In case you still had some faith remaining, post-2008, that big financial institutions have your best interests at heart, or that insurance companies are motivated first and foremost by a desire to serve their policyholders, or that they will even honor their contractual obligations, Matt Fisher is here to set you straight.
Matt is a New York-based comedian and blogger. He had the great misfortune, two years ago, to lose his younger sister Katie in a car accident. And now he’s been subjected to a legal ordeal that would make even Franz Kafka’s head swim.
To all appearances, the case involving Katie’s death was pretty much open-and-shut. She was driving on a Baltimore street and had stopped at a red light. When the light turned green, she proceeded to cross the intersection. Another car ran the light and slammed into her. The driver’s insurance company, Nationwide, tacitly admitted fault and agreed to settle right away. For most people, this is the very definition of a no-brainer.
For most people. But then most people aren’t lawyers for huge insurance firms.
The difficulty arises from the fact that the other driver was underinsured, and that Katie had taken out a policy with Progressive (NYSE:PGR) that protected her against the possibility of an accident with an underinsured motorist. When Matt’s family tried to get the insurance giant to make up the difference in the value of his sister’s policy — i.e. to make good on the contract for which Katie had been spending her hard-earned money, i.e. to obey the law — Progressive said no way.
Now this in itself is perhaps not surprising, especially for many Americans who have had the misfortune to find themselves obligated to squeeze money out of the stone that is the heart of a large insurance company. What is surprising, or rather horrifying, is the series of barriers that Matt’s family then found between themselves and justice.
First off, they found that Maryland law prohibits clients from suing an insurance firm for non-payment on a policy. This probably comes as no shock in a post-AIG (NYSE:AIG) world. Second, they found that if they wanted some semblance of fairness, they’d have to bring a civil suit against the other driver (which they really didn’t want to do) as a way of gaining legal leverage and so hopefully getting Progressive to pay up. Third, they found that Progressive was willing to stoop to anything, anything, to avoid doing the right thing.
What does “anything” mean? Well, ordinarily insurance companies pay their lawyers to crucify those who are on the opposing team, which is to say, those who have caused accidents that the companies’ clients are not responsible for. But this wasn’t what Progressive did. Instead, they actually took sides against their own client and offered legal counsel to their opponent, namely the underinsured driver.
At the trial, the guy who killed my sister was defended by Progressive’s legal team.
At the beginning of the trial on Monday, August 6th, an attorney identified himself as Jeffrey R. Moffat and stated that he worked for Progressive Advanced Insurance Company. He then sat next to the defendant. During the trial, both in and out of the courtroom, he conferred with the defendant. He gave an opening statement to the jury, in which he proposed the idea that the defendant should not be found negligent in the case. He cross-examined the plaintiff’s witnesses. On direct examination, he questioned all of the defense’s witnesses. He made objections on behalf of the defendant, and he was a party to the argument of all of the objections heard in the case. After all of the witnesses had been called, he stood before the jury and gave a closing argument, in which he argued that my sister was responsible for the accident that killed her, and that the jury should not decide that the defendant was negligent.
I am comfortable characterizing this as a legal defense.
Aside from the baroque legal issues this “defense” raises — if Katie was in fact responsible for the accident, then wouldn’t the underinsured motorist have the right to sue Progressive for his damages? — it really adds another twist of the knife for Matt’s family. But even then, Progressive wasn’t done with the Fishers.