Distracted Driving – A Major Problem

September 17th, 2015

Authorities say distracted driving is to blame for a jump in wrecks involving stopped vehicles on Interstate 85 in South Carolina.

The Office of Highway Safety and Justice Programs told the Greenville News that 408 accidents on I-85 have involved a stopped vehicle so far this year, compared to 314 at the same time last year.

Ten people have died in South Carolina so far this year in 1,794 accidents on I-85, compared to four deaths over the same period last year.

Cpl. William T. Rhyne is a spokesman for the state Highway Patrol who commutes daily on the interstate. He says the problem isn’t that vehicles are stopped but that other drivers are too distracted to see the congestion in time to avoid an accident.

Drone Laws – Interesting New Law

August 3rd, 2015

The new Florida drone privacy law could have some unintended consequences for insurers looking to use or insure unmanned aircraft systems (UAM) technology.

The Freedom from Unwarranted Surveillance Act (FUSA), which took effect in Florida July 1, prohibits a person, state agency or political subdivision from using a drone to capture an image of privately owned property or those on the property – including an owner, occupant or invitee – with the intent to conduct surveillance.

The law, signed by Gov. Rick Scott in May, further requires that those using drone technology in such a manner must have written consent from the people on the property under surveillance if a reasonable expectation of privacy exists.

The law applies to law enforcement and private individuals and was intended to go along with Florida’s 2013 law that requires police to obtain a warrant to use drones to collect evidence, according to the Electronic Privacy Information Center (EPIC).

The new FUSA law does allow exceptions for the use of a drone by a person or entity engaged in a business or profession licensed by the state in certain circumstances. However, this exception does not apply to a profession in which the authorized scope of practice includes obtaining information about the identity, habits, conduct, movements, whereabouts, affiliations, associations, transactions, reputation, or character of any society, person or group of persons.

One of the most important stipulations of the law is that individuals who feel their privacy has been violated under the terms of the law may now sue for civil damages and injunctive relief and be awarded attorneys’ fees if they are successful.

That could end up being costly, says Matt Grosack, a Miami-based attorney with DLA Piper.

“There are a lot of litigators out there that predict this could inspire a new wave of litigation,” he says.

But even where privacy laws like Florida’s are in place, insurance companies are interested in using drone technology. Major insurers including State Farm, AIG, Liberty Mutual and USAA have received approval from the Federal Aviation Administration (FAA) to test the use of drones for their businesses.

Insurers aren’t the only interested parties. A Munich Re survey of risk managers estimated that almost 40 percent of businesses could be using drones in fewer than five years. Insurers do not want to miss the opportunity and are developing insurance products for drone operators even though the Federal Aviation Administration (FAA) has not issued final government regulations and is not expected to do so until next spring.

The FAA has eased its permit process and is now approving an average of 250 permits a month for commercial drone experiments, according to Bloomberg News.

ISO has come out with coverage and exclusion options for insurers to use in developing insurance programs for businesses that may use drones. ProSight Specialty Insurance has developed an insurance product for drone operations in filming, rental, events, agriculture and non-flight related exposures. AIG offers coverage that includes physical damage and liability. Brokers and agencies specializing in the risk include Transport Risk Management Services, Costello Insurance, and Unmanned Risk Management.

“The application of drone use in the insurance industry is a real boon for the industry as a whole, assuming they follow the proper FAA guidelines,” said Grosack.

State Farm spokesperson for Florida, Michal Brower, says the company believes its FAA approval to use drones for roof inspections and research and development purposes (including catastrophe response) is in compliance with Florida’s new privacy law.
“We believe these uses are consistent with what is allowed under the Florida law. State Farm considers customer privacy one of our top priorities, and our use of this technology will adhere to all applicable laws and regulations to ensure consumer privacy protections are in place,” she wrote in an e-mail to Insurance Journal.

Some in the industry are concerned that regulators may become too restrictive rather than see the potential benefits of drone technology.

“We are hopeful lawmakers [in Florida] will see the value in how drones, when used properly, can improve safety by not sending people into very hazardous environments and assist insurers in meeting consumer needs by quickly assessing damage after a significant weather event, especially in hurricane prone states such as Florida,” Property Casualty Insurers’ (PCI) Director of Personal Lines Policy Chris Hackett said in an e-mail statement to Insurance Journal.

State Farm acknowledges the benefit on the business side as well.

“The use of this technology in the insurance industry is in its infancy, but we believe it has the promise of improving customer experience in several applications – from remote roof inspections to surveying damage after a catastrophe,” said Brower.

