Ten Years, Eight Courts, Five Cases, Three Appeals, Two Trials, One Bankruptcy, and No Insurance

By Trent B. Speckhals

I keep the stock certificates for a strip club in my desk drawer. When I see them, I am reminded of how I obtained justice for my clients, an infant and a toddler, who tragically lost their mother in a collision.

The case began in the usual way when the family was referred to me by another attorney. From there it turned into an odyssey, which like its namesake, lasted ten years. Before it was over, I would litigate five cases arising out of the collision, appear in eight courts, try two cases to verdict, handle three appeals, defend against state and federal declaratory judgment actions, pursue claims in bankruptcy court, and encounter seven sets of opposing counsel.

While tracking down witnesses known only by first names such as Clocky, Doc, Red, Webb, and Bubba someone tried to mug me. After one verdict, a strip club owner’s spouse threatened to kill me at the DeKalb County Courthouse. Later, on cross in bankruptcy court, he melted down like Jack Nicholson’s character in A Few Good Men yelling, “I told them to put the money in the trunks.” I had to purchase bill and coin counters so the Marshal’s office could total money seized in levies of the strip club. But, I get ahead of myself and should take you back to the beginning.

My first contact was with the children’s maternal grandmother. She had been trying for months to get the case settled with the defendant driver’s insurer. This should have been easy and straightforward. The defendant was driving in the wrong direction and had only $25,000 in coverage. The insurer, however, decided to give the grandmother the run around. That is why she called me.

I sent a time-limited demand for the policy limits in exchange for a limited liability release, conditioned on the insurer providing a sworn statement as to all available coverage and copies of the policies under oath. I emphasized that “I need to verify the full amount of available liability insurance before my client can settle, so please send me the complete requested insurance information.”

When the insurer sent me only an incomplete copy of the policy, an unsworn declarations page, and a $25,000 check, I faxed the adjustor a letter reminding her that I needed all the requested insurance information in order to settle the case and that there was still time to do so.

Incredibly, the insurer still failed to provide a sworn statement confirming that this was all the available coverage and failed to send a complete copy of the policy under oath. Not until much later, after we filed suit, did the insurer finally confirm under oath that $25,000 was the full extent of all available coverage.

Since the defendant driver also died in the collision, we had to file to have an Administrator appointed by the Probate Court in Cobb County, where he had resided. We also had the children’s grandmother appointed as their Conservator in DeKalb County Probate Court. And, we filed suit against the Administrator in DeKalb County State Court, where the Administrator resided.

The defense initially filed a motion to enforce a settlement, claiming that the insurer’s response to the demand had satisfied all its essential elements. We opposed it; the motion was denied, and discovery proceeded.

We soon discovered that the at fault driver had been very drunk. Shortly before trial, the defense claimed they had an expert who would testify that the driver suffered diabetic ketoacidosis, which caused his confusion and elevated blood alcohol level. When the defense failed to provide his name or schedule his deposition, we obtained a court order, and he was soon withdrawn.

Then, just days before trial in DeKalb County, the insurer obtained a stay from the Cobb County Superior Court enjoining us from proceeding until it ruled on a declaratory judgment action the insurer had filed.

The declaratory judgment action would turn out to be more extensively litigated than the underlying lawsuit. The insurer filed a summary judgment motion raising numerous coverage defenses, including that the driver did not have permission to drive the car. This is what required me to track down the previously mentioned nickname-only friends of the driver. Some were in jail, others had died, but I found two who confirmed he often drove the car with the owner’s permission, and sometimes, even in his presence.

Then, under threat of a motion to compel, the insurer finally produced a recorded statement taken just days after the collision. In it, the owner admitted to the adjuster the driver had permission to drive his car, which contradicted his deposition testimony that he did not. This was enough to defeat the insurer’s motion for summary judgment.

Undeterred, the insurer filed a second summary judgment motion and disclosed that it had exhausted its policy limits by payments to other claimants injured in the same collision. The insurer argued that as a result, it had no further duty to defend the underlying lawsuit in DeKalb or to ever pay anything to my clients. I conceded that there was no further duty to defend the case, but explained that the declaratory judgment action should not protect the insurer from the adverse consequences of its past actions—namely its failure to settle as demanded when it could have, prior to exhaustion of the limits. The Court agreed, and we were now ready for trial as soon as the injunction was lifted.

While all of this had been going on, I had also been busy working on a dram shop case against a strip club where we heard the driver had been drinking. Although the strip club had no insurance, I decided to proceed with the case and try it, in large part due to it being in default after failing to answer.

