Deep Pockets, Deep Dilemma

An automobile-accident case that was decided last month in San Fernando Superior Court raises a troubling question about the law of liability and who should pay damages to an injured victim. The issue is very difficult, and there is no clear-cut right answer. As sometimes happens, justice and fairness lie on all sides. But in light of recent developments the Legislature should take another look at the current law, with an eye toward straightening things out.

The San Fernando Valley case illustrates the problem. In 1979 a teen-age boy who had been taking drugs ran a stop sign at an unusual intersection in Granada Hills. His car, a Pinto, was broadsided by a pickup truck traveling across the intersection with the right of way. A 16-year-old passenger in the car was severely injured and brain-damaged, and sued everyone involved--including the City of Los Angeles--alleging that the intersection was unsafe. Last month a jury awarded her $2.16 million in damages. The jury found that Los Angeles’ failure to mark the intersection better had contributed 22% toward the accident and that the other defendants, particularly the driver of the car, had contributed 78%.

The trouble is that the total insurance carried by the driver and the others amounted to about $200,000, leaving nearly $2 million uncovered. Under the law of joint and several liability, which applies when several co-defendants are held responsible for an accident, each co-defendant is responsible for paying the full judgment if the others cannot pay. So the City of Los Angeles, which the jury said bore one-fifth of the responsibility for the accident, will wind up paying 90% of the damages. (The city, by the way, maintains that the intersection is not unsafe, and says that it has no plans to change it.)

This is no isolated case. In recent years lawyers for injured plaintiffs have increasingly sought to rope in a so-called “deep pockets” defendant, such as a government agency or a hospital, in order to ensure that a large judgment is collectable. If the trend continues, government agencies--the taxpayers--will wind up being the insurance company for everyone who is inadequately insured.

There is an argument on behalf of maintaining the status quo. In the accident case in the valley, the truly innocent person was the passenger in the car, who bore virtually no responsibility for the accident but who has suffered heavily. In this imperfect world her claim to compensation surely overrides the city’s claim that it was only minimally responsible. Why should the victim wind up with less than she is entitled to? The other side says: Never mind who was innocent, how about who was guilty? Clearly it was the car’s drugged-up driver who ran the stop sign.

The best solution would be to make the mandatory insurance law work better, although there probably can never be an ironclad guarantee of financial responsibility for all motorists because of the ease with which insurance policies can be canceled. In addition to that, the Legislature should give favorable consideration to a bill by Sen. John F. Foran (D-San Francisco) that would strike a compromise between continuing the law of joint and several liability as it now stands and scrapping it altogether. The Foran bill (SB 75) would limit payments for non-monetary damages in deep-pocket cases. It would continue the present arrangement for all direct costs, such as medical bills and lost income. However, for the “pain and suffering” portion of a judgment, the bill would make a change. The liability of any co-defendant who contributed less than 40% to the accident would be limited to the actual assessed percentage of the liability. But if a co-defendant contributed more than 40%, the present law of joint and several liability would continue to apply.

What’s fair? The current situation is not. The Foran bill is at least fairer.