August 1, 2003 - Putting a Leash on Dog-Bite Insurance Claims
Insurance companies are threatening to take a bite out of the lucrative practice of representing victims of dog attacks.
Plaintiffs' lawyers say dog-bite cases are simple and settle quickly, but carriers say the rising popularity of pit bulls, Rottweilers and other breeds capable of savaging humans is changing small-scale nuisance litigation into big business.
Dog bites account for one-third of homeowner-insurance claims nationally, according to the Insurance Information Institute, a trade organization. But a number of companies are refusing to write policies for owners of fierce breeds, and others are taking steps to limit or exclude coverage for canine attacks.
Shallower pockets could crimp the profits of dog-bite plaintiffs' lawyers, for whom recoveries have until now come in like clockwork. Juries tend to be sympathetic to dog bites. The victims are often children. The wounds are visually graphic and easy to quantify. Tales of teeth sinking into flesh stir a primal terror. It's rare for the plaintiff to lose if there's positive identification of the dog owner and a visible scar or disfiguration.
"We'd like to have more of them," said plaintiffs' lawyer M. Daniel Perskie. "Unlike automobile cases, where [jurors] are becoming jaded, when people see the holes, the teeth marks, the abrasions, they tend to settle. Attorneys like them because they're real injuries and they're not a hard case to prosecute."
What's more, New Jersey's strict-liability statute gives bite victims more rights than they have in New York and other states where the "one free bite" rule exempts pet owners from liability for the first injury caused by a dog. Here, N.J.S.A. 4:19-16 makes the dog owner liable for damages regardless of the former viciousness of such dog or the owner's knowledge of such viciousness.
"There's not a lot of moving parts to it," said Perskie, of Perskie & Wallach. "If Rover bit somebody, [the defendants] are liable."
The highest bite award reported by the New Jersey Law Journal in the past decade was a $3.15 million verdict in 1997 to two guard-dog handlers who claimed the past owner of a Rottweiler covered up its violent tendencies. Awards for serious facial injuries average in the lower six figures and scarring to the foot or hand averages $20,000 to $50,000, while facial disfiguration generally nets $75,000 to $250,000, said Raymond Gill Jr. of Gill & Chamas, whose firm has about 25 bite cases pending.
Defense attorneys admit bite cases are tough to repel. "It's similar to a res ipsa loquitur case," said New Jersey Defense Association President Thomas Hight, likening a dog attack to a pedestrian being hit by an object thrown out of a window. "Look, it happened, it shouldn't have happened. Dog-bite cases are physically ugly. People get very hurt."
The defense in bite cases is generally that the defendant doesn't own the dog, the defendant properly secured the dog or the victim provoked the attack, said Brian O'Toole, a partner at O'Toole & Couch. "When we don't get anywhere with that, we, generally speaking, try to settle the case. A defendant doesn't want to try a dog bite case. The only way you end up trying these cases is if the demand is excessive."
O'Toole has a unique definition of victory - he recalls three or four instances where he offered to settle for more money than the jury came back with.
But Hight said a defense lawyer's ability to mitigate damages with a provocation or lack-of-supervision defense is quite limited, especially with New Jersey's strict liability statute.
RISE IN ATTACKS
Ironically, what may burst the plaintiffs' lawyers' bubble is volume.
Canine attacks are on the rise. The New Jersey Department of Health and Senior Services reports that the number of bite victims requiring in-patient hospitalization in the state went from 270 in 1999 to 326 in 2001.
Insurance claims, too, are up. Carriers paid out $310 million for bite claims nationwide in 2001, up from $250 million in 1996 - a 24 percent increase - said Insurance Information Institute spokeswoman Alejandra Soto.
Insurance companies have resorted to changes in dog coverage because a higher proportion of dog bites are being litigated, while in the past parties tended to deal with a bite privately, said Soto.
As a result, some companies are placing breed-specific bans on coverage, while others are covering the first bite but not subsequent attacks.
State Farm Insurance Co., which writes more homeowner policies in New Jersey than any other company, paid 122 dog bite claims totaling $2.8 million in 2001, compared with 135 claims totaling $2.2 million in 1998 - a 27 percent increase in payouts. State Farm has not yet restricted the writing of policies for dog owners in New Jersey, said spokesman Ryan Salonia.