Industry Hurdles, Opportunities

The insurance industry is approaching the drone market with caution.

The companies that offer insurance policies for drone use currently exclude privacy claims, according to Grosack, and he expects insurers will need more data before that changes and policies become broader.

“Right now, we are looking at an immature market,” he says. “I think the insurance industry needs data to see exposure and determine if they want to insure it. But on the whole insurance companies think this could be a huge market in the future.”

However, in the development of products and in their own usage of drones, insurers will face the potential of violating state laws such as Florida’s. Nearly all states have considered some kind of drone legislation at this point and several others have enacted privacy-related laws, including Idaho, North Carolina, Oregon, Tennessee, Texas, and Wisconsin, according to The Washington Post.

The U.S. Congress has also introduced the Drone Aircraft Privacy & Transparency Act, which if eventually passed could trump any state privacy laws.

“The insurance industry is all about managing risk and the moral of the story is think before you snap that picture – be very mindful of what picture you are taking because it could inadvertently be a liability,” Grosack said. “Instead, identify the use of drone technology in the insurance policy and let the insured know they may be filmed during the adjustment process.”

Florida’s FUSA doesn’t differentiate if a drone is used for commercial or personal purposes.

“It’s just the use of a drone – so does it fall under personal policy, commercial policy? Are insurance companies excluding these intentional acts? I think right now yes, they are,” said Grosack. “Whether that changes in the future I am not sure.”

Case law in regards to drones will be especially important to the insurance industry, Grosack added. It still remains to be seen how Florida courts will interpret FUSA as no litigation has come up, yet.

“As with any new law that comes out, we are operating in a vacuum right now. When you are looking at [legislation] from a litigation perspective, you are looking at it through the lens of ‘how will the court see this?’ But we don’t know that yet because there aren’t any cases,” he said.

In the meantime, those in the industry hope Florida regulators won’t completely shut the door on drone technology.

“We look forward to continuing the dialogue with Florida policymakers to develop regulations that will ensure privacy concerns are addressed while enabling insurers to benefit consumers by using the latest technological developments,” PCI’s Hackett said.

Great Article from Burford Capital

August 3rd, 2015

By Jack Blackburn | July 29, 2015

Attorneys ask me all the time, “How do I choose the right lender?”

It’s a serious question. Inevitably, as I think about how to respond, I find myself wanting to draw analogies to the kinds of things we’re all used to when forging personal relationships. Of course, a law firm choosing the right lender is not exactly like finding a life partner or friend—but arguably, some of the same lessons apply.

On the one hand, the answer to finding the right lender is simple: just find the bank or specialized lender that can give you the best rate for the amount of capital your firm needs. (If only the rest of life were that easy.) But on the other hand, the answer isn’t that straightforward: you also have to consider the unique needs of your firm, not to mention your business values, so you can’t choose based on numbers alone.

So here are three lessons that apply to choosing the right lender:

#1. There has to be a good fit of needs and interests

Regardless of the truism that opposites attract, most people instinctually know better than to get involved in a relationship with someone whose needs and interests just don’t fit their own. The same is true of choosing a lender. Many lenders have repayment schedules and terms that may not synch with yours as a plaintiffs’ attorney. For example:

Many lenders have strict monthly repayment terms—and those terms just won’t work for you if your schedule needs to be determined by the timing of your cases.
Many lenders require your loan to be repaid in full at the end of your loan term, and again, don’t allow for schedules determined by when cases settle or pay out.
For the most part, retail banks require monthly repayment and completion of the loan at the end of the term; specialized lenders are more flexible.
#2. Trust is paramount

As in life, in business no relationship can work without trust. As a plaintiffs’ attorney, you make an ethical commitment to serving your client, one that requires you to ensure that necessary financial resources are in place to pursue the case. Choose your lender wisely, as you’ll be relying on this third party to help you fulfill your responsibilities and client commitments. Here are some of the things you can consider:

Do you know where your lender’s money comes from? If you are working with a bank or a publicly traded entity, that information is a matter of public record.
What is your lender’s reputation? Do the organization and its leaders have track records of operating at the highest professional and ethical standards? If there is reason to suspect the lender you’re considering has anything less, you need to keep looking.
#3. You need to be able to grow together

Personal relationships endure when people grow together—and the same is true of business partners. As you assess your options, you need to know that your lending partner has the ability to grow with you and your business, and to respond quickly when you need help fast. Some of the considerations are:

Does the lender have loan caps? Most traditional bank and some specialty lenders have loan limits or loan caps; after that, you’re looking for gap funding. Specialized lenders like Burford—which does not have loan caps—are able to grow with the changing needs of your business.
Does the lender have its own capital or will it need to borrow to give you a loan? If the former, you know that you’ll be able to get a loan decision quickly; if the latter, the odds are that you’ll have to wait without certainty that the loan will go through.
Hopefully that gives you a clear sense of some of the criteria you can use to choose a lender.