After defeating motions to open the default and an untimely motion to apportion fault to the drunk driver, we tried the case solely on damages. Had it not been for these fortuitous breaks

—the default and the untimely motion to apportion—I don’t think I would have much of anything to report or show from the dram shop case. We were never able to confirm that the driver was drinking there. To the contrary, one of his friends in the Cobb County declaratory judgment action later testified the driver never went in the strip club, and was instead passed out in the back of the car while his friends went in. I also suspect the jury would have been more than willing to apportion a great deal of fault to the drunk driver.

The jury returned a verdict of $1.75 million. It was always a large concern that this would be uncollectible, and this concern increased while the judgment was on appeal. I learned the strip club was quickly burning through cash and that there were other suits against it. I therefore made the calculated decision that the judgment would be affirmed and that we should start garnishing the strip club’s accounts. We successfully hit its accounts on several occasions before they quit using the banks.

I next arranged to have the DeKalb County Marshal’s office levy on the strip club. With intelligence from a “strip club expert,” another club’s former manager I hired to patronize the club for a couple of nights, we learned its likely cash flow, bank-drop times, and cash-handling practices. With this, the Marshal’s office was able to time its raids when the most cash would be on hand. They were incredibly helpful, diligent, and enthusiastic in conducting a couple of raids, which were quite profitable and led to them calling me for a bill counter.

The coin counter request came later and is one of the few humorous things that happened throughout this tragedy. While returning during the day to give the strip club a receipt of what had been obtained in a prior late-night raid, the Marshals saw a number of 5-gallon water jugs in a room filled with quarters from the cigarette and pool tables.

Later, the levies quit working because the strip club began hiding the money in the trunks of their employees’ cars. Shortly thereafter, it predictably filed bankruptcy. Due to having a judgment, my clients were secured creditors in line only behind the government for unpaid tax liens. Although the strip club had few assets, it had one very valuable asset—a grandfathered license that allowed it to be one of the few remaining strip clubs that could serve alcohol in Atlanta—as long as it stayed at the same location and operated under the same company.

Ultimately, we won the appeals the strip club had filed. I was also able to negotiate a deal with the strip club and its owner where, in lieu of forcing her into personal bankruptcy after the owner’s husband admitted they had been hiding money, she pledged all her stock in the strip club as security for a multi-year payment plan that the bankruptcy court approved. Thankfully, it has been paying ever since, but if it does not, my clients will own the strip club and be able to sell its shares to cover the judgment.

Returning to the case against the Administrator of the Estate of the drunk driver, we were finally able to try it too, and we obtained a $5.35 million judgment. But, of course, that is not the end of the story.

The defense appealed the judgment on multiple theories, including that the jury should have been allowed to apportion the verdict against the strip club—despite being unable to present any evidence that the driver was ever in that club, that the case had been settled, and that the judgment was improper because the jury in the earlier tried dram shop case had already determined the value of the case.

Just before trial, the insurer also filed another declaratory judgment action, this time in federal court. It sought a declaration that the case had been settled, that it owed nothing because it had already exhausted its policy limits paying other claims, and that it had committed no bad faith. I must confess that this was the only easy part of the entire experience. Since the defendant Administrator of the Estate of the drunk driver had been sued by her own insurer and was the one who had the bad faith failure to settle claim against her insurer, she hired Rich Dolder and Jay Sadd of Slappey & Sadd, LLC. They counterclaimed against the insurer for its bad faith failure to settle.

As far as the result of the appeal, we won, and our $5.35 million judgment was affirmed. And, as to the federal declaratory judgment action? I am only allowed to say that the matter confidentially resolved to the parties’ mutual satisfaction.

I’d be remiss if I did not thank a few people in addition to Rich Dolder and Jay Sadd, who are fantastic lawyers. Camille Jarman helped me pick juries for both trials and consulted, and she is a fantastic lawyer, as well. Charles Cork helped me with appeals, and he is an unbelievable appellate advocate. Also, my wife, Kristen, who works part time as a paralegal, is incredible in both her work and support.

A few final thoughts. When I started the case my oldest was in fifth grade. When I finished, I had just picked him up from his freshman year of college. The trials were exhilarating. The ten years of litigation, however, were often grueling, and while it now seems like it was always destined to turn out, it did not seem that way while going through it. But, I was the lucky one. I got to be around for my children and see them grow up. My parents and wife even got to watch one of the trials. And, as I watched my clients grow from babies into grade schoolers, I feel thankful that I was able to help secure their financial future after such an unfathomable loss.

Trent B. Speckhals is devoted to representing the families of those killed and people who are severely injured by others. He is a GTLA and AAJ member, an Eagle Scout, and an Adjunct Professor at Georgia State University College of Law where he teaches the litigation and trial course, Lawyering Advocacy.

Sanit Fuangnakhon/SHUTTERSTOCK.COM

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