Judge orders AIG to pay $7M to injured lawyer over insurer's bad-faith conduct in accident case

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Blasting a major insurance company for what he called unfair settlement practices in an egregious case, a Massachusetts judge Tuesday ordered American International Group Inc. to pay at least $7 million to a lawyer hit by a bus making a left turn as a he crossed a street in Boston.

The award in the bad-faith case is in addition to $3.6 million paid in 2008 by AIG to Odin Anderson and his family for his injuries in the 1998 accident, the Boston Globe reports.

Lawyers representing AIG made up claimed facts in the personal injury litigation underlying the bad-faith suit and inappropriately coached the bus driver to change his story, said Associate Justice Brian A. Davis in his written opinion in the Middlesex Superior Court case. An argument that Anderson was partly responsible for the accident because he ran out onto the street between cars was based on “a wholly made-up fact,” the judge wrote.

Those in charge of handling Anderson’s claim for AIG executed “deliberate or callously indifferent acts designed to conceal the truth, improperly skew the legal system, and deprive the Andersons of fair compensation for their injuries,” Davis said.

The owner of the bus company and the driver declined to comment when contacted by the Globe. Two Boston lawyers whose videotaped conduct preparing the bus driver for a 2002 deposition was criticized by the judge couldn’t be reached for comment. However, an attorney representing them said they had done nothing wrong.

The two lawyers “didn’t have an opportunity to defend themselves or present the full set of circumstances,” attorney Edward Cheng told the newspaper. “They’re confident they acted properly in their role in the underlying litigation.”

Attorney Anthony Zelle, who represented Anderson in the bad-faith case, didn’t respond to the newspaper’s phone messages.

However, attorney Leonard Kesten, who represented Anderson in the initial personal injury case over the bus accident, said the attorney, now 69, was devastated by the head injuries he suffered. Although he was able to return to law practice, the former trial lawyer was not able to work the same level, Kesten said.

“He was one of the best, and he remembers that. It changed everything about his life. He had to have speech therapy. He had to learn how to drive again and how to find his balance to walk normally.”

Kesten said he hopes the Massachusetts Board of Bar Overseers will look into the conduct of AIG’s legal defense team. Meanwhile, he applauded the $7 million award to Anderson, which Kesten said could be increased to $12 million, including treble damages and attorney fees, because of the claim of bad faith.

“Even when a multibillion-dollar company decides to use its resources to try and crush a plaintiff, we have a system that allows full vindication, and it happened,” Kesten told the Globe.

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