Will large jury verdict impact future aviation claims?

On September 7, 2019, United Airlines employee Ulysses Cruz was catastrophically injured in a vehicle accident at Houston Intercontinental Airport. He was working as a wing walker when a vehicle operated by Allied Aviation Fueling (Allied) struck him. Cruz was paralyzed from the chest down and during spinal surgery two days later, suffered a stroke that put him in a vegetative state.

Last month, a trial against Allied and the employee driver of the vehicle concluded in Texas state court in Houston, Harris County. The jury found Allied liable for the accident and awarded a staggering $352 million in damages to Cruz and his family who pursued their own claims. Notably, Cruz was awarded $70 million for future physical pain, $70 million for future mental anguish, $35 million for future physical impairment and $35 million for future physical disfigurement, while his wife was awarded $25 million and his two children were each awarded $20 million for their loss of services claims.

We’ve consulted with Texas aviation defense counsel (who were not involved in this case) to better understand whether the verdict will stand and how it will impact future claims. Please note the following:

• A reasonable jury verdict would have been $30 million to $40 million. So, the actual award is 10 times greater than expected. According to Texas counsel, Cruz was a normal functioning adult male with a family who now is a paraplegic in a vegetative state. “This was the perfect plaintiff meets a runaway jury.”
• There is a lot of anxiety in response to this verdict and the question is whether the dynamic has changed. Defense counsel advises that it probably has not stating “we get one of these every two to five years. They are always out of left field and everyone gets surprised. These happen, but fortunately they are less than 1% of 1% of cases.”
• There are strong beliefs that the trial court committed reversible error. So, the verdict (or part of it) may not stand on motion to the trial court and/or appeal, and it’s therefore possible the claim will ultimately get resolved at or near its reasonable value. Regardless, this is a massive verdict and there is considerable risk the case will resolve for over $100 million and more. There are simply too many variables and it’s too early to tell what the final quantum will be.
• It appears that plaintiff’s counsel asked the jury to award $1 billion at the end of the trial. It is also rumored that plaintiff’s counsel demanded a settlement amount before trial that exceeded the ultimate jury verdict of $352 million. Accordingly, Allied, the insurers and defense counsel may not have had a choice to have a trial and it’s conceivable that doing so saved money.

The takeaways from this jury award are that this is further evidence of “social inflation” and there will be a snap reaction among parts of the aviation legal and insurance industries that insurance rates should go up, and that claims should be settled more quickly and for more to avoid similar results. That said, this is still a single claim, it’s unclear what the final quantum will be and this is not the first or last time we will see a runaway verdict like this.

Considering all the circumstances, we as insurance brokers and advocates for our clients should not panic and instead take a much more measured approach. In other words, the proverbial sky hasn’t fallen in Texas or the rest of the country, and there is no strong reason to rush to settle or pay more for a claim that is defensible or has a value significantly lower than what the adversary is seeking just because of this jury award.

Disclaimer

Willis Towers Watson hopes you found the general information provided in this publication informative and helpful. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal advisors. In the event you would like more information regarding your insurance coverage, please do not hesitate to reach out to us. In North America, Willis Towers Watson offers insurance products through licensed entities, including Willis Towers Watson Northeast, Inc. (in the United States) and Willis Canada Inc. (in Canada).

This publication may contain information or materials created or provided by third parties over whom Willis Towers Watson has no control or responsibility. These third-party information or materials are not under Willis Towers Watson’s control, and Willis Towers Watson is not responsible for the accuracy, copyright compliance, legality, or any other aspect of such third-party information or materials. The inclusion of such third-party information or materials does not imply endorsement of any third parties by Willis Towers Watson or any association of Willis Towers Watson with any third parties.