32 Trial Lawyer • Summer 2023 By Don Corson OTLA Guardian It was a typical beautiful Oregon late summer day when Chuck got off work. Driving home, he stopped at the stop sign, facing the sun. He looked both ways, pulled forward and was shocked when a motorcycle hit his car. Chuck reported the crash to his auto insurance company. He did not feel that he had done anything wrong, but left it to the professionals to take care of things. He didn’t need to worry, he figured. He had bought full coverage from a wellknown insurance company. Behind the scenes, the adjuster for Chuck’s insurance company wrote that Chuck was clearly liable and reserved the full amount of his $100,000 liability limits to pay the motorcyclist’s serious personal injury claim. A later property damage arbitration between insurance companies found Chuck to be 100% at fault. Chuck’s insurance company did not tell him about that determination. A year went by without Chuck’s insurance company trying to settle the claim against him for his $100,000 policy limits, although the insurer knew the motorcyclist’s claim was worth considerably more than that amount. Then the insurance company told Chuck he had the right to hire his own attorney at his own expense and contribute to a settlement. He didn’t understand why. The insurance company didn’t tell Chuck that he was solely at fault, that the motorcyclist had a large valid claim, and that the motorcyclist was willing to settle for the policy limits amount. After multiple unsuccessful attempts by the motorcyclist to settle the claim for Chuck’s policy limits, the motorcyclist filed a lawsuit shortly before the statute of limitations ran, seeking damages far in excess of Chuck’s insurance policy limits. The insurance company hired a lawyer, who did not tell Chuck that the crash was all his fault, that his insurance company could have settled for the policy limits for the past two years or that Chuck might have a claim against his own insurance company for mishandling the claim. The insurance company’s lawyer did tell Chuck he could consult Don Corson with a bankruptcy lawyer in the event of a trial with an excess verdict. The trial resulted in a $329,820 judgment against Chuck. He was financially and personally devastated. Insurance loyalty The motorcyclist’s attorney eventually got Chuck in touch with us to consider a “bad faith” claim against his insurance company for unnecessarily exposing him to personal liability. Evaluating and prosecuting that kind of a case involves reading tens of thousands of pages of documents. No one person at the insurance company had personal knowledge of all of the facts of the case. There are insurance rules that involve national model rules, Oregon state laws and administrative rules, court cases, insurance company manuals and training materials, and industry custom and practice. Numerous insurance company employees with knowledge of the facts were spread all over the country. At the start, it seemed like a daunting morass. In Chuck’s case, the defendant was a multibillion dollar insurance company. More generally, in personal injury cases, defendants are often organizations, typically corporations, but also governments, limited liability companies and other entities. Sometimes organizations that are not defendants have important information that a plaintiff needs to obtain in Deposing the Organization
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