$10-Million Fatal Accident Award Halved

A $10-million jury award to a former truck driver whose employer’s insurance company balked at paying claims stemming from a fatal accident in which he was involved has been cut in half by a Los Angeles Superior Court judge.

Judge Jack Tenner granted the insurance company’s motion for a new trial on grounds of excessive damages unless Joseph Stanton accepted a reduction from $10 million to $5 million, which Stanton did.

Jurors last October awarded Stanton $60,000 in compensatory damage for his emotional distress over Continental Casualty Co.’s conduct and tacked on $10 million in punitive damages for the company’s “bad faith” in not paying a claim against him by the family of a man killed in the 1978 accident.

Stanton was driving a truck for Target Express when it separated from its trailer in a rainstorm and struck a vehicle on the 605 Freeway, killing its driver, Luis Zolke.

Zolke’s widow and two daughters filed claims against Firemen’s Fund and Allstate, which had insured Stanton as a driver, and against Continental, as Target’s insurers. Firemen’s and Allstate acknowledged liability and agreed to pay $200,000. The family agreed to limit their damage to $400,000 and tried to collect the remaining half from Continental, according to Stanton’s attorney, Thomas Stolpman.

$150,000 Settlement

Continental did not acknowledge liability for four years after the accident, then negotiated a settlement of $150,000 with the family. Stanton continued his own bad-faith suit against the insurance company, Stolpman said.

In the three-week trial of his case, Stanton’s lawyer argued successfully that Continental shared liability for Stanton under the California Insurance Code because he was a “permissive user” invited to drive Target’s truck.

Tenner agreed in his post-trial order, issued last Friday, but said the findings did not support a punitive award of $10 million.

“I don’t think $10 million was out of line at all in light of their (Continental’s) conduct,” Stolpman said Monday.

Besides the $5 million, Stanton, who lives in Anaheim and works in a factory, keeps the $60,000 for compensatory damage and is eligible for $462,000 in prejudgment interest because the insurer had a chance to settle with him for $600,000 and refused, Stolpman said.