But what if you’ve already chosen a lender—and you’re having some remorse? The good news is, as in life, you can move on from a bad business relationship to a better one. Lenders are happy to talk with you about re-financing and are often willing to do more to win your business.


July 29th, 2015

Amtrak recently reached a settlement with its primary insurers in a lawsuit in which the railroad operator sought to recoup additional proceeds for Superstorm Sandy losses from its insurers, according to court documents. Terms of the settlement were not disclosed in court papers.

According to an order signed on July 2 by U.S. District Judge Jed Rakoff from the U.S. District Court of Southern District of New York, the parties to the case have agreed to dismiss with prejudice and without costs or interest several primary insurance company defendants including Arch Specialty Insurance, Federal Insurance Company, Liberty Mutual Fire Insurance, Maxum Indemnity and Navigators Insurance.

Amtrak filed the lawsuit last September against more than a dozen insurers. Amtrak said at the time that it sued its insurers for their alleged failure to stand by the policy terms for the significant property damage that followed Sandy. The railroad operator had more than two dozen first-party all risk property policies in total from insurers, the lawsuit said.

The October 2012 storm had a substantial impact on critical Amtrak infrastructure in and around New York City, including inundating with saltwater both the Hudson River tunnel and the East River tunnel.

The settlement follows the court’s earlier ruling on June 24 that sided with the insurers’ argument. The court found that the storm surge inundation of Amtrak’s property in the aftermath of Sandy falls within the unambiguous scope of the definition of “flood” in the insurance policies at issue, in contrast to Amtrak’s argument that storm surge and flood were separate perils.

The court also ruled that Amtrak did not suffer “ensuing loss” and that Amtrak’s losses arose from a single “occurrence” as defined by the policies at issue, in contrast to Amtrak’s stance that losses were caused by multiple events and damage caused by salt in seawater were separate, ensuing loss.

The court’s decision limits Amtrak’s Sandy property loss coverage to the $125 million per occurrence flood sub-limit. Accordingly, the court granted defendants’ motion for summary judgment with respect to the application of the policies’ flood and occurrence provisions and dismissed from the suit several insurers in excess layers above the $125 million flood sub-limit.

The excess insurers that were dismissed in last month’s ruling included Commonwealth Insurance Company, Maiden Specialty, Partner Reinsurance Europe plc, Steadfast Insurance, Torus Specialty and Westport Insurance, according to court documents.

The court said a memorandum explaining the reasons for these rulings would be issued in due course. Amtrak has indicated that it will appeal the dismissal of excess insurers.

“We are very pleased to have resolved our lawsuit with the primary insurance companies,” Amtrak spokesman Craig Schulz told Insurance Journal.

“Next, Amtrak will seek an appeal of the dismissal of the excess insurance companies by the district court. If the appeal is successful, we will prosecute Amtrak’s remaining claims against the excess carriers. We look forward to the appeal,” Schulz said.

The case is National Railroad Passenger Corp. v. Arch Specialty Insurance Co. et al., No.:2014-cv-07510, U.S. District Court for the Southern District of New York.

New York Workers Comp Increase

July 29th, 2015

The New York State Department of Financial Services (NYDFS) has approved an average 5.9 percent increase in workers’ compensation loss costs for new and renewal business to become effective on Oct. 1, 2015. The approval was announced by the New York Compensation Insurance Rating Board (NYCIRB) in a bulletin today.

NYCIRB said loss costs by classification will be published in a subsequent bulletin and posted on its website no later than Aug. 1. NYCIRB submitted its loss cost filing to NYDFS on May 12.

Commenting on the approved loss cost increase, NYCIRB Vice President and Chief Actuary Ziv Kimmel told Insurance Journal that “the increase in the loss cost level is needed in order to keep pace with increasing indemnity and medical costs in the state.”

NYCIRB is a non-profit, unincorporated association of insurance carriers, including the State Insurance Fund. In conjunction with the New York workers’ compensation law, the insurance law provides for the superintendent of insurance to designate a rate service organization to collect the loss, premium and payroll data from each carrier, summarize this information and develop an adequate rate structure. Since the enactment of New York workers’ compensation law in 1914, NYCIRB has been licensed as the official organization for this purpose.

