Ronald S. Levitt, Esq. recently participated in a very interesting matter for one of our excess carrier clients. The matter involved a claim for personal injuries sustained by a third-year college student involving horrific burn injuries to 58% of his body surface. Plaintiff’s counsel was an experienced trial attorney who several years earlier had obtained a $55M verdict in a burn case. Our carrier insured a local affiliate of a national emergency road service organization (“ERS”). The organization had dispatched a tow truck to one of its members and the tow truck operator, en route to the service call, rearended the plaintiff’s Ford Mustang at 55 mph. Plaintiff , who was only given a 5% chance of survival upon arrival at a burn center, was disabled and grotesquely disfigured.
With the tow truck operator having only $2M in coverage, plaintiff’s counsel looked to the ERS, Ford and others. The claim against the insured was that the tow truck operator was the “agent” of the ERS, in spite of clear language in the contract as to an “independent contractor” relationship. The demand against the insured was well beyond the primary carrier’s significant limits and well into our client’s excess layer. On the eve of jury charges and deliberations, the underlying carrier agreed to offer its significant policy limits, placing our client in a disadvantageous negotiating position. Nevertheless, Ron and Jeffrey S. Bell, Esq. were able to negotiate a settlement with plaintiff’s counsel for only 3% of the excess limits. As a footnote, the matter continued to jury verdict against certain remaining parties. A gross verdict was entered on damages in the amount of $12M. The jury specifically found that the tow operator was the “agent” of the ERS. Part of our post-trial analysis for the client highlighted the importance for underwriters to look at the contractual relationship between the insured and others, considering the importance afforded the “independent contractor” language in the agreement in this case.

Christopher H. Westrick, Esq. recently completed a two-week trial of a construction defect dispute in Somerset County, New Jersey. Plaintiff sought nearly $350,000 for allegedly negligent construction of an addition to a trucking depot. However, the depot had been severely damaged by a fire and it was argued to the jury that the plaintiff had been largely made whole as a result of fire insurance claims, and that the fire constituted an intervening, superseding cause. Although returning a finding of negligence, the jury accepted the intervening cause argument and only awarded $12,000 against the client. The plaintiff is expected to file an appeal.