Tuesday marks five years since Dr. Paul Wills of Fort Smith was injured in a car accident.
Two years after that, he made a claim with his insurance carrier. But as 2020 draws to a close, he’s still waiting to be paid, joining thousands of others using the courts to battle what plaintiffs say are unfair delay tactics by insurance companies.
At the time of the accident, Wills was 72 and had purchased underinsured motorist coverage from Encompass Indemnity Co. He said in court filings that his injuries in the rear-end collision intensified his pre-existing Parkinson’s disease, making him unable to continue working as he had planned.
In 2017, Wills filed a claim with Encompass for $500,000, the policy limit.
The claim was denied, so Wills sued Encompass Indemnity and a related entity, Encompass Insurance Co., in Sebastian County Circuit Court last year.
Encompass said in court filings that Wills didn’t prove his damages and it had tried to settle the claim before the lawsuit was filed.
In May 2019, Wills won a summary judgment of $500,000, plus $200,000 for attorney’s fees and a $60,000 penalty against Encompass — money that he is still waiting for.
Meanwhile, Wills’ suit against Encompass continues. He is seeking damages from Encompass and its parent company, Allstate Insurance Co. of Northbrook, Illinois, because, he said, the insurers failed to pay his claim in a timely manner. That element of the case continues, having been moved to U.S. District Court in Fort Smith.
Wills’ case highlights a continuing trend: people forced to take their insurance carriers to court after their claims are denied.
For the year that ended March 31, 10,695 lawsuits had been filed in federal courts across the country involving insurance issues, a number slightly less than the previous period a year earlier, according to the Administrative Office of the U.S. Courts.
“We know a number of companies embarked on strategies to delay paying claims, deny valid claims in whole or in part and … then force policyholders to litigation,” said Jay Feinman, who teaches insurance law at Rutgers Law School in Camden, New Jersey. And once a lawsuit is filed, the insurance company will vigorously defend the case, he said.
“That became part of the practice of a number of large national insurers,” said Feinman, who was unfamiliar with Wills’ case. “It’s not true of every company all the time, but we have seen them.”
In their court filings, Encompass and Allstate have denied allegations of wrongdoing.
One of Allstate’s attorneys, Richard Shane Strabala of the Little Rock law firm Huckabay Munson Rowlett & Moore, said it’s Allstate’s policy not to comment on pending litigation.
James D. Burns of the Laser Law Firm of Little Rock is representing Encompass and didn’t return a call for comment.
Wills’ attorney, E.C. Gilbreath of Fort Smith, also didn’t return a call for comment.
The case, which included an appeal to the Arkansas Court of Appeals, illustrates the efforts some policyholders must make to get paid on a claim.
Wills was diagnosed with Parkinson’s disease around 2006, according to the court filings.
In November 2015, Wills was 72 and working for CenseoHealth of Dallas, doing in-home histories and physical examinations, mainly in northwest Arkansas. His Parkinson’s was still in its early stages and he planned to work for three more years.
While driving in Hot Springs, Wills was rear-ended, causing severe neck pain, according to his court records. The day after the accident, Dr. John Swicegood of Fort Smith began treating Wills. Less than a month later Wills’ “physical condition had worsened dramatically,” Swicegood wrote in an April 2017 letter that was included in the case file. Swicegood said Wills was unlikely to significantly improve.
Wills filed a claim with the driver who caused the accident and received the coverage limit of $50,000. That amount was paid, but Wills said it wasn’t enough to cover his damages for being unable to work, which he put at more than $1 million.
Wills had underinsured motorist coverage with Encompass and a policy limit of $500,000.
He filed a claim on Nov. 17, 2017, which Encompass denied.
In February 2019, Wills sued. He was seeking the $500,000 plus other damages against Encompass, which “did not make any reasonable settlement offer and only made a very minuscule bad faith settlement offer more than a year after notice had been served on Encompass,” Gilbreath, Wills’ attorney, wrote in the complaint.
He also said Encompass has a pattern of denying certain UIM claims and drawing out litigation before settling the cases. And he listed about two dozen lawsuits that have been filed by policyholders against Encompass during the last 15 years.
In April 2019, Wills filed a motion for summary judgment that sought payment for the $500,000 plus attorney’s fees. He said the medical records made it clear that because of the accident he had lost future earnings of more than $500,000.
In the motion for summary judgement, Wills filed a letter from Dr. R. Cole Goodman of Rogers, who has known Wills for more than 40 years. Goodman said that the day before the accident, Wills could have gotten a job paying between $250,000 and $400,000 annually. Wills was “held in high esteem by his colleagues and patients and did excellent work,” Goodman wrote in the undated letter.
Burns’, Encompass’ attorney, said at the motion for summary judgment hearing on May 14, 2019, that Wills’ motion should be denied and that a jury should decide Wills’ damages.
“The question is not whether Dr. Wills had a loss of earning capacity, but whether that was caused by the accident,” according to the pleadings in the file. “Some might think that the accident aggravated Dr. Wills’ Parkinson’s. Our neurologist states that is not the case.”
Burns said that if a jury agrees with the damages, Encompass will pay that amount “in addition a penalty, interest and attorney fees.”
Burns said in a filing that no one denied that Wills is entitled to damages, but the question was just how much money he was owed.
On May 31, 2019, Sebastian County Circuit Court Judge James Cox found there was an issue of fact to the suggestion of whether the car accident aggravated Wills’ pre-existing Parkinson’s disease.
Nevertheless, Wills had other injuries tied to the accident, and Cox ruled in favor of Wills’ request for the $500,000. In his motion for attorney’s fees, Gilbreath said the case file is more than 12 feet thick and weighs 414 pounds. Cox later added $200,000 in attorney’s fees and a $60,000 penalty against Encompass.
Encompass first asked Cox to reconsider his ruling, and when he didn’t, Encompass appealed to the Arkansas Court of Appeals. But that court dismissed the appeal on April 22 because there wasn’t a final order in the case.
In the meantime, Wills added Encompass’ parent company, Allstate, as a defendant. In August, Allstate transferred the case to U.S. District Court.
Encompass asked U.S. District Judge P. K. Holmes III to throw out Cox’s ruling.
“First, both Encompass and Allstate would be hopelessly prejudiced in any trial on Bad Faith or Punitive Damages if the primary underlying issue — a dispute over the value of Plaintiff’s claim — has been resolved as a matter of law in Plaintiff’s favor!” Burns wrote in his September motion.
Gilbreath, Wills’ attorney, argued that the order of summary judgment shouldn’t be thrown out.
“Quite frankly, it is unbelievable that defendants would argue that ‘we can’t get a fair trial’ on the claim of bad faith and punitive damages if the jury knows of defendants’ conduct and manner in which defendants handled claims, such as plaintiff’s UIM claim, which has been pending for more than three years, and it appears that this case could go on for at least two to six more years,” Gilbreath wrote last month.
As of Wednesday, Holmes hadn’t ruled on the motion to vacate Cox’s order.