The Ace American Insurance Co. defense team a parked landscaping truck.
After all, there were indications that the Brickman Group truck was legally parked along the road. Also, Braswell's helmet was cracked in the middle and the injury was up to the top of his head, indicating that he had his head down at the time of the accident and was not looking where he was going.
Nonetheless, a Houston area jury awarded approximately $ 28 million to Braswell's widow, mother, and two children. The family agreed to settle the case for less than $ 10 million to avoid an appeal, but that was still enough to blow through the $ 2 million in primary coverage available through Ace and most of the $ 10 million in additional coverage available through an issued policy. by American Guarantee and Liability Insurance Co.
A ruling Monday by the U.S. 5th Circuit Court of Appeals makes Ace liable for the full amount of the settlement, offering insurers another lesson on the costs of social inflation. Under Texas law, a primary insurer can become responsible for damages well beyond the policy limits if it fails to protect a surplus insurer by refusing to accept a reasonable settlement offer.
The Appeals Panel determined that Ace was doing his & # 39; Stower & # 39; s duty & # 39; – named after a 1929 Texas Appellate Court decision – by rejecting an offer from Braswell's family to settle the case for $ 2 million.
Considering all the circumstances of the trial, a & # 39; common and prudent insurer & # 39; in Ace's position would have realized that the & # 39; probability and extent & # 39; of Brickman & # 39; s & # 39 "possible exposure to excessive judgment" had deteriorated significantly since the inception of the trial, "Circuit Judge Edith H Jones wrote before the panel of three judges, citing previous case law.
According to a report in the Houston Chronicle, Braswell was a 43-year-old captain in the Houston Fire Department when he crashed into Brickman's trailer, now known as BrightView. There were no witnesses, but a lawyer for his widow and children told the newspaper that testimony indicated the truck had stopped abruptly and parked dangerously on a busy dual carriageway to unload equipment.
The family sued Brickman for damages and made three settlement offers to Ace before and during the trial. In the latest offer, Branswell's family asked for $ 2 million, according to the 5th Circuit's opinion.
Ace's counsel estimated the case to be worth $ 1.25 to $ 2 million. A claims manager for the surplus insurer, AGLIC, initially thought the case would have to settle for the $ 2 million primary insurance limit. The lawyers also conducted jury research and decided it would be important to prove that the Brickman truck did not stop abruptly in front of Braswell and was legally parked.
Things did not go well with the insurers at the Harris County District Court trial. The judge, S.K. Sandhill was known as & # 39; plaintiff friendly & # 39; according to the court opinion. Sandhill ruled out evidence that the Brickman truck was legally parked. He also allowed the widow, Michelle Braswell, to testify that a Brickman employee had told her that the driver of the truck for her husband had "briefly stopped", even though the attorney had objected to that. the hearsay statement was.
Michelle was also allowed to testify that the accident had caused serious psychological trauma to the couple's daughter, who had attempted suicide and was admitted to a psychiatric hospital. Two former fire chiefs testified of Braswell's commitment to service, courage and love for the family. He had once rescued a double amputee from a burning building.
The jury heard testimony that the Brickman crew did not place safety cones around their vehicle while it was parked, despite a company policy. The driver of the truck gave inconsistent testimony about how long he had been parked.
As the trial neared its conclusion, AGLIC's case manager told Ace that due to the weight of evidence, a verdict of more than $ 2 million was possible. A defense attorney suggested that the carrier would settle for that amount. Nevertheless, Ace declined when, after the case went to jury, the Braswells offered to settle for $ 2 million.
The jury ruled in favor of the Braswells and awarded damages of $ 39.96 million, but deducted 32% to reflect Mark Braswell's share of liability for the accident. The family later accepted a $ 9.75 million settlement to avoid appeal, the court said. AGLIC paid $ 7.75 million of that, plus $ 50,000 for a replacement government bond to protect Brickman on appeal.
AGLIC has filed suit against Ace to get that money back.
The US District Court in Houston ruled in favor of AGLIC and awarded AGLIC $ 7,935,034.33 in damages. Judge Keith P. Ellison wrote in his findings and conclusions of the act Ace's primary interest was to settle the matter below primary policy limits. He said the insurer rejected the advice of experts who warned that most South Texas juries would be reluctant to find a firefighter captain to blame for such an accident.
Ace said the evidence at trial "increases the known sympathy factor and the attendant chance of major soft damage."
Thus, a reasonable insurer would have determined that a bid at the top end of the original range proposed by counsel was correct given the greater possibility of a verdict well in excess of $ 2 million, Ellison's findings said.
On appeal, the 5th Circuit panel rejected Ace's arguments that it was not required to accept the settlement offer, as it was not clear whether Michelle Braswell would fairly share the settlement with her children, a circumstance that some Texas- courts had persuaded to refuse to accept settlements. The court said Ace had failed to bring up that "new legal theory" at trial, so it was not allowed to use him on appeal.
“The evidence presented to the district court is sufficient to support that Ace has violated his Stowers duty by not re-evaluating the settlement value of the case and accepting Braswells' reasonable offer,” concludes the 5th Circuit's decision. .
The verdict is: American Guarantee and Liability Insurance Co. ACE American Insurance Co.