The Poppe Law Firm Blog

AIG Agrees to Pay $18 million dollars to settle personal injury lawsuit....

In what can only be described as a highly unusual situation, AIG (the insurer that has recently come under fire for its lavish spending following a bail-out by the Government) has agreed to pay a North Carolina man $18 million to satisfy a $75 million personal injury judgment.  Here is the story as reported by TradingMarkets.com.

American International Group, the major insurance company that received an $85 billion federal bailout for risky financial practices, has agreed to pay $18 million to a former North Raleigh man who was completely disabled when a pickup truck hit him in the parking lot of his apartment.The settlement appears to be one of the largest in the state's history for a personal injury case, local lawyers say, and it was driven by the fact that AIG was already on the hook for a much larger judgment -- $75 million -- after a subsidiary did not defend the case in Wake Superior Court.

"That's huge," said Dan Hartzog, a veteran civil litigator in Raleigh who was not involved in the case. "It would be a big jury verdict, but it's a really big settlement."

Such settlements rarely become public, but the details were discussed in an open session of U.S. District Court earlier this month with a News & Observer reporter in attendance. Lawyers for both sides had sought to keep the settlement confidential, but U.S. District Judge Terrence Boyle did not take up their request.

They also said they were moving to settle quickly because of AIG's financial straits. In September, the Federal Reserve provided the company with an $85 billion loan to keep it from going bankrupt.

In settling the case, AIG avoids what would have been one of the largest judgments in North Carolina history. In May, state Superior Court Judge Orlando Hudson granted the request of accident victim Mark Pellegrin's attorneys for damages of $75 million after no one showed up for trial to defend the company that owned the pickup truck and the employee who drove it.

National Union Fire Insurance Co. of Pittsburgh, the AIG subsidiary, requested the case be moved to U.S. District Court after the judgment and entered into settlement talks with Pellegrin's attorneys.

Pellegrin's father, Jerry, a long-distance truck driver, told the court that he was satisfied with the settlement, which provides $6 million immediately, invests another $6 million for future costs, and pays Mark Pellegrin's attorneys the remaining $6 million to satisfy the contingency fee contract Pellegrin's father struck with them.

Compassion showed

"I'd like to say that I'm not a big fan of lawyers myself," Jerry Pellegrin said. "However, these three people have shown me and my son more compassion than I ever thought."

Boyle accepted the settlement, but he reserved judgment on the attorneys fees.

Mark Pellegrin, 29, is being cared for at his father's home near Houma, La.

One of National Union's attorneys, Jim Exum, a former N.C. Supreme Court chief justice, told the court that the insurance policy had a maximum payout of $21 million.

The lawsuit was filed last year against KCI Technologies and one of its employees, Kelly Joe McKiernan, 29, who performed maintenance on the company's cell phone towers. KCI Technologies is a Maryland-based engineering and construction company with more than $140 million in revenue last year.

New Year's Eve

McKiernan said in a deposition that, on New Year's Eve 2005, after drinking beer and Jagermeister, he jumped into his company-issued truck and put it in gear. He was ready to leave Pellegrin's home at Sommerset Place Apartments -- off Six Forks Road in North Raleigh -- after some rough-housing between the two friends left McKiernan upset.

But as McKiernan put the truck in drive, Pellegrin ran in front of the vehicle to try to get him to stop.

McKiernan hit Pellegrin, whose head struck the truck and then the pavement. Pellegrin suffered severe brain injuries, and today he has limited movement and speech. He needs round-the-clock care, medical records showed.

"I'm sure he was just coming down to tell me, 'You know, man, what are you doing, Kelly? You're drunk, dude. You know better than this,' " McKiernan said in the deposition.

No conviction record

Raleigh police charged him with driving while impaired, according to a police report filed as an exhibit with the court papers. But there's no record of McKiernan being convicted of the charge.

Efforts to reach McKiernan for comment were unsuccessful.

AIG refused responsibility for the accident, saying McKiernan had been drinking, which was in violation of KCI's vehicle use policy, and was not on the job when the accident happened.

That meant Pellegrin would receive little or no help for his injuries and subsequent care -- despite the fact that he worked for KCI as well. He, in fact, was McKiernan's boss and had hired him.

The men grew up together in Texas.

Pellegrin's attorneys argued that McKiernan was at work when he went to Pellegrin's apartment. McKiernan said that Pellegrin wanted him to stop by to make sure the truck had the proper equipment before McKiernan went out to inspect cell phone towers. But while they were looking over the truck, the two friends from Texas decided to take a break. They drank beer and Jagermeister, McKiernan said in the deposition.

Hudson, the Superior Court judge, found McKiernan had been acting within the scope of his employment, and therefore the insurer was responsible for the $75 million judgment.

Hartzog and other local civil litigation attorneys not involved in the case said that's the price defendants can pay when they don't appear in court.

"That is a litigator's dream," said Richard Watson, a Durham attorney.

(News researcher Lamara Williams contributed to this report.)

dan.kane@newsobserver.com or 919-829-4861

Labels: car accident, personal injury, settlement, truck accident