Nice Compliment from a Satisfied Client

July 29th, 2015

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Extremely satisfied.

Always nice to hear from a happy client who I am glad we could help out. Call us today if you need any assistance.


Man given Settlement of $6.25 for False Imprisonment

July 9th, 2015

New York City has agreed to pay $6.25 million to a man who spent nearly 25 years in prison before being exonerated in a killing that happened while he was more than 1,000 miles away vacationing at Disney World, the city comptroller said Tuesday.

Comptroller Scott Stringer said settling Jonathan Fleming’s claim is “in the best interest of all parties.”

“We cannot give back the time that he served, but the city of New York can offer Jonathan Fleming this compensation for the injustice that was committed against him,” Stringer said.

Fleming was released last year after the Brooklyn district attorney’s office said it had come to agree that his alibi — which he offered from the start — was valid.

His lawyers praised the city for moving expeditiously to settle with Fleming, who filed notice last year that he planned to sue for $162 million.

“The swift settlement will enable Jonathan and his family to build a new life without the painful and costly prospect of further litigation” with the city, attorneys Paul Callan and Martin Edelman said. He still has an unresolved claim against the state.

But Fleming’s relief was streaked with sadness: Shortly after signing the settlement documents, Fleming, 53, went to a hospital where his mother was near death, his lawyers said.

Her only son was behind bars for nearly half his life, convicted of shooting a friend in Brooklyn in August 1989, though he had told authorities he was in Orlando, Florida, at the time and had plane tickets, videos and other material to show it. A woman testified that she had seen him commit the crime.

But then that eyewitness recanted, newly found witnesses implicated someone else and prosecutors’ review of authorities’ files turned up documents backing Fleming’s alibi. That evidence included an Orlando hotel receipt he paid about five hours before the shooting and had in his pocket when arrested. Authorities had never given his defense that receipt or a 1989 Orlando police letter telling New York detectives that some employees at the hotel remembered Fleming.

“No amount of money will ever give him back that time” he unjustly served, Brooklyn District Attorney Kenneth Thompson said Tuesday.

While the city has a legal department that fields lawsuits, the comptroller also can settle claims. Stringer has made a point of doing that in civil rights cases, saying that resolving them quickly saves the city money on legal fees.

He reached a $6.4 million settlement with a man exonerated in the 1990 killing of a rabbi; agreed to a $2.25 million payout to the family of a mentally ill inmate who died in a Rikers Island jail cell that sweltered to 101 degrees because of a malfunctioning heating system; and helped put together a $17 million settlement in the case of three half brothers who spent a combined 60 years in prison before their convictions were thrown out.

BP Lawsuit Details

July 9th, 2015

BP Plc’s record $18.7 billion settlement ended government claims over the 2010 Gulf of Mexico oil spill, leaving numerous smaller private lawsuits to be mopped up.

While investors, residents and businesses that didn’t join a 2012 settlement still demand billions, BP’s biggest threats are gone, said Anthony Sabino, a law professor at St. John’s University in New York who specializes in complex litigation.

The U.S. and the states, partly because of political motivations, “were, by far, the most tenacious adversaries,” he said in an e-mail.

“Private parties think only in terms of cold hard, cash,” so the remaining claims will be easier to resolve, Sabino said. “Put enough on the table and they go away.”

The Macondo well exploded in April 2010, burning and sinking the Deepwater Horizon drilling rig and setting off the biggest offshore spill in U.S. history. Eleven men died aboard the rig and crude spewed from the sea floor for weeks.

The accident sparked thousands of lawsuits against BP, as well as Transocean Ltd., the rig’s owner, and Halliburton Co., which provided cementing services for the project. BP’s predicament got worse as falling oil prices cut first-quarter revenue by 41 percent from a year earlier, to $54.2 billion.

Largest Deal

Thursday’s settlement was the largest of BP’s agreements since the spill. The London-based company agreed in 2012 to plead guilty and pay the government $4 billion to resolve a criminal case. BP also agreed that year to pay another $525 million over allegations it initially understated the size of the spill.

Also in 2012, the company reached an estimated $10.3 billion settlement with most Gulf area residents and businesses harmed by the spill. That deal will probably cost “significantly” more because it doesn’t reflect claims that haven’t been fully processed, the company said in an April regulatory filing.

The settlement didn’t cover banks, casinos, insurance companies and businesses or residents in large swaths of Texas and Florida. It also didn’t include shareholders or businesses blaming BP for the Obama administration’s moratorium on deep- water drilling in the gulf after the spill.

Those claims remain, as do the suits by residents and businesses that opted out of the 2012 settlement.

