#punitive damages
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The horror!
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Punitive Damages
How to Put Fear of Insolvency Into a Defendant
Barry Zalma
Jan 31, 2024
Read the full article at https://lnkd.in/gMtYw3Ef, see the full video at https://lnkd.in/gyRWwS7S and at https://lnkd.in/g4YGzgg6 and at https://zalma.com/blog plus more than 4700 posts.
Post 4725
For more than fifty six years working in and about the insurance industry I For more than fifty six years working in and about the insurance industry I have personally seen the fear in the faces of corporate executives faced with a suit claiming wrongful conduct and punitive damages. Even those who knew that they had acted properly and fairly and that the allegations of the suit were totally spurious, the fear and trembling engendered by a suit seeking punitive damages is patent.
The defendant who should be leading a charge like General Patton acts more like Prime Minister Neville Chamberlain. Defendants seem to prefer to appease a plaintiff rather than litigate good and viable defenses. Unless counsel advises a 100% chance of total victory – a statement no trial lawyer will ever make – the defendant does not want to go to trial and is willing to pay more than it owes to avoid the potential of a serious punitive damage judgment.
Contrary to common belief the chances of a suit seeking punitive damages actually obtaining an award of punitive damages is very small.
Defendants often, incorrectly, concentrate on trial verdicts and overlook that almost all civil litigation matters result in out-of-court settlements. Verdicts are important but punitive damage verdicts are more like the tip of the proverbial iceberg than evidence of a trend. Practical evidence indicates that the small number of trials affect decisions in the vast majority of lawsuits that do not proceed to trial.
Verdicts are taken as important signals to the litigants. It is important to first understand the basic dynamics of a lawsuit. Most of the work in pre-trial litigation is designed to provide the litigants with enough information to allow them to reach an amicable settlement. A large punitive damages verdict skews the evidence available to the litigants and causes plaintiffs to demand more than their cases are truly worth and defendants to pay more than they should to resolve a suit seeking punitive damages.
Under basic American litigation practice the plaintiff has the opening strategic advantage. A plaintiff with a weak case places the defendant in the position of having to defend himself (and therefore incurring legal costs), or else the defendant will be liable for the full claim on a default judgment. Even a defendant facing a suit that has no merit and no chance of success before a court will often be willing to pay an amount that is less than his prospective defense costs to settle the case and “make it go away.” Appeasement of the plaintiff is, to a corporate defendant, seen to be economically the best solution.
According to various studies, the cost of defense in an average tort lawsuit ranges from $6000 to $10,000, depending on the kind of suit. A litigant with even a mildly plausible basis for an average suit can often expect a nuisance settlement value within this range.
Most often a defendant is willing to pay a settlement up to the amount of his defense costs in order to avoid having to respond to the plaintiff’s complaint.
The main determining factor of whether a filed lawsuit will yield a settlement to the plaintiff is the credibility of the threat made by the suit. The defendant and counsel determines the probability of a verdict favorable to the plaintiff if the case goes to trial. If the probability is that the plaintiff will succeed the defendant then analyzes the likely amount of damages that the plaintiff could obtain from a trier of fact in the jurisdiction where the suit is filed.
In frivolous or marginal lawsuits, or lawsuits with a doubtful chance of success at a trial, settlements often occur because the defendant rarely knows the merits of the claim with any level of certainty. Since refusing to take a valid claim seriously can be quite costly, a frivolous plaintiff may be able to take advantage of the defendant’s uncertainty regarding the claim’s validity to extract a substantial settlement.
The Supreme Court’s rulings in State Farm Mutual Automobile Insurance Co. v. Campbell, 123 S.Ct. 1513, 155 L.Ed.2d 585 (U.S. 2003) limits, by due process, the multipliers that can be applied when setting punitive damages.
In addition, the uncertainty posed by the prospect of unlimited punitive damages, combined with the relative probability of a punitive damage award if a case goes to jury trial, provide litigants who demand punitive damages with potent leverage against risk-averse defendants, like insurance companies or candidates for the presidency, and tip the balance in settlement bargains in favor of litigants with weak or even frivolous cases.
