What is PIP Insurance Coverage - and How Insurance Companies Just Lost Their Latest Try at Getting Florida to Gut PIP Coverage

Personal Injury Protection, or "PIP" coverage, is something offered to Floridians as part of their automobile insurance policy. Right now, under Florida law, every car owner and driver must have at least $10,000 PIP coverage.

If you are in a car accident in Florida, this PIP coverage kicks in, never asking who's to blame. The $10,000 coverage is there, ready to help. Since the insurance company isn't allowed to assess blame here, Florida is called a "no fault" state.

PIP will cover up to 80% of your medical bills and up to 60% of your lost wages - up to that $10,000 cap. No questions asked.

Insurance companies are against PIP coverage because they are arguing that too many people take advantage of it, setting up fake insurance claims just to get the money. We've discussed this before; now, however, Tampa's Fox 13 Investigative Reporter has just published its own expose on PIP coverage fraud, which may help drive those pushing the legislature for change in the future.

Florida is No. 1 in the USA for Fraud PIP Claims

According to Tampa Bay reporter Doug Smith, Florida is actually number 1 in the United States for these kinds of fraud -- and Tampa is tops within the state for filing fake PIP claims.

According to the Fox story, many of these fake PIP claims are professional jobs where there are staged wrecks and clinics are set up to handle the filings. The crashes are set up to have lots of folk involved, so that $10,000 cap can be milked. Eight people can mean close to $80,000 from one scam. The news story goes on to interview those in the know, including police detectives who suggest that these big crash scams are orchestrated by organized crime.

Florida Legislature Nixes Reform - No Changes to PIP Laws for Now

In January, we discussed PIP reform proposals that were being talked about up in the state capital and the efforts of insurance carriers to push reforms through, from bill to law. They've failed.

The insurance industry had gone so far as to build up proposed comprehensive reforms to Florida's PIP laws, creating one big comprehensive personal insurance coverage reform bill.

Around ten days ago, that all fizzled out when the Florida House committee hearing the proposal voted against it. Specifically, HB967/HB1411 - the biggest attempt at changing PIP laws here in Florida in the past 4 years - died as it was voted down by the Florida House Subcommittee on Health Care and Human Services.

Read the dead bill's language here -- and see for yourself that what didn't succeed into turning into law this year was not only an attempt at altering your insurance coverage (instead of boosting regulations to stop criminals via criminal investigation, etc.) but an attempt to:

1. give the insurance companies the right to cap the charges they would cover under PIP for medical services;

2. limit the amount of money that attorneys could charge for their work regarding these crashes; and

3. granting the insurance company even more time (read that delay) in investigating claims before they pay.

It's one thing to fight crime. It's another thing to hurt all Floridians who unfortunately are involved in an accident. Sounds like lots of Florida accident victims may have just dodged a bullet.

By Bryant Esquenazi on May 10, 2011 3:41 PM

Charlie Sheen Isn't Stupid: An Example of How Lawsuits Are Built

Tonight, Charlie Sheen will appear on ABC for a lengthy interview on its 20-20 show - though if you've been following the news, you've probably already heard Mr. Sheen's loud and long protests against the cancellation of his CBS comedy, Two and a Half Men.

If you think that Charlie Sheen is a nut for roaming around and pontificating to Piers Morgan (CNN), Howard Stern, the crew at Good Morning America, TMZ.com, - well, the list goes on and on (the Washington Post calls this his "media storm") -- then you'd be wrong. Wrong.

Because while some may think that Sheen is crazy, he may well be crazy like a fox. Why? From a legal perspective, Charlie Sheen is doing a fine job of getting positioned for a big, fat lawsuit where millions (if not billions) will be on the line.

Lawsuits are Strategically Built, They Don't Spring Up Fully Formed

All lawsuits arise from a formal pleading (the petition or complaint) being filed down at the courthouse with the appropriate clerk, the original being placed in the public record and then copies being given to those who have been sued through a procedure called "service of process." However, that lawsuit didn't just start that day or that week.

Lawsuits are prepared and planned and built for weeks or months before that filing occurs. Facts are gathered, legal research is done. Evidence is made ready through the gathering of documents and the accumulation of witness statements.

You get ready for the fight in an aggressive, thorough manner. The claims that appear in that first filing are supported by lots of hard work and shrewd planning.

All plaintiffs work with their attorneys in this process. They gather evidence. They position themselves for the fight. They are an integral part of the team. And, if they're wise, they work with the potential defendants in an attempt to negotiate a resolution of the controversy before the legal war in the courtroom begins.

Which is exactly what Charlie Sheen is doing. Consider these things that we know and what they may well mean:

1. Charlie Sheen is represented by the Los Angeles law firm of Lavely & Singer - and Radar Online has published a letter that Sheen's lawyers have sent to Warner Brothers and CBS warning that Sheen has legal claims - that Sheen considers himself to be legally wronged.

Translate this to: Sheen's lawyers have given legal notice that a lawsuit - based on contractual damages as well as personal injury - may be forthcoming. Sheen's pondering and perhaps planning litigation - here's his formal notice to the parties he's considering suing. He's letting them know he has legal representation and they are letting the potential defendants know what these legal claims are.

2. Charlie Sheen is doing things now to counter any defense that might be asserted by these defendants. He's doing drug tests in front of the media - blood, urine - and coming out clean.

Translate this to: evidence that Steen is not operating under the influence through lab tests taken before witnesses who can testify that the tests were not fixed. Evidence here, not some stunt.

3. Charlie Sheen is ready to work. Sheen has repeatedly announced he's ready to continue with his TV show duties - even going so far as telling anyone who will listen that he would be showing up for work.

Translate this to: Sheen is letting everyone knows he's ready to continue with his contractual duties. He's not breaching here.

4. Charlie Sheen is actively seeking other projects. Movies, talk shows, etc. These don't seem to be panning out according to media reports.

Translate this to: Sheen is investigating whether or not he has been harmed by the things that have been said about him - has he been professionally injured, has he been legally defamed?

Say what you want about Charlie Sheen. Hate his show, or like it. Disapprove of his lifestyle or revere him as the new Hugh Hefner -- bottom line, Sheen is exemplifying an involved plaintiff preparing for a legal war and there are lessons to learn here.

By Bryant Esquenazi on March 1, 2011 1:32 PM

In Defense of the McDonald's Coffee Cup Case - Again

Here we go again. Ana Veciana-Suarez' article in the Miami Herald over the weekend entitled "Why take responsibility when you can sue?" once again uses misinformation and public misconception as an unfair basis for indicting our nation's tort system.

Every trial lawyer worth his salt knows to spend a great deal of time during the jury selection process weeding out those jurors who have preconceived (negative) sentiments about the way our legal system compensates victims of negligence with money damages. Even toady, 15 years later, we trial lawyers float the McDonald's coffee cup case balloon with all of its inherent misconceptions  as a way of finding out who amongst the prospective jury panel will be unable to give our clients a fair day in court. The questions and answers during jury selection (known as "voir dire" which literally means "to speak the truth") typically go something like this:

Q. Who here has heard of the McDonald's coffee cup case where a woman was awarded millions of dollars after she spilt hot McDonald's coffee of herself?

(several hands go up)

Q. Okay, prospective juror number 1, what are your thoughts about that case?

A. It just goes to show you that our judicial system is broken, gone amok, and that all Plaintiffs are lying, cheating, opportunists. You spill coffee on yourself, then it's your fault and I don't care what happened before or after that.

The problem is I have never heard one prospective juror get the facts of the case right. This is understandable in light of how the media wrongly reported and continues to wrongly discuss the case. See Ana Veciana-Suarez' editorial.

Here are the facts of the infamous McDonald's coffee cup case. I'm using bullet points to highlight key aspects of the case, but you can see a more through article by Wall Street Journal writer Andrea Gerlin (September 1, 1994) here.

• Stella Liebeck, a 79 year old former department store clerk who had never brought a lawsuit before in her life, bought a cup of coffee at a McDonald's drive-though;

• While removing the lid in order to add sugar and cream, she spilt scalding hot coffee on her groin, inner thighs and buttocks and sustained third-degree burns (the worst kind) in her private parts area;

• She spent 7 days in the hospital undergoing multiple skin graft procedures, and the jury was shown graphic photographs of her injuries (something the public never saw). Two years of medical treatment followed;

• She offered to settle with McDonald's for $20,000 to compensate her for medical bills (which were $11,000) and pain and suffering;

• At a court ordered mediation, the mediator - a retired judge - recommended that McDonald's settle for $225,000, believing that would be a likely jury verdict at trial. McDonald's rejected that recommendation;

• In the decade before Ms. Liebeck's incident, McDonald's had received over 700 reports of coffee burns ranging from mild to third-degree, and had settled multiple similar claims of scalding injuries;

• McDonald's argued that Ms. Liebeck's age may have been what caused her horrific burns since older skin is thinner and more vulnerable to injury;

• A McDonald's executive testified that the company knew it coffee sometimes caused serious burns, that McDonald's had specifically decided not to warn customers about the possibility of severe burns, and that the company never consulted any burn experts before implementing it's hot coffee policy (this is company who at the time sold 1 billion cups of coffee per year);

• The prestigious Shriner's Burn Institute in Cincinnati had published warning to the franchise food industry prior to the Liebeck incident suggesting that its members were causing serious burn injuries by serving beverages above 130 degrees;

• McDonald's required franchisees to keep coffee hotter than what was recommend by Shriner's Burn Institute for two reasons: one, they believed coffee tasted better at 180-190 degrees; and two, their main coffee purchasers drank their coffee about 15 minutes after purchase, when they arrived at their place of employment;

• The jury awarded Ms. Liebeck compensatory damages of $200,000 which was reduced to $160,000 because they found Ms. Leibeck was 20% responsible for her own injuries. They also awarded her $2.7 million in punitive damages based on what they felt was willful, reckless, malicious and wanton conduct on the part of McDonald's;

• After the jury verdict, the judge reduced the punitive damages award to $480,000 using powers properly invested in him to correct any perceived wrongs;

• Following the judge's reduction of the jury award, the parties then settled for a sum which was much less than the judge's reduced award.

So you see, that multi-million award evaporated just like McDonald's overly hot coffee. Yes, frivolous cases are bad. However, the vast majority - I would say 99.9% - of frivolous cases get bounced out of the system if not by juries, then by judges. Stella Liebeck's McDonald's coffee cup case was NOT frivolous. It was a case of "callous disregard for the safety of people" (according to one of the actual jurors) by the largest fast food seller in the world. In the end, after examining all the facts, justice was served.

By Bryant Esquenazi on July 12, 2010 3:59 PM