New Jersey Lawyer
OH, YEAH, ALLSTATE, WE'LL TAKE IT TO THE JURYDana Coleman One of the state's major insurers may be getting tough by making take-it-or- leave-it offers to plaintiffs' lawyers, but attorneys have their own plans to play hardball with Allstate New Jersey Insurance Co. Gerald H. Baker of Hoboken scoffed at Allstate's recently announced its plan to make one offer to settle and if that offer is rejected to go to trial. Unless the offer is truly reasonable and meets the insured's policy limits, Baker said he won't settle. In fact, if he meets Allstate's attorneys on the courthouse steps and they make the so-called take-it-or-leave-it offer, he'll tell them to leave it and let the jury decide. And he suggests other attorneys do the same. "If it gets to trial and they offer the policy limit on the courthouse steps ... I say the hell with it, we're going to go after them," Baker said. Under Allstate's initiative, which began in September, the insurer makes its best offer right away to settle cases involving soft-tissue injuries after investigating and evaluating the case. Unless new information arises, the Bridgewater-based insurer will not negotiate further said, the insurer's counsel, Edward T. Collins. The insurer said the purpose of the program is to avoid settling cases on the courthouse steps, which ultimately saves time and deters plaintiffs' lawyers from making excessive demands. The ultimate result is a decrease in insurance costs, Allstate said. The Allstate policy differs from earlier procedures since the insurer gets right on the money to determine quickly whether a settlement will be accepted. Previously, the company might make a lower offer and up it as the insurer and attorney negotiate. Hackensack plaintiffs' attorney Donald A. Caminiti said the insurer eventually might change its new policy. "If they act in bad faith, they will pay for it," Caminiti said. "I think this policy is a bad one and given some time, they're going to see it's a bad policy. They should deal in good faith on behalf of their insureds." More liability for insurer
Baker, a plaintiffs' lawyer who often deals with Allstate, also noted the insurer could be opening itself up to even more liability.Any time Baker has a case with Allstate, he plans to take a two-prong approach toward settlement that will expose Allstate to even higher risk. And he recommends other attorneys do the same. First, Baker plans to send the insurer a Rova Farms v. Investors Insurance Co. letter. The letter puts the insurance company on notice the plaintiff is willing to settle the case for the policy limit. The state Supreme Court in Rova Farms held an insurance company has an obligation to negotiate in good faith on behalf of an insured and a fiduciary obligation to put the insured's interest above the company's, Baker noted. Otherwise, if a jury returns a verdict greater than the policy limit, the insurance company will be responsible to pay not only the policy limit, but the amount of the verdict above that limit. Allstate has a reputation for offering low settlements before trial and coming up with its best offer at trial, Baker said. He doesn't see that changing, he added. "Historically I don't expect them to offer a fair amount because they never did," Baker said. "If [the offer is] not fair, the plaintiffs should file a Rova Farms letter, thereby increasing the risk to Allstate that they would end up having to pay the entire verdict above the policy limit." If a jury does return a higher verdict, Allstate would have the burden to prove it negotiated in good faith so it would not be responsible for the entire verdict above the policy limits, Baker said. "[Allstate] says no negotiating on the courthouse steps. I say good," Baker said. "If I get a judgment that exceeds the policy limit, we're going to go after [them]." Offer of judgment
Baker's second step would be to file an offer of judgment with the court, pursuant to Rule 4:58 as amended Sept. 1, 1996. The rule states a plaintiff must submit a settlement offer for a specific amount.If the insurance company does not accept the offer and the claimant receives a verdict at least as high as the rejected offer, the plaintiff would recover not only damages but reasonable attorney fees and costs, including 8 percent interest from the date of the offer. Otherwise, a winning plain-tiff receives only prejudgment interest. "I love it. I hope they do it all the time. I'll file my offers and Rova Farms letters until they collapse," Baker said. "I don't want to settle. They want to play take it or leave it? I say increase the risk." |
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