The California Supreme Court, in a concurring and dissenting opinion by Justice Clark, stated the reality of punitive damages:
Punitive damages are an anomaly in our civil jurisprudence. The civil law is concerned with vindicating rights and compensating persons for harm suffered as a result of infringement upon those rights. A plaintiff is customarily made whole for infringement by compensatory damages; punitive damages awarded to him rather than to the government constitute a windfall or unjust enrichment for plaintiff. (See, e.g., Carsey, The Case Against Punitive Damages (1975) 11 The Forum 57, 60; Note, Insurance Coverage of Punitive Damages (1974) 10 Idaho L.Rev. 263, 268.) [Egan v. Mutual of Omaha Insurance Co., 24 Cal. 3d 809, 620 P.2d 141, 169 Cal. Rptr. 691 (Cal. 08/14/1979)]
The windfall about which Justice Clark spoke is impossible to resist the temptation to sue for punitive damages and why, California has been subject to thousands of insurance bad faith cases claiming punitive damages. The principal criticism to the concept of punitive damage, recognized by Justice Clark, is that standards are so vague that the determination whether to award is left to absolute and unguided jury discretion.
Punitive damage demands, especially if other litigants had obtained a successful punitive damage judgment, will provide the plaintiff with strong bargaining power even with a weak or frivolous case. It does so in two ways:
By increasing the size of a prospective jury award (by an unpredictable and potentially enormous amount) if the case is taken to trial, and
By increasing the legal costs that a defendant will have to incur to fight the suit at trial.
The presence of a punitive damage demand provides leverage for the plaintiff to force a higher settlement value from a suit. The presence of a punitive damage demand often requires a more extensive, costlier, and more time-consuming defense by the defendants. Defending against such extraordinary claims usually requires a more expensive discovery process than ordinary damage claims.
Lawyers representing clients faced with a suit seeking punitive damages must do a serious analysis of the facts and the law and advise the client in accordance with the potential for the plaintiff obtaining an award of punitive damages. If there is a potential equal or better than 50% settlement negotiations should be entered with advice to the plaintiff that punitive damages are taxable to the plaintiff. If, on the other hand, the case seeking punitive damages is spurious the client should tell its counsel to defend through trial and any possible appeals and refuse to pay tribute to the plaintiff.
For further detail see my book Insurance Bad Faith and Punitive Damages Deskbook available from Full Court Press at the Fastcase bookstore at http://fastcase.com/
(c) 2024 Barry Zalma & ClaimSchool, Inc.
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Who Is the Best Motorcycle Accident Lawyer in Bakersfield
Choosing the best motorcycle accident lawyer in Bakersfield is essential if you have suffered an injury due to a motorcycle accident. This is because you need someone who knows the law and can fight on your behalf to get you the compensation you deserve. In addition, the lawyer should be able to help you get the medical care you need....Read More
#Best Motorcycle Accident Lawyer in Bakersfield?#Investigating the accident#Punitive damages#Liability based on fault
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Bill Bill
The Bride gets revenge on Bill not by killing him, but rather by sending him the invoices for the wedding he ruined, as well as for her medical expenses, and files several lawsuits to for compensatory and punitive damages.
#bad idea#movie pitch#pitch and moan#accounting#kill bill#the bride#quentin tarantino#lawsuit#tort#wedding#expenses#punitive damages#revenge
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oh thank god it sounds like the data they used to guess at infowars' annual net revenue was inflated for ego reasons
#original#knowledge fight#i missed it but someone said the expert witness for financials estimated 60-70mil annual#which is still too fucking much but it means the 4mil in damages+1.5mil in sanctions is a much higher percentage than assumed#which is good because i'm hearing the cap on punitive may be the much lower figure previously discussed#but in that case idk wtf the multiplier discussion was about#is there a cap on purely symbolic damage amounts???#i don't know law things i only know money math#he still makes a lot but the prior estimates were So Much it was awful
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Punitive Damage, Big Laugh, Militarie Gun, and Scowl at The Russian Hall. 16/10/23.
