By: Newton Anderson
According to several recent online reports in the Tampa Bay Times, 29-year-old Ricky Melendez was driving to his job as a dairy manager at a grocery store in the early morning on Sunday, August 6, 2017, when an SUV ran a red light and crashed into his Toyota Camry.
But this was no ordinary red-light accident. The SUV, which had been stolen three days previously was occupied by four teenagers who had apparently been smoking marijuana and had committed several burglaries that night. Then, at about 1 AM on Sunday, a deputy sheriff recognized the SUV’s license plate from a “hot sheet” listing stolen vehicles.
As the deputy was following the SUV, as well as another stolen car occupied by two teenage friends of those in the car, had turned off all its lights and accelerated. The deputy did not give chase but called for assistance. By the time the car entered the intersection where the collision with Melendez’s Camry took place, it was traveling at 112 miles per hour. They then hit five parked cars at an auto dealership, flipped through the air, collided with a billboard pole 10 feet above the ground, spiraled into more cars, came to rest, and ignited into flames.
Three of the teens in the SUV died and only a passenger who had been ejected survived. Mr. Melendez received several broken bones but was expected to recover from his physical injuries. However, his car was totaled, and, according to his attorney, Mark Roman of Roman & Gaynor, his medical bills exceed $100,000.
As a group, the six teenagers had already gone to juvenile detention a total of 43 times and had a total of 126 arrests among them, including prior arrests for auto theft.
Ricky Melendez was insured by GEICO, but his policy limits were only $20,000. There are doubts about any insurance that would be available to the driver of the stolen SUV. Even if liability insurance were in place, coverage would obviously be highly unlikely.
Sheriff Bob Gualtieri was reported to have complained about the plague of juvenile car thefts in his jurisdiction and that the juvenile system rarely holds an underage offender for very long.
However, this blog post is not about the juvenile justice system or the lack of any likelihood that Ricky Melendez would be able to be compensated for his personal injury and property damage. Although clearly a significant accident under troubling circumstances with tragic results, the reason that this event has been covered so fully by the Tampa Bay Times and in other Internet posts stems from the fact that GEICO appears to have reached out to the families of the boys in the stolen SUV.
They paid out Mr. Melendez’s full liability limits of $20,000 in exchange for a release of any claims against him. There was no record of any suit being filed against Melendez and Roman was quoted in the newspaper’s online series as saying “I don’t think there’s a lawyer in Florida who would have ever pursued a claim against Ricky.”
Of course, this raises several questions. The state of Florida has adopted a pure comparative negligence standard. Even 1% fault attributed to Ricky Melendez would result in a judgment against him, and with three deaths and another serious injury, the total damages, even if limited to 1%, may very well exceed his $20,000 limits of coverage. GEICO’s policy likely gives them the absolute right to settle cases as they see fit and they have obviously protected their insured from a possible lawsuit, as remote as that seems at this time.
On the other hand, the policy surely provides that it has a duty to defend its insured. Does an insured have a right to be defended from allegations made in a suit that most would agree would be completely frivolous? Does the insured have a right to not have the payment of a claim as a part of his loss experience when full liability on the other driver seems abundantly clear? Is GEICO’s desire to avoid litigation costs (assuming that was one of its considerations) allowed to trump whatever rights the insured may have because of GEICO’S right to settle and does a payment such as this one generate additional frivolous claims in the future?
This is an extreme example of a settlement of the type that has spawned numerous debates over the years and GEICO’s decision, in this case, is obviously not necessarily representative of the liability insurance industry as a whole. I feel certain that there are many carriers that would have made the opposite decision.
Having accepted referrals from liability insurance companies for over 35 years, and having seen cases being settled or tried when my personal opinion was to the contrary, I know that no one has a crystal ball, neither my clients nor I. The use of sound judgment by reasonable, experienced, and prudent individuals does not always result in the same decision. But, at least from my perspective as defense counsel, it would have been troubling to have been involved with the payment made by GEICO in this case.
Newton Anderson is the Managing Member in the Memphis office and focuses on Litigation (Business and Commercial, Employment Practices, Insurance Coverage, Insurance Defense, and Real Estate), Liability (Automobile, Premises, and Products), Alternative Dispute Resolution, Corporate and Business, Insurance Subrogation and Workers’ Compensation law.
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