Confidential
Settlement – $100,000Judge
Court
Orange Superior
Attorneys
Plaintiff
Facts
On July 6, 2000, the plaintiff was injured in an auto accident in the City of Santa Ana. The vehicle in which she was a passenger was hit in an intersection by a third vehicle (underinsured) who had entered the intersection against a red traffic signal. The plaintiff's initial counsel filed a lawsuit against the driver of the vehicle which hit the vehicle in which the plaintiff was riding. The driver of the vehicle in which the plaintiff was a passenger had previously filed suit against the same third party. Both suits were consolidated into the earlier-filed lawsuit. The plaintiff's initial counsel, however, never effected service of the Summons and Complaint upon the third-party defendant. Two days before the hearing of a Continued Evaluation Conference (regarding the entire consolidated action), the plaintiff's initial counsel requested that she sign a Substitution of Attorney and advised her to "go find another attorney." At the continued Evaluation Conference, after hearing that the plaintiff was then appearing in propia persona and that the third-party defendant had never been served, the trial judge set a further Status Conference and an Order to Show Cause Re Dismissal of the Complaint for failure to serve the defendant. The plaintiff immediately sought other counsel who served personal service upon the defendant. After service had been effected, the Order to Show cause was taken off calendar averting the dismissal of the plaintiff's underlying lawsuit. Although required by law to release their claim against the plaintiff's settlement proceeds following dismissal of their client without cause, and although they had orally agreed to do so, the plaintiff's initial counsel did not furnish a written confirmation, despite numerous requests by the plaintiff through her new counsel. These requests were ignored. More than six months after terminating their attorney-client relationship, the plaintiff's initial counsel wrote to the plaintiff's new counsel and advised that they would not release their claim against the plaintiff's settlement proceeds and would in fact assert a lien against any such settlement. Although a tentative settlement had been reached, for the full policy limits of the third-party defendant's liability policy, the third-party defendant's counsel would not release the settlement funds to the plaintiff until her former attorneys released their lien. The plaintiff's new counsel corresponded several more times with the plaintiff's former counsel, each time addressing the mistaken reasons that they asserted for withholding their release of their lien, but to no avail. Each time her former counsel responded with aggressive threats and continued refusal to release their lien. The plaintiff was constrained to file a Complaint for Declaratory Relief against her former counsel. Shortly after receipt of the Summons and Complaint for Declaratory Relief, her former counsel executed a release of lien. The case against the third-party motorist was settled immediately thereafter for the full policy limit of $25,000. The plaintiff then began further discussions with her underinsured motorist carrier for the portion of her coverage above $25,000. The UIM carrier offered $15,000 new money to settle the plaintiff's claim notwithstanding the plaintiff had incurred and submitted $54,358 in medical bills as well as documenting wage loss of approximately $16,608. The plaintiff's carrier refused to comply with specific written requests to tender payment of the undisputed portion of the plaintiff's claim in accordance with California Code of Regulations (Fair Claims Settlement Practices Regulations, Standards for Prompt, Fair and Equitable Settlements), Title 10, Chapter 5, Subchapter 7.5 Section 2695.7(h). The matter was ultimately referred to house counsel to initiate and defend a binding arbitration of the UIM claim.
Other Information
After further examination, the plaintiff's carrier tendered an offer for the full policy limits of $75,000. The insurance bad faith claim is pending.
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