Few personal injury law firms have ever had two different trials in two different courtrooms going at the same time. Fewer firms can claim tremendous victories in both cases, and even less can report that both verdicts exceeded $1 Million.
However, Anderson, Hemmat & McQuinn can proudly make such a claim. In addition to the large verdict obtained by Ethan McQuinn against American Family in the Renan Espinoza trial, Mr. Hemmat tried a two-week federal court trial in Donald Etherton v. Auto Owners Insurance Company, and won a huge verdict for his client. On January 24, 2013, Anderson, Hemmat & McQuinn and their client, Donald Etherton, received a verdict that is valued in excess of $2.5 million.
Mr. Etherton’s verdict is the largest known verdict against an insurance company since the introduction of the new statutory bad faith laws codified in C.R.S. § 10-3-1115 & 1116. These laws hold insurance companies responsible to their customers if they unreasonably delay or deny the payment of benefits. Surprisingly, attorneys have underutilized these groundbreaking laws since they took effect several years ago.
Chad Hemmat, founding partner of Anderson, Hemmat & McQuinn, first met Donald Etherton shortly after Mr. Etherton was injured in a motor vehicle collision on December 19, 2007. Surely, in that first meeting, Mr. Etherton and Mr. Hemmat never expected that Mr. Etherton’s case would set new records for a jury verdict against an insurance company in Colorado. In fact, there was little expectation that Mr. Etherton’s case would even go to trial.
Mr. Etherton’s vehicle only sustained about $700 worth of damage in the rear-end collision. Furthermore, Mr. Etherton felt no pain after the car accident and did not report any back pain to his doctor until 16 days after the accident. When he finally saw a doctor about his injuries, Mr. Etherton, a 43-year-old construction worker, was already receiving Workers’ Compensation benefits for a prior shoulder injury. Mr. Etherton made very little fuss to his doctor about what he was describing as some mild low back pain with occasional pain shooting down his leg. The doctor also made very little fanfare of Mr. Etherton’s back injuries and simply sent him to physical therapy. The doctor suggested that Mr. Etherton would probably only need about 8 to 12 visits of physical therapy before his back pain resolved.
Mr. Etherton attended 30 sessions of physical therapy from January 2008 to April 2008. Unfortunately, these sessions did not relieve his pain and Mr. Etherton’s physical therapist contacted his doctor to express her concerns about Mr. Etherton’s lack of improvement and the weakness in his lower leg. Shortly thereafter, Mr. Etherton underwent an MRI of his spine. The MRI revealed a large disc bulge at the lowest level of Mr. Etherton’s spine, or the L5-S1.
Mr. Etherton was transferred to a specialist because of his MRI results. The specialist recommended that Mr. Etherton undergo three sets of injections in his spine to relieve the pain that he was experiencing on a daily basis. Mr. Etherton continued to receive facet and epidural injections until the end of 2008.
Because his condition was not improving, Mr. Etherton was sent to an orthopedic surgeon. The orthopedic surgeon recommended surgery and Mr. Etherton underwent three back surgeries in January, March, and May of 2009. By June of 2009, Mr. Etherton had incurred just under $400,000 in medical expenses.
The at-fault driver who caused the auto accident with Mr. Etherton had a small insurance policy in relation to Mr. Etherton's injuries, and he quickly paid the full limits to Mr. Etherton. Nevertheless, the amount that Mr. Etherton received from the at-fault driver was not nearly enough to fully compensate him for his injuries. Luckily, Mr. Etherton is a very responsible individual who had purchased 1 million dollars of uninsured/underinsured motorist coverage. Mr. Etherton purchased this policy to protect himself in case he was seriously injured by a driver who carried a minimal insurance policy that could not pay for all of his injuries and losses.
In July 2009, our office asked Auto Owners to pay the balance of the $1 million insurance coverage to Mr. Etherton because of his severe injuries. Auto Owners dragged their feet and spent five months conducting what they called an “investigation.” Auto Owners finally made a small offer of $150,000, which they suggested was adequate compensation for all of Mr. Etherton’s injuries. This offer did not cover Mr. Etherton’s medical bills, and did not compensate him one cent for his pain and suffering or permanent physical impairment.
We spent the next several months exchanging letters with Auto Owners. We asked them to explain how they determined that Mr. Etherton could be fully compensated by $150,000 when you consider the severity of his injuries and the $400,000 in medical bills he incurred to treat those injuries. In response, Auto Owners claimed that the offer was fair because Mr. Etherton was already treating for a shoulder injury at the time of the collision and it took Mr. Etherton several months before he complained about his accident related injuries to his doctors. We were flabbergasted by Auto Owner’s response. Although Mr. Etherton was treating for an unrelated shoulder injury at the time of the wreck, Mr. Etherton was not claiming any sort of shoulder injury from this collision. Also, he had only waited 16 days, not several months, before seeking medical attention. Quite simply, Auto Owner’s statements about Mr. Etherton’s case made no sense.
Auto Owner’s small offer was even more unreasonable because Mr. Etherton did not have any history of back pain. Simply said, there were simply no medical records anywhere suggesting that Mr. Etherton had ever had any problem with his lower back before the December 19, 2007 motor vehicle collision.
