Maryland Injury Lawyer Blog

Yesterday, I reported on the Maryland Court of Appeals' opinion this week in Harleysville Mutual Ins. Co. v. Zelinski. In my comment, I wrote that while I regretted the court's opinion because of the impact on the plaintiffs in that case, I agreed that the Court of Appeals came to the right result. It was brought to my attention today that Dave Stratton also reported on and criticized the Maryland Court of Special Appeals' opinion in his blog in a post last summer.

Dave's blog, by the way, is a must read for Maryland personal injury lawyers. Although the blog clearly has a defense slant, he provides invaluable information on his blog for all Maryland lawyers. In fact, Dave's blog was one of my inspirations in starting this blog. Although he is writing primarily for defense lawyers in Maryland, Virginia and the District of Columbia, Dave did not drink the "defense lawyer Kool-Aid" to the point where he just reads off the defense lawyer "party platform" without consideration of what justice should dictate. I have tried to follow his model in this blog. Although I clearly have a bent towards plaintiffs and injury victims' rights, I do not assume the injured plaintiffs are always right and the insurance companies are always wrong or that the law should be unduly slanted in favor of injury victims. I believe every case should be considered on its own merits and hope that the party that should prevail does prevail.

The Maryland Court of Appeals issued its opinion this week in Harleysville Mutual Ins. Co. v. Zelinski. This question addressed was whether a named driver exclusion endorsement was valid for a commercial truck insurance policy. The case stems from a head-on truck accident in Cecil County in 2000. A jury awarded the victims, a woman and her son, $1.7 million.

The truck driver was the son of the owners of a septic service company. Apparently a young man, he managed to collect 18 points on his Maryland driving record, most of which arose from a conviction for driving under the influence and a conviction for exceeding the speed limit by more than 30 MPH. His parents knew of his driving record and soon, so did Harleysville Insurance.

Acting pursuant to the endorsement in the policy, Harleysville offered the company's owners a chance to either cancel their policy or kick their son off the policy. They chose to accept the endorsement. The son obtained insurance to drive the truck in question through the Maryland Automobile Insurance Fund.

The question the case addressed is whether the endorsement that made the truck driver's parents chose between canceling the policy or excluding their son is contrary to, and therefore impermissible, under Maryland law.

After the jury's verdict against the truck driver, Harleysville Insurance's attorneys sought and received a ruling from the Cecil County Circuit Court that their insurance policy's exclusion was valid. On appeal, the Maryland Court of Special Appeals held that the circuit court erred because the legislature did not approve a named driver exclusion for commercial policies. The Maryland Court of Appeals unanimously reversed, finding that the legislative history of the named driver exclusion contains nothing to indicate that it cannot apply to commercial policies.

I feel awful that these truck accident victims will now not be able to enforce their verdict. Most likely, their attorney will only be able to collect the truck driver's $20,000 Maryland Automobile Insurance Fund policy. But had the Maryland Court of Special Appeals' verdict become the law, small businesses that employed drivers with bad records would have only two options: fire those employees or go without insurance. Because most small companies will not fire all employees with bad driving records, it would leave too many personal injury victims without any insurance at all . This would be a bad outcome for many Maryland auto accident victims. Accordingly, while I regret the result in this tragic truck accident case, I think it may be the correct ruling.

Last month, I wrote a bit about Jury Verdict Research, which conducts studies of jury verdicts around the country. A recent Jury Verdict Research study of truck accidents from January 1996 to January 2005 found that truck accident victims recover damages in 60% of personal injury trials and receive a median compensatory award of $90,000. The average truck accident case involving a disc injury, usually a herniated disc, was $122,532. In contrast, the average median verdict in a head-on truck accident case the study was $532,034.

On January 14, 2006, a Clark County, Nevada jury awarded $14.1 million to a truck crash victim who was killed by a drunk driver in 2001. The verdict was divided between $4.1 million in compensatory damages and $10 million in punitive damages to be paid by three corporate defendants: Terrible Herbst Inc., ETT Inc., and Herbst Supply Inc.

Rosa Delegado, a 58-year-old grandmother, was getting into her car when the defendant truck driver hit her with a large industrial truck. Delegado was pinned against her car and run over. Ms. Delegado's family's attorney filed a personal injury civil lawsuit against Terrible Herbst, which operates 80 convenience stores and gas stations in Nevada.

The Plaintiff alleged that the defendant driver had a history of drinking and driving that apparently did not offend the sensibilities of his employer Terrible Herbst. In fact, incredibly, a company supervisor testified that he was not concerned by the fact that the truck driver defendant had come to work smelling of beer. He further testified on another occasion that the truck driver and another temporary worker asked him for permission to drink beer at lunch. In spite of this, the supervisor testified that he did not necessarily have reservations about this man driving a truck for Terrible Herbst. Unbelievable.

I did not sit through the trial, of course, I am just reading the media's account of this truck accident. But if these facts are as presented, it is hard to argue that punitive damages are not appropriate. In this case, the jury readily agreed to the tune of $10 million.

In Maryland, punitive damages are impossible to recover in a personal injury case like this one because the plaintiff must demonstrate that the defendant acted with "actual malice." Actual malice is "evil motive, intent to injure, ill will or fraud." Setting the bar even higher for plaintiff's personal injury attorneys in Maryland bringing a punitive damages claim, actual malice must be demonstrated by clear and convincing evidence.

The purpose of punitive damages in a case like this is to modify the defendant's behavior. It is extremely difficult to muster empirical evidence to evaluate whether punitives have a deterrence effect because there is no systematic reporting of punitive damages. Even if there was such data, there are so many other variable involved that could skew the data. The death penalty deterrance debate is a perfect example. So the debate among lawyers, judges, and legislators continues on anecdotal evidence.

Personally, I think this issue is very different from the death penalty question because corporations do act rationally: the seek to maximize profits and avoid risk. Accordingly, they act in their self interest to take steps to avoid risk. People considering capital offenses are rarely rational and certainly not risk adverse. In my opinion, punitive damages are necessary in Maryland when corporate defendants show reckless disregard for the safety of people like Rosa Delegado.