By contrast, Allstate, the state's third-largest provider of homeowner insurance, refuses to write homeowner policies for owners of pit bulls, Presa Canarios and wolf hybrids, said spokesman James Griffin. He added that there has been no increase in the number or size of payouts for dog bites but declined to provide specific award figures.
At the William Connolly Agency, which writes homeowners' policies for four companies, dog owners face a mixed bag. Selective and Quincy Mutual won't write policies for owners of certain breeds, while Chubb and Fireman's Fund don't differentiate, said Elaine Kane, director of personal lines.
Stephanie Shain of the Humane Society of the United States said her organization has begun monitoring what it calls discrimination against owners of certain breeds. It has found that dog-related restrictions on coverage vary widely by company and region, and even among different agents at the same company, said Shain.
Besides pit bulls, breeds targeted by insurance companies include large, powerful breeds like Rottweilers, German shepherds, Doberman pinschers, Akita and chows.
But Soto said the differentiation is a direct result of the severity of bite injuries increasing because of the popularity of larger and more powerful breeds.
"Chihuahuas bite all the time but you get two stitches. Dobermans don't bite as often as Chihuahuas, but when they do, a chunk of your arm comes out," Soto said.
She added that more owners are keeping large dogs in urban areas or crowded quarters, which increases the potential for injuries.
Not everyone believes that tightening of coverage is the result of an upswing in attacks or claims.
Kenneth Phillips, a Los Angeles plaintiffs' lawyer whose Web site is www.dogbitelaw.com, said the insurance industry is seeking to cut its liability for dog injuries because it, like everyone else, took a bath in the stock market during the last economic downturn.
Shain, of the Humane Society, said the crackdown was prompted by publicity surrounding the 2001 mauling death of a San Francisco woman, Diane Whipple, by a pair of Presa Canario dogs belonging to neighbors who were convicted of manslaughter.
If the insurance industry continues to pull back from representing dog owners, plaintiffs' lawyers may have to become more creative in achieving recoveries.
Plaintiffs' lawyers say most dog owners have homeowner insurance, but an uninsured owner isn't always a ground for declining representation of a victim. In the 1997 case that earned a $3.15 million jury verdict, the defendant was not the dog owner but a government agency that was its former owner. A Middlesex County settlement for $700,000 in August 2002 and an Essex County case last month that settled for $500,000 were both entered against landlords of properties harboring pit bulls.
Gill, the plaintiffs' lawyer from Woodbridge, has a pending case against the Monmouth County Society for the Prevention of Cruelty to Animals, claiming it failed to warn an owner of the violent history of the dog he adopted.
Phillips said the dog insurance crisis will prompt lawyers to test the waters by suing breeders for negligence when their dogs attack.
"From the standpoint of society, it's a terrible development," he said. "We need the insurance companies to help us keep track of dangerous dogs and help convince people to get rid of dangerous dogs. I think it's the wrong approach to the problem. There are too many people who are going to be affected by this movement to restrict coverage for canine injuries."
Shain said some animal shelters are reporting an upswing in owners turning in dogs because of the inability to obtain homeowner insurance.
Phillips suggested that insurance companies could write canine liability policies, just like people carry insurance on a car. But he added that the same companies that deny homeowner coverage to pet owners also refuse to write canine liability policies.
The Insurance Institute's Soto said none of her organization's members write canine policies and that to start the practice would first require investigation.
So far, though, there has been little dent in the enthusiasm of lawyers who make a specialty of bite cases. Louis Kotlikoff of Kotlikoff Littlefield & Fishman runs an advertisement that counters what he calls a natural hesitance of bite victims to sue. "Even if it happened years ago, children are protected up to age 20 in New Jersey," reads his ad, referring to the tolling of the statute of limitations.
Kotlikoff said insurance companies' efforts to limit dog liability haven't impacted his New Jersey practice but in Florida, where he also is admitted, he has encountered some defendants whose policies don't cover injuries caused by dogs or cap payouts at $50,000.
Bruce Regenstreich of Burrell & Regenstreich is creating a Web site known as bitbydog.com as part of an information campaign aimed at bite victims who are on the fence about suing or unaware of their rights. Victims and owners are frequently related, and potential clients often balk at suing relatives, he said. "Most plaintiffs' attorneys will take a dog bite case and put it on the back burner. This is an area where the more you do, the more you become known," said Regenstreich.