More to the Story?: Turns Out TCPA Defendant Hit With $267MM Trial Verdict Rejected an $875k Demand at Mediation—is this Insurer Bad Faith?
I love it when we have a chance to look deeper into the big TCPAWorld stories and share some fascinating tid-bits with our readers.
One of the biggest stories of 2019 was the huge $267,000,000.00 verdict entered against collection company Rash Curtis & Associates in a certified TCPA class action. Although the judgment was not nearly the biggest of 2019—that “honor” belongs to ViSalus who was hit for nearly a $1BB earlier in 2019—the award was certainly eye-opening for the collection industry that had mostly avoided such huge-dollar TCPA verdicts in the past.
The story somehow became even bigger this year when the Court refused to reduce the award on constitutional grounds and awarded an eye-popping $89MM ($89,000,000.00) in attorney’s fees to the Plaintiff’s legal outfit, the always dangerous Bursor and Fisher.
Well now we know a little bit more about the back story leading up to this train wreck on a dumpster fire. As gleaned from the decision in Perez v. Indian Harbor Ins. Co., CASE NO. 4:19-cv-07288-YGR, 2020 U.S. Dist. LEXIS 82546 (N.D. Cal. May 11, 2020)(Perez-IH), it turns out that the Defendant (allegedly) could have walked away from the entire mess for under a million bucks at a mediation back in September, 2017 but turned it down and decided to fight on. Ultimately it got creamed by a jury for roughly 300 times more than they (allegedly) could have settled for at mediation.
Interestingly, the Defendant may or may not have insurance for the TCPA claim at issue—the insurer denied coverage but Rash Curtis asserted a right to defense and indemnity and assigned its rights to a bad faith insurance claim to the Plaintiff. That set the stage for the filing of the complaint in Perez-IH which set forth a litany of purported missteps by the insurer in handling potential resolution of the case. The proverbial cherry on top—of course—was the story of the $875k mediation offer that was oh-so-imprudently left on the settlement table. The complaint also explains that “Rash Curtis walked out and made no settlement offer” at the mediation, a fact which—if true— speaks to an Odessyian level of hubris by the Defense.
The Court in Perez-IH ultimately determined that the events at the mediation are not properly pleaded in the complaint and ordered such allegations struck at the insurer’s insistence. Nonetheless, the case lives on a the Court determined the bad faith claim was live even though the underlying judgment against Rash Curtis is currently on appeal to the Ninth Circuit. In all likelihood any chance that B&F will get paid for their work in the Perez trial hangs in the balance.
We’ll keep a close eye on this one.