#black and white#musicphotography#punk photography#diy#nikon#original photographers#punk#vancouver#hardcore punk#vancouver bc#scowl band#scowl#militarie gun#punitive damage
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Why the fuck do I suddenly suck when playing electric guitar? I’m actually pretty good on acoustic!
-30 seconds on Google-
You mean my overcooked spaghetti hands would have had an easier time learning on electric because it takes less pressure?!
Edit: oh right, the rest of me
#ehlers danlos problems#disability life#learning guitar#ebony sings the thing#< close enough#this thing is heavy enough to go from battery to battery w/ a deadly weapon if I swing. and yet it takes baby grip strength to operate???#THE FUCK#edit 1:#it’s been 30 minutes of playing with a strap—#do not. <- you know who you are#—and my neck. my back. my tailbone and abdominal muscles are suing for punitive damages.#will that stop me? no#will it make me take steps to protect & rehabilitate myself. lest my body decide to repo sitting privileges? yeah ok das fair.#… I already know my lungs and ribs will file a restraining order if I try to play laying down.
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Punitive Damage // ph. Jonathan Velazquez
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68. PUNITIVE DAMAGE. 2023-06-29 @ Venster99 (w/ Strafplanet & Finster)
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Insurer Protects its Insured with a Settlement
No Right to Change After Agreeing to a Settlement
Barry Zalma
Aug 16, 2023
Read the full article at https://lnkd.in/g6GPauG2 and see the full video at https://lnkd.in/g2-H6JQQ and at https://lnkd.in/ggH_FjFw and at https://zalma.com/blog plus more than 4550 posts.
INSURER’S INSTIGATION OF SETTLEMENT IS EVIDENCE OF GOOD FAITH
After parties to a suit resolved the suit by settlement one or more of the parties tried to renege on the agreement and appealed the trial court’s order to enforce the parties’ settlement agreement. The parties’ settlement agreement required them to dismiss all claims, counterclaims, and crossclaims with prejudice. In Shorewood Forest Utilities, Inc. v. Rex Properties, LLC and Don Blum, No. 22A-PL-2345, Court of Appeals of Indiana (August 11, 2023) the Court of Appeals resolved the claims concerning the Settlement Agreement.
FACTS AND PROCEDURAL HISTORY
Shorewood is a nonprofit corporation that provides sewer service to more than 1000 residents in Porter County. Rex Properties is a property developer, and Blum is the sole managing member of Rex Properties. In 2017, Shorewood and Rex Properties entered into an agreement for Shorewood to expand into a new Rex Properties development and service the homes there according to certain terms, rates, and fees. Not long thereafter, Shorewood concluded that its agreement with Rex Properties was not enforceable, and Shorewood declined to participate in the project.
By mid-2019, the only claim remaining in the instant cause was Rex Properties’ approximately sixteen-million-dollar counterclaim against Shorewood for breach of contract. Shorewood sought to amend its complaint to allege claims of fraud, fraud in the inducement, unjust enrichment, and criminal deception against Rex Properties. In March 2020, the trial court permitted Shorewood’s requested amendment.
In the spring and summer of 2020, the parties attempted to settle out of court. On June 8, counsel for Shorewood sent counsel for Rex Properties an email stating that Shorewood’s insurance carrier, Stratford Insurance, had agreed to pay Rex Properties $950,000 for Shorewood and Rex Properties to settle and dismiss all claims, counterclaims, and crossclaims in this cause.
Mr. Blum approved the settlement with the terms set forth in the offer email.
Over the next several weeks, the parties’ attorneys worked on drafting a Settlement Agreement. Counsel drafted an agreement but Shorewood refused to sign it. Accordingly, Rex Properties filed a Motion to Enforce Settlement Agreement on the ground that the June 8 email exchange represented an enforceable agreement between the parties whereby Stratford Insurance would pay Rex Properties $950,000 and, in exchange, Shorewood and Rex Properties would dismiss all claims in this cause with prejudice.
THE ISSUES
The central issue in this appeal is whether the email exchange between the parties on June 8 represented the offer and acceptance of an enforceable settlement agreement. The trial court concluded that the parties’ June 8 email exchange created an enforceable settlement agreement.
Shorewood had made an offer, Rex Properties accepted the offer, there was more than ample consideration between them and Stratford Insurance, and all parties had a meeting of the minds over definite and certain essential terms.
Shorewood claims that Stratford Insurance colluded with Rex Properties and somehow kept Shorewood “in the dark and uninformed” about the “terms, conditions, requirements, and payments” to be made to Rex Properties.
The trial court’s denial of Rex Properties’ motion for judgment on the pleadings and its motion for summary judgment resulted in a settlement agreement between Shorewood and Rex Properties, and their settlement rendered the trial court’s prior judgments moot.
The trial court’s judgment was affirmed.
ZALMA OPINION
Courts invariably prefer settlement agreements. Insurers, like Stratford, prefer settlements. In this case Stratford put up almost $1 million to settle, the parties agreed by e-mail and an agreement to memorialize the agreement with a formalized agreement. The contract was made by the e-mail exchange of offer, acceptance and consideration. The formalized agreement was not necessary and the good work of the insurer resulted in a solution to an extensive case and protected its insured.
(c) 2023 Barry Zalma & ClaimSchool, Inc.
Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos.
Subscribe and receive videos limited to subscribers of Excellence in Claims Handling at locals.com https://zalmaoninsurance.locals.com/subscribe.
Consider subscribing to my publications at substack at https://barryzalma.substack.com/publish/post/107007808
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Daily articles are published at Zalma on Insurance
Insurance, insurance claims, insurance law, and insurance fraud .
By Barry Zalma
Go to the podcast Zalma On Insurance at https://podcasters.spotify.com/pod/show/barry-zalma/support; Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library\
Please tell your friends and colleagues about this blog. Go to the Insurance Claims Library – https://lnkd.in/gBPMEyqr
Please tell your friends and colleagues about this blog. Go to the Insurance Claims Library – https://lnkd.in/gBPMEyqr
#insurance#claims#insurance claims#lie#never lie#punitive damages#bad faith#insurance books#amazon.com
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I believe this can be appealed as Texas has a cap on damages that this exceeds but it’s a decent precedent for the multiple other lawsuits against him
#I have heard very mixed things about the cap on punitive damages#like literally two of the plaintiffs attorneys have each said vastly different amounts so ¯\_(ツ)_/¯
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on a related note i've been listening to believable: the coco berthman story because of my women faking cancer fascination and tbh i keep forgetting about the cancer part because everything else she's done is just so outrageous
#she's kind of a monster i'm so fascinated and angry#and unlike amanda she barely got a slap on the wrist uuhghghghgh#problems with the punitive justice system aside you would still expect more given the damage she's done. who is protecting her#marshy speaks
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Punitive Damages vs Compensatory Damages
Punitive Damages vs Compensatory Damages are meant to compensate injured people for all their injury related losses, while Punitive damages are intended to punish the at fault party’s wrongdoing.
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Uninsured Motorist Accidents in California: Legal Recourse and Compensation
The uninsured motorist accidents are those calamities in which drivers do not have any liability insurance. If a driver faces an accident and does not have any insurance they might face certain issues like medical expenses, lost wages, pain and suffering, and property damage. California law requires all drivers to carry liability insurance to protect other drivers in case of an accident. However, not all drivers comply with this law, and an estimated 15% of California drivers are uninsured. If you are involved in an accident with an uninsured motorist, you may be wondering what your legal options are and how you can recover compensation for your injuries.
#Uninsured Motorist Accidents in California#Hiring a Car Accident Lawyer#Car Accident Settlement#Legal Assistance for Accidents in California#Punitive Damages vs. Compensatory Damages
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