Spill Cost

On Thursday, BP increased the amount set aside to pay for the spill to $53.8 billion. That still may not be enough.

“It’s realistic to price BP’s total cost, including all remaining claims that haven’t been covered by settlements, at $70 billion,” said David Berg, a Houston trial lawyer who has tracked the BP spill litigation and isn’t involved in it.

None of the claims have gone before a jury, and investors may get the first chance if their securities-fraud lawsuit claiming BP downplayed the disaster goes to trial Jan. 11 in Houston.

The class action covers investors who bought BP’s U.S. shares from April 26, 2010 — six days after the blowout — to May 28, 2010. BP will ask the U.S. Court of Appeals in New Orleans on July 9 to block them from suing as a group, which could derail or delay the case. Investors are seeking as much as $2.5 billion, according to BP court filings.

U.S. District Judge Carl Barbier in New Orleans — who presided over the pollution fine case BP just settled — will oversee a non-jury test trial, still unscheduled, on lawsuits by businesses alleging BP is responsible for losses caused by the drilling moratorium.

Test Trial

One party in the test trial is the successor to Seahawk Drilling and claims the business was “essentially destroyed” and forced into bankruptcy. Seahawk alleges losses of $174.8 million. If the test cases prevail, there could be millions of dollars more in claims from firms including Marathon Oil Co., which seeks $47 million for lost offshore production, and Vantage Drilling Co., which is claiming $265 million for increased financing costs tied to projects delayed by the offshore ban.

BP denies responsibility for those losses because the U.S. government ordered and extended the drilling ban for months. That defense may reduce any damages.

Claims by others left out of the settlement may be a “tough sell to a judge or jury,” Sabino said.

Given Thursday’s settlement as a benchmark,“the dominoes will fall” and the others will probably settle, he said.

Strip Club Suit

July 9th, 2015

A company that owns strip clubs in Florida and Ohio has reached a $6 million settlement in a class action lawsuit led by a former exotic dancer.

Under the terms of the settlement approved by a federal judge this week, women who worked at Scarlett’s Cabaret clubs in Hallandale Beach, Tampa, Fort Myers and Toledo, Ohio, could be entitled to back wages.

Adonay Encarnacion sued the clubs last year over labor violations. She told The Miami Herald that online business classes helped her realize that the Hallandale Beach club was violating her rights by not offering hourly pay and requiring dancers to pay performance fees as independent contractors.

The settlement doesn’t compel Scarlett’s Cabaret’s owners to change their labor practices. The clubs’ corporate officers and attorneys declined comment.

Intersting Case Against RoboCalls

July 9th, 2015

Many people dislike receiving robocalls. Araceli King disliked receiving 153 of them from a single company.

Time Warner Cable Inc. must pay the insurance claims specialist $229,500 for placing 153 automated calls meant for someone else to her cellphone in less than a year, even after she told it to stop, a Manhattan federal judge ruled on Tuesday.

King, of Irving, Texas, accused Time Warner Cable of harassing her by leaving messages for Luiz Perez, who once held her cellphone number, even after she made clear who she was in a seven-minute discussion with a company representative.

The calls were made through an “interactive voice response” system meant for customers who were late paying bills.

Time Warner Cable countered that it was not liable to King under the federal Telephone Consumer Protection Act, a law meant to curb robocall and telemarketing abuses, because it believed it was calling Perez, who had consented to the calls.

But in awarding triple damages of $1,500 per call for willfully violating that law, U.S. District Judge Alvin Hellerstein said “a responsible business” would have tried harder to find Perez and address the problem.

He also said 74 of the calls had been placed after King sued in March 2014, and that it was “incredible” to believe Time Warner Cable when it said it still did not know she objected.

“Defendant harassed plaintiff with robo-calls until she had to resort to a lawsuit to make the calls stop, and even then TWC could not be bothered to update the information in its IVR system,” Hellerstein wrote.

The last 74 calls, he added, were “particularly egregious violations of the TCPA and indicate that TWC simply did not take this lawsuit seriously.”

A trial had been scheduled for July 27. Time Warner Cable spokeswoman Susan Leepson said the New York-based company is reviewing the decision.

“Companies are using computers to dial phone numbers,” King’s lawyer Sergei Lemberg said in a phone interview. “They benefit from efficiency, but there is a cost when they make people’s lives miserable. This was one such case.”

Charter Communications Inc. agreed in May to buy Time Warner Cable for $56 billion. The merger has yet to close.

The case is King v Time Warner Cable, U.S. District Court, Southern District of New York, No. 14-02018.