PADI getting sued over Insurance Program

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It is like the drunk driver example someone posited earlier. You can't sue drunk drivers for driving drunk and hope to win. You can't even sue them for hurting a stranger or damaging a stranger's property.
But could the drunk driver be sued if he causes an accident, the street is closed and as a result, and ambulance can not reach an unrelated case where the unrelated party dies because of delayed treatment.

I guess, my question is if PADI would delay the process, (since they are not in insurance business, and are not as efficient) and as a result the shop did not open in reasonable time for the new season, and missed an opportunity to make any money before season slows down, and as a result brings them to the brink of bankruptcy.
Would that be considered "damages"?

Just pulling stuff out of thin air. I'm not following the case that closely.
 
But could the drunk driver be sued if he causes an accident, the street is closed and as a result, and ambulance can not reach an unrelated case where the unrelated party dies because of delayed treatment.

I guess, my question is if PADI would delay the process, (since they are not in insurance business, and are not as efficient) and as a result the shop did not open in reasonable time for the new season, and missed an opportunity to make any money before season slows down, and as a result brings them to the brink of bankruptcy.
Would that be considered "damages"?

Just pulling stuff out of thin air. I'm not following the case that closely.

One of the many things wrong with PADI's insurance business plan is the expectation that claims will be handled in a manner consistent with industry standards. There appears to be many deviations from typical state insurance regulations. I would venture to guess that changes have already been made to the program in order to close the gap in impropriety...
 
Is there anyone out there who can cite us to a statute or regulation that says that an insured, who, for a fee, allows others to be additional insureds under its policy, is acting as an insurer?

I know that there are group life and disability policies where the employer is the insured and the employees are just certificate holders ... and that seems to be legal... though I do not know who, if anyone, pays what.

Also, could someone please send me a copy of their "PADI policy"? I'd sure like to read it.

As far as whether I understand the issue, please rest assured I do. If what the complaint alleges is true, it stinks to high heaven. However, that does not mean the law recognizes a right to recover.

As far as the right to recover, let me say a few things about California law:

1. If you watch me get hit by a negligent driver and you sustain severe emotional distress (rather than joy) at seeing it, you have no right to recover for your emotional distress.

2. If you watch a close relative hit by a negligent driver and you sustain severe emotional distress, you may to recover for your emotional distress.

3. If you hear a crash, run outside and see a close relative lying on the ground after being hit by a negligent driver and you sustain severe emotional distress, you may not recover for your emotional distress.

Why the differences? Thats because that's just how it is. The law recognizes some things as compensable and others as not.
 
But could the drunk driver be sued if he causes an accident, the street is closed and as a result, and ambulance can not reach an unrelated case where the unrelated party dies because of delayed treatment.

The drunk driver could be sued, but the drunk driver has a 90% chance of winning. The rationale is that the injury was not a foreseeable result of the drunk driver's negligence.

I guess, my question is if PADI would delay the process, (since they are not in insurance business, and are not as efficient) and as a result the shop did not open in reasonable time for the new season, and missed an opportunity to make any money before season slows down, and as a result brings them to the brink of bankruptcy.
Would that be considered "damages"?

Assuming things are as alleged in the complaint against PADI, this is a whole different can of worms. First, PADI would be in a contractual relationship with the shop and thus would have a contractually based duty. Second, depending on exactly what it was doing in connection with the claims process, PADI might be deemed "in the business of insurance" yet still not be required to be licensed as an insurance carrier.

But, let me go a step further: If a shop had a loss that was otherwise covered and PADI failed to pay the deductible or unreasonably delayed paying it, PADI would likely have a very serious problem on its hands.

NOTE: Is it really true that a shop with the PADI policy could not tell from reading the "policy" that it was only a certificate holder or that there was a deductible? I only like Lexington when it pays my clients lots of money to settle, but I have a hard time believing it would not have covered its bases with all sorts of disclaimers and what-have-you-not in whatever gets issued to the shops.
 
Is there anyone out there who can cite us to a statute or regulation that says that an insured, who, for a fee, allows others to be additional insureds under its policy, is acting as an insurer?

On a typical small business commercial liability policy, the insured would for say $50 be able to add a landlord as an additional insured. In the dive industry, I am sure it is common for independent instructors to name their affiliated LDS's as additional insureds.

I know that there are group life and disability policies where the employer is the insured and the employees are just certificate holders ... and that seems to be legal... though I do not know who, if anyone, pays what.

The employer would only be an insured if also included in the policy like the employees. Group life and health policies are simply communal policies for efficiency purposes. The employer could pay all or only some of the premiums.
 
The drunk driver could be sued, but the drunk driver has a 90% chance of winning. The rationale is that the injury was not a foreseeable result of the drunk driver's negligence.

REALLY? Are you saying that the drunk driver had ABSOLUTELY NO IDEA that his driving drunk could cause a "problem" ??? Would this have been his "first sip" of alcohol ? Would M.A.D.D. (Mothers Against Drunk Driving) ever have been established if this were true? Either in a criminal trial or a civil action ... I find it hard to believe that the drunk driver has a 90% of winning.

Dang ... even "I" could present this to a jury of 12 peers and get paid.

Gimme a break.



Assuming things are as alleged in the complaint against PADI, this is a whole different can of worms.

Let's consider it a "working point".

First, PADI would be in a contractual relationship with the shop and thus would have a contractually based duty.

There are a lot of dive shops who might agree with this point.

Second, depending on exactly what it was doing in connection with the claims process