A horrific car-crash case that came within a hair’s breadth of settling for $300,000 last year resolved instead for more than 16 times the original amount.
The $5 million settlement, approved March 12 in Jackson County Circuit Court, will provide period payments over the lifetime of plaintiff Ali Malik, who was a year and a half old when a car barreled into the back of his mother’s vehicle, leaving him with traumatic brain injuries. Yet when the parties originally attempted to settle in 2013 for the at-fault driver’s policy limits, the insurance company, American Family, failed to follow a judge’s order to set up such a “structured settlement.”
In opposing the settlement, the insurance company appeared to have forgotten the court’s ultimate power to determine what’s fair for a minor plaintiff.
“Every single settlement that exists between an insurance company lawyer and a lawyer for the child is tentative,” said Dirk Vandever, one of the plaintiffs’ attorneys. “It has to be.”
On Jan. 16, 2010, Farah Malik and her three young children were in a vehicle turning into the driveway of a library in Smithville when David Slaughter rear-ended them. According to the Maliks’ initial attorney, Matt Meyerkord, the Malik vehicle was at a near-complete stop when Slaughter’s pickup truck struck it at about 60 mph, smashing the Mazda sedan and pushing it the length of a football field.
The plaintiffs alleged in court that Slaughter was under the influence of marijuana and prescription medication, though the defendant denied that. According to court records, Slaughter faced charges in Smithville Municipal Court related to the accident and pleaded guilty to reduced charges of failing to maintain a single lane and disorderly conduct.
Slaughter had an auto insurance policy with a $300,000-per-occurance limit. Three years after the accident, the Malik family and the insurer asked a Jackson County circuit judge to approve a settlement for those limits. After attorney fees and medical bills, it would have netted about $91,000 to be split between Ali and his two siblings. Given the nature of Ali’s injuries, Meyerkord asked that his settlement be in the form of an annuity, which Judge John Torrence approved in May 2013.
American Family, however, requested that the court reconsider that ruling and set aside the settlement. It’s not entirely clear why. According to the plaintiffs’ attorneys, such a settlement wouldn’t have been any more difficult or expensive for the insurer.
An attorney for American Family, Chris Carpenter of Sanders, Warren & Russell, declined to comment, and a spokesman, Ken Muth, said the insurer doesn’t comment on settlement procedures. In court filings at the time, American Family said the contract between the parties didn’t call for such an annuity.
“Missouri law does not allow a court to add provisions beyond the terms of the settlement,” Daniel DeFoe, an in-house attorney for American Family, wrote in a brief.
Meyerkord argued that the insurer had repudiated the settlement and urged the court to allow a trial on the merits. To help, he brought in Vandever, of the Popham Law Firm, and Andy Gelbach, of the Gelbach Law Firm, who said they were baffled by the insurer’s actions.
“I had to ask more than once, ‘Are you sure that’s what happened?’ ” Gelbach said.
Shortly afterward, Slaughter filed for bankruptcy. That briefly halted the litigation, though the bankruptcy judge allowed the suit to proceed. In an ironic twist, the bankruptcy proceedings led the plaintiffs to discover that more insurance coverage was available than originally thought. Slaughter held policies for four vehicles through American Family, and under prior Missouri caselaw, some of the proceeds of those policies could be applied to the Malik accident.
Meyerkord said that would have afforded only $75,000 more in coverage, but the amount turned out to be less important than the fact that American Family had failed to mention them in the first place. In a January order, Torrence said the insurer’s “material misrepresentations” voided the original settlement.
“The court has a responsibility to enter judgments in the best interest of the minors, which can only happen if accurate information is provided about the number of liability insurance policies and/or amount of coverage available to settle a minor’s personal injury case,” the judge wrote.
The case was set for trial in March before Judge Robert Schieber on negligence and punitive damages claims. A week before trial, however, the parties reached the $5 million settlement. According to the plaintiffs’ attorneys, Ali’s parents will receive $500,000 of that. A separate settlement was reached for Ali’s siblings, Bisma and Taha, for $33,333 each minus expenses, which is what they would have received in the original 2013 settlement.
After attorney fees and expenses, Ali Malik, now 5, will receive more than $2.2 million — to be paid, American Family now agrees, over his lifetime as part of a structured settlement.
$5 million settlement
Motor vehicle collision
Venue: Jackson County Circuit Court
Case Number/Date: 1316-CV01505/March 12, 2014
Judge: Robert Schieber
Insurer: American Family Mutual Insurance Co.
Caption: Ali Malik through next friend Kamil Malik v. David Edward Slaughter
Plaintiffs’ attorneys: Andy Gelbach, The Gelbach Law Firm, Warrensburg; Dirk Vandever, The Popham Law Firm,
Kansas City; Matt D. Meyerkord, Meyerkord & Russell,
North Kansas City
Defendant’s attorney: Chris Carpenter, Sanders, Warren & Russell, Overland Park, Kan.