The plaintiff, a 48-year-old woman named Marcia Arreola, was stopped at a traffic light in Cerritos on Dec. 23, 2014. She was stopped at a light on Artesia Blvd. at its intersection with Norwalk Blvd. facing westbound. Defendant Susan Hanson was traveling eastbound on Artesia, and defendant John Austin Deapera Ella was heading north on Norwalk. The two defendants collided in the intersection, causing both vehicles to careen into Arreola’s vehicle.
Arreola suffered an aggravation of neck pain together with cervical degeneration as a result of the accident. The cervical degeneration made her a surgical candidate. She filed a lawsuit against Hanson and Ella for negligence. Ella’s insurance company later tendered his policy limit of $25,000, so he was let out of the lawsuit.
Plaintiff’s and defendant’s arguments
Plaintiff argued that Hanson ran the red light and caused the accident with Ella and with her. She argued that the aggravation of her pre-existing injuries made her a candidate for surgery. The defendant argued that it was Ella instead of Hanson who ran the red light and that Hanson had already paid his policy limit of $25,000 before trial. Hanson also argued that Arreola’s injuries were limited to a cervical sprain or strain and that the injuries did not make her a candidate for surgery. Finally, Hanson argued that Arreola had not sought medical treatment for three years from the time of her accident.
Pretrial demands and offers
Prior to trial, Arreola made a § 998 demand for the amount of Hanson’s policy limits of $30,000. She made this demand in May 2016. Allstate, which was Hanson’s insurance carrier, did not agree to the demand or respond with an offer. Since the offer was not accepted, the case proceeded to trial.
Jury trial and verdict
The jury trial lasted for five days. The plaintiff called two medical experts, including an orthopedic surgeon and a spine surgeon. The defendant called a medical expert in neurology. Both parties called their own accident reconstruction experts. The jury deliberated for three hours before returning a verdict in favor of the plaintiff in the amount of $660,000. Of that amount, $100,000 was for future anticipated medical expenses, $140,000 was for past non-economic damages, and $420,000 for future non-economic damages. Since the plaintiff beat her § 998 demand by a substantial amount, she filed a post-trial motion for $163,000 in prejudgment interest and $48,000 in costs.
Apportionment of fault
California is a comparative fault state in determining liability in a multi-vehicle collision such as what happened in this case. Under California’s comparative fault law, judges or juries determine how to apportion fault when more than one party shares blame for an accident. Fault is apportioned between the parties by percentages. If the plaintiff is also to blame, his or her recovery will be reduced by the percentage of fault that is apportioned to him or her. In this case, no fault was apportioned to the plaintiff because she was not at fault in the accident. Instead, the fault was apportioned between the two original defendants.
Ella settled for his policy limits and so was not a party to the lawsuit. Hanson did not settle, so the jury’s verdict was apportioned to her alone.
Getting more than the policy limits
One thing that this case illustrates is that it is possible in some cases for plaintiffs to recover more than the policy limits of an at-fault driver’s insurance. In this case, Hanson’s policy limit was $30,000, which was the amount that Arreola demanded under CCP Sect. 998. This law incentivizes reaching settlements before trial while providing a disincentive for failing to settle. Under this law, plaintiffs who fail to accept § 998 offers from defendants and recover less than the offers will not be able to recover their own costs and will have to pay the costs of the defendants for the time between the offers and the conclusion of the trials. Conversely, if defendants refuse to accept a plaintiff’s § 998 offer, and the plaintiff then receives a more favorable verdict from the jury, the defendants will have to pay the plaintiff’s costs from the date of the offer up through trial.
CCP § 998 provides a powerful incentive for parties to settle their cases before they go to trial. This law also allows plaintiffs to recover more than the policy limits in some cases if all of the following apply:
- The § 998 demand is made in clear terms;
- In cases involving multiple plaintiffs, all must join together in making the demands;
- All of the insureds must be released from liability;
- The demand amount must be for the policy limits; and
- The insurance company must have enough time to fairly evaluate the demand.
In the instant case, the plaintiff submitted her § 998 demand to Hanson’s carrier, Allstate, in May 2016. The verdict was reached on Nov. 20, 2018, after a five-day trial, which means that Allstate had 18 months to evaluate her demand. This amount of time seems more than reasonable. Arreola also made a demand for Hanson’s policy limits, and Hanson was released from liability under the terms of her policy. There were no other plaintiffs to join in the settlement demand, and the demand appears to be clear.
In situations such as Arreola’s when insurance companies refuse the demands and later receive an unfavorable verdict that exceeds the policy limits, they can either agree to pay the excess or risk being sued by their insureds for bad faith. Most insurance companies simply go ahead and pay the excess amount instead of risking lawsuits from their insureds for bad faith insurance claims.
Contact an experienced personal injury lawyer in Los Angeles
If you have been injured in an accident involving multiple vehicles or in which an at-fault motorist has insurance with insufficient policy limits, getting help from an experienced personal injury lawyer in Los Angeles might help you to recover compensation. To learn more about the rights that you might have, call the Law Offices of Steven M. Sweat today at 866.966.5240 to schedule a consultation.