M.R.L. v. GEICO, MIA No. 27-10001-12-0002 (June 4, 2012)
Insurer acted in bad faith by failing to fairly evaluate the evidence presented by Insured that a third party vehicle was involved in the crash.
The MIA found that GEICO had acted in bad faith by failing to fairly evaluate the crash. The Plaintiff produced some evidence indicating that a phantom vehicle caused the crash. GEICO discounted this evidence as hearsay and speculation. GEICO’s own version of events, meanwhile, rested on an equally unsound basis.
While driving on May 3, 2010, Plaintiff was riding in a car with her husband when her husband lost control of her vehicle. The car struck an embankment and rolled onto its side. Another car struck it on its undercarriage. Plaintiff suffered serious injuries with $218,567.82 in medicals and over a month of inpatient treatment and rehabilitation. Plaintiff’s husband died in the hospital. (Op. 3-4.)
Since her injuries did not appear life threatening, the police took no official measurements or photographs. The police never interviewed either the Plaintiff or her husband. The police ascribed the injuries to the drivers “over/under compensation at curve.” The police did interview the other driver, who did not see any other vehicles. (Op. 3-4.)
Some evidence, however, indicated that Plaintiff’s vehicle had been read ended. Plaintiff’s husband was conscience while being treated in the emergency room. The physician’s notes indicate that the doctor believed that the Plaintiff’s vehicle had been struck by a large truck. A Social Work Progress Note Form also reported second or third hand that the medics had said the Plaintiff’s vehicle was rear ended. Plaintiff’s daughter also recalled hearing her mother state that she had felt a weird jolt from the rear right before the collision. Plaintiff’s son asked the car’s manufacturer to pull a computer chip from the vehicle to check for signs of a valve stem blowout, but that inspection never happened. Plaintiff’s telephone interview indicates that she heard a crash right before the collision. (Op. 4-6). GEICO decided to hire an accident reconstruction specialist shortly afterwards, but did not do so for two months. (Op. 6.)
Meanwhile, GEICO continued to oppose the other driver’s claim. GEICO eventually refused to pay, but lost in an intercompany subrogation claim. (Op. 6.)
Plaintiff eventually submitted liability claims alleging a phantom vehicle had caused the accident. GEICO denied the claims because “there was no evidence” supporting it. GEICO felt that Plaintiff’s testimony about hearing a crash did not show that the vehicle had been rear ended. (Op. 7-8.) GEICO also pointed out that much of the evidence Plaintiff relied on was hearsay.
Both sides commissioned accident reconstruction experts. Each sides’ experts delivered a report favorable its side. (Op. 8-9.)
The MIA found that GEICO acted in bad faith because it discounted Plaintiff’s version of events without any good reason. It “spent much of its time arguing and documenting why the Plaintiff’s evidence was insufficient to prove the presence of a phantom vehicle and much less of its time conducting an investigation.” (Op. 12.) It dismissed Plaintiff’s evidence as hearsay while relying on hearsay to support its own positions. In the MIA’s view, “Plaintiff’s evidence was simply more probative than the Defendant’s evidence to the contrary.” (Op. 12.) In its view, the record was “sufficient to prove” that there was a third vehicle in the accident and that GEICO had failed to properly investigate the claim.
Plaintiff claimed $12,408.57 in attorneys’ fees. This included the cost of a report prepared as part underlying claim. The MIA subtracted the cost of that report and assessed attorney’s fees at $10,500. Plaintiff had not stated when the expenses were incurred, so the MIA denied Plaintiff the interest on the attorneys’ fees. (Op. 14-16.)