HOA settles with Trayvon Martin's parents

[CypherNinja]

Saw this last night, but was too tired to post it. I'm surprised it hasn't been posted here yet.

www.latimes.com/news/nation/nationnow/la-na-nn-trayvon-martin-reportedly-settle-wrongful-death-claim-20130405,0,7755890.story

[MillCreek]

Saw this last night, but was too tired to post it. I'm surprised it hasn't been posted here yet.

www.latimes.com/news/nation/nationnow/la-na-nn-trayvon-martin-reportedly-settle-wrongful-death-claim-20130405,0,7755890.story

What is interesting to me in that story was the account that the HOA bought an insurance policy (presumably liability) after the shooting.  Ordinarily, a policy bought after an event will not cover any liability events that already occurred before the effective date of the policy.  You can buy a policy on 6 April, and make the effective (retroactive) date of the policy 1 January, but you usually pay more for that.  In this particular case, if the liability policy covered the settlement of the wrongful death case, and the policy was bought with the knowledge of the shooting that had already occurred, the HOA would have paid a very large premium for that policy.  

I wonder if in fact the HOA's new liability policy did indeed cover the wrongful death claim, or did they have insurance purchased earlier that did.  I have always made sure that my HOAs have appropriate property and liability insurance.

[MechAg94]

I am sort of surprised they settled before the criminal trial was finished.

[Fly320s]

Legal question about HOAs: In this case, if the HOA lost the suit and had to pay damages, would the homeowners be responsible for that? For instance, if the HOA said, "No, we won't pay" would the individual homeowners then be legally on the hook for the damages?  And what happens when a homeowner moves away?

[MillCreek]

Legal question about HOAs: In this case, if the HOA lost the suit and had to pay damages, would the homeowners be responsible for that? For instance, if the HOA said, "No, we won't pay" would the individual homeowners then be legally on the hook for the damages?  And what happens when a homeowner moves away?

Generally speaking, no.  If a HOA had a legal judgment that exceeded the amount of any insurance coverage, than the Association bank accounts, real and tangible personal property owned by the Association would be subject to seizure to satisfy the judgment.  The judgment would not pass on to the homeowners in the association.  The Association would probably dissolve or declare bankruptcy and a new Association could be formed.

I know that HOA law is complex and depending on the law of the jurisdiction and how the HOA is legally structured, I suppose there could be an outside chance that the liabilities of the HOA could be passed on to the homeowners or that the HOA could impose a special assessment to the homeowners to pay the judgment. 

But I suspect that for the garden-variety HOA, my first paragraph is correct.  I have always carefully read the HOA paperwork for every HOA that I have been a part of, and I have never seen the possibility of liability of the HOA being passed on to me.   

[Tallpine]

Generally speaking, no.  If a HOA had a legal judgment that exceeded the amount of any insurance coverage, than the Association bank accounts, real and tangible personal property owned by the Association would be subject to seizure to satisfy the judgment.  The judgment would not pass on to the homeowners in the association.  The Association would probably dissolve or declare bankruptcy and a new Association could be formed.

I know that HOA law is complex and depending on the law of the jurisdiction and how the HOA is legally structured, I suppose there could be an outside chance that the liabilities of the HOA could be passed on to the homeowners or that the HOA could impose a special assessment to the homeowners to pay the judgment. 

But I suspect that for the garden-variety HOA, my first paragraph is correct.  I have always carefully read the HOA paperwork for every HOA that I have been a part of, and I have never seen the possibility of liability of the HOA being passed on to me.   

Basic corporate protection from personal liability, correct?

I am sort of surprised they settled before the criminal trial was finished.

Yeah 

I didn't read the links, but wondering if this the $1 and no disclosure sort of thing 

[dogmush]

I am sort of surprised they settled before the criminal trial was finished.

Me too.

Benjamin Crump, attorney for the Martin family, was not available for comment on the reported settlement of the family's civil case. When asked by the Sentinel about the amount, he told a reporter: "I have no comment on that subject.… I know you did not get that from me."
Crump has said he plans to file suit against Zimmerman at some point.

We'll see.  If Zimmerman is found to have acted in self defense FL law protects him from civil liability.

[MillCreek]

I didn't read the links, but wondering if this the $1 and no disclosure sort of thing 

I suspect not.  Other stories I have read suggest that the settlement was over $ 1 million.

And the HOA was sued because they are the deep pocket, and were vicariously liable for the actions of Mr. Zimmerman, in his persona as part of the HOA/neighborhood block watch.  I imagine that Mr. Zimmerman may not have sufficient personal assets to make it worthwhile to sue him, but if he has homeowners' liability insurance that would indemnify a wrongful death claim, that may make it financially feasible to sue him.  I recall also that he had received certain sums of money as donations for his legal defense, and that money may also be accessible in a civil suit against him.

[dogmush]

I suspect not.  Other stories I have read suggest that the settlement was over $ 1 million.

Links?  The stories I have read said that the insurance policy was for $1 mil.  The amount was undisclosed, and redacted from records.

I suspect that we're looking at a settlement that was less than the cost of lawyers fees to fight it.  While the HOA is not protected from liability in the case of an acquittal, it would be a handy piece of evidence.  And the trial starts soon.

[MillCreek]

Links?  The stories I have read said that the insurance policy was for $1 mil.  The amount was undisclosed, and redacted from records.

I suspect that we're looking at a settlement that was less than the cost of lawyers fees to fight it.  While the HOA is not protected from liability in the case of an acquittal, it would be a handy piece of evidence.  And the trial starts soon.

Do the same Google I did: 'Trayvon Martin HOA lawsuit' and you will see the articles.  Those that I read stated that the insurance company offered policy limits to settle, was refused, and the ultimate settlement was more than $ 1 million.  So I suspect that the HOA or the insurance company ponied up some additional cash.  

And I do settlements all the time for less than the cost of legal fees, but this case probably is not an example of that.

PS: the article in the Orlando Sentinel states that Travelers Insurance, who provided the liability policy back in March, did not pay the settlement, and in fact filed a declaratory judgment suit to establish that their policy did not cover this incident.  So it was either the other insurers or the HOA who paid the settlement.

[RevDisk]

I am sort of surprised they settled before the criminal trial was finished.

Unless they got a very good price for settling, I'm kinda surprised as well. I doubt they can or will counter sue if the criminal trial falls apart. Why on earth would you not drag feet until the criminal trial is settled, unless they want a very reasonable settlement.

[makattak]

And this was the whole reason their blood sucking lawyer politicized the case. Without playing the race card and getting the black community righteously indignant about sweet little angel Trayvon, Zimmerman would never have been arrested which means no ka-ching for him.

[lupinus]

And this was the whole reason their blood sucking lawyer politicized the case. Without playing the race card and getting the black community righteously indignant about sweet little angel Trayvon, Zimmerman would never have been arrested which means no ka-ching for him.

You left out the little tithe heading for certain "Reverends"

[MillCreek]

Unless they got a very good price for settling, I'm kinda surprised as well. I doubt they can or will counter sue if the criminal trial falls apart. Why on earth would you not drag feet until the criminal trial is settled, unless they want a very reasonable settlement.

In regards to the civil suit, both sides faced risks with waiting until the criminal trial to be concluded.  If Mr. Zimmerman is found guilty, that could drive up the value of the civil suit and the HOA would have to pay more to settle it, since evidence of the criminal conduct of the HOA's agent, Mr. Zimmerman, could likely be introduced into evidence.  If Mr. Zimmerman is found innocent, that could drive down the value of the civil suit, and the plaintiffs would have to take less to settle it, since evidence that the HOA's agent had been exonerated could likely be introduced into evidence.

I have faced similar situations in healthcare civil litigation in which a provider was being sued for malpractice and concurrently dealing with criminal charges arising out of the same course of action.  A good example would be running a pill mill in which the provider was selling prescriptions.  If a jury hearing the civil malpractice case of someone who died from an overdose learns that the doctor is doing 10 years at Club Fed for selling prescriptions, they are going to award a higher amount of money.  You can try to keep out the conviction on the grounds that it would be prejudicial to the defendant, but that often does not work since it goes to impeachment by evidence of conviction of a crime.  So I would usually try to settle those cases before the criminal trial.

So settling before the outcome of the criminal trial was prudent risk management for both sides.  No matter the outcome of the criminal trial, the bargaining power of one side or the other would have been hurt.  I suspect that the HOA was more worried than Mr. Martin's parents in terms of the outcome of the criminal case and was more eager to settle.  Note that the HOA was only in the case as being vicariously liable for Mr. Zimmerman as being on duty for the HOA neighborhood watch, and that was sufficient to establish an agency relationship.  I bet that HOA attorneys and risk managers all over the country are now going to be advising their clients to stop officially sponsoring or facilitating any sort of neighborhood watch program to eliminate this agency exposure.

[MechAg94]

I bet the HOA also has a fund set aside for this sort of thing and it was doable.

[tracystarling]

Although money is something that cannot be just left down, The grief of Martin's Parents must hardly has got down.

[Fitz]

Wat

[French G.]

Wat +1?

Grief maybe. Realization that their paenting raised a kid who thought it was okay to roam the streets and commit assault? Probably not. Sow the wind and all...