After receiving Auto Owners’ “take it or leave it” offer of $150,000, we were unable to dissuade them of the unfortunate claim evaluation process that led them to make such an unreasonable offer. Consequently, Anderson, Hemmat & McQuinn brought one of the first actions in Colorado under the new insurance bad faith statute against Auto Owners. Under this statute, a jury can find that an insurance company acts in bad faith when they unreasonably delay or deny benefits to an insured. This statute has teeth because if a jury makes this finding, the amount that the insured is owed under the policy is doubled (and sometimes tripled) and the insured is also entitled to the payment of his or her attorneys’ fees by the insurance company.
Unfortunately, Mr. Etherton’s story does not end with Auto Owners realizing their error and attempting to make things right. Instead, about eight months after the lawsuit was filed, Auto Owners hired a set of experts known throughout the industry as “the usual suspects.” These “usual suspects” are experts commonly hired by insurance companies when they are attempting to deny claims.
Auto Owners insurance hired a well-known accident reconstruction engineer who regularly testifies for insurance companies. His regular opinion is that the physical forces created by a motor vehicle collision are insufficient to cause injury. Not surprisingly, the accident reconstruction engineer’s opinion was that the physical forces in Mr. Etherton’s collision were not sufficient to cause his back injury. Armed with this bogus and unfounded information, Auto Owners then hired a bio-mechanical expert who also concluded that the forces from the motor vehicle collision could not have caused Mr. Etherton’s injuries.
Auto Owners also hired two different medical doctors to examine Mr. Etherton and his medical records. Not surprisingly, both hired doctors determined that Mr. Etherton’s back complaints were unrelated to the car accident. Lastly, Auto Owners hired a nurse to opine that Mr. Etherton’s medical bills were overpriced and unreasonable.
After four years of legal wrangling, including the removal of the case to federal district court by Auto Owners, trial finally began on January 14, 2013. Auto Owners was very smug as trial approached and made one offer of settlement for $1 shortly before trial began. They felt that their “dream team” of bought and paid for experts was going to dominate our experts, which were comprised only of the doctors who actually treated Mr. Etherton for his injuries.
As the trial unfolded over the next two weeks, it became readily apparent that Auto Owner’s experts had made their conclusions based on incomplete information and speculation. Simply said, their experts had never been told the full story. The engineers who examined the property damage to Mr. Etherton’s car were told by Auto Owners that Mr. Etherton’s vehicle had only sustained $700 worth of damage. Auto Owners “forgot” to tell the engineers that the other vehicle involved in the collision had been totaled as a result of the trailer hitch on Mr. Etherton’s vehicle piercing the engine block of that vehicle. The engineers were also laboring under the false assumption that this rear-end collision was a bumper on bumper collision because they were not told about the trailer hitch on the back of Mr. Etherton’s vehicle by Auto Owners.
Essentially, Auto Owners kept important details about Mr. Etherton’s case from their own experts. Additionally, the medical doctors hired by Auto Owners were not provided photographs of the other car involved in the car accident. Also, the nurse who was hired to review Mr. Etherton’s medical bills was not provided with all of the medical bills, including the medical bills for Mr. Etherton’s third and final surgery.
By the time each side made their closing argument on January 23, 2013, it was readily apparent that the jury was ready to hammer Auto Owners for their misconduct. The jury started deliberating on the evening of 23rdand took six hours to reach a verdict the next day, January 24, 2013. The jury found that Auto Owners breached their insurance contract with Mr. Etherton and that Auto Owners acted unreasonably in delaying and denying the payment of his benefits.
Accordingly, the jury awarded Mr. Etherton $375,000 for his pain and suffering, $875,000 for his economic losses, and an additional $150,000 for permanent physical impairment. Because of the insurance bad faith statute, the $1.4 million verdict was reduced to $750,000, the amount of the disputed benefit, and multiplied by two ($1.5 million) because the jury found that Auto Owners acted unreasonably. Therefore, the verdict amounts to $1.5 million. We believe the law allows for the verdict to be even higher and that issue will be resolved by the Court soon. Mr. Etherton is also entitled to interest on his verdict. Pursuant to state statute, the amount of interest is calculated from the date of the motor vehicle collision. In addition, pursuant to the insurance bad faith statute, Auto Owners is also obligated to pay Mr. Etherton’s attorneys’ fees. It has been estimated that the value of Mr. Etherton’s verdict will exceed $2.5 million. If Auto Owners appeals the verdict as they are expected to do, Mr. Etherton’s verdict could be increased to as much as $3 million.
Don Etherton asked that we tell you his story. At Anderson, Hemmat, & McQuinn, we applaud Mr. Etherton for his courage in standing up to Auto Owners, a large insurance company, and for demanding fair compensation for his injuries. We hope that Mr. Etherton’s story will encourage other victims to stand up for their rights.
FINAL CASE NOTE: In July 2016 the Federal 10th Circuit Court of Appeals upheld Don Etherton's 2.5 million dollar verdict ruling that the trial court and the judges were correct in finding in favor of Mr. Etherton and upholding his verdict. On July 28, 2016 Owners Insurance issued a check to plaintiff and Anderson, Hemmat & McQuinn for the full value of the verdict, attorney fees and costs associated with this 6 year court battle.