corporations to own cab medallions provides a lot of protection to owners, while leaving passengers with limited avenues of recovery for a serious injury.  The protection offered by these separate corporations may be defeated in some cases–lawyers call this “piercing the corporate veil”–but it is a long and arduous process.

The lack of adequate insurance coverage is not limited to taxi cabs.  Some drivers carry only the minimum amount of coverage, while some home owners have little or no coverage for injuries occurring on their property.  Rhode Island requires $25,000 for drivers, while New Hampshire does not require drivers to have insurance unless they have a record of driving infractions.  Most people with limited coverage also have limited assets from which to pay a large judgment against them.

The problem of inadequate coverage also extends to some professions.  While doctors in Massachusetts and Rhode Island are required to have malpractice coverage, the minimum requirement is $100,000, and the most common policy limit is $1,000,000–which might sound like a lot until you consider that many malpractice claims involve serious permanent brain damage or other serious injuries, or even death.  Massachusetts chiropractors are somewhat better–being required to carry at least $500,000 per claim, while lawyers are not required to carry malpractice coverage at all–although a client can determine whether his lawyer carries insurance by checking the Board of Bar Overseers website.

There are limited ways in which we can protect ourselves against the problem of inadequately insured defendants.  Individual health insurance, disability policies, and life insurance can help to fill the gap in some cases, but these policies can be expensive and will not compensate for all losses.  Too often, the end result is that we all share the cost of underinsured defendants through public benefit programs such as Medicare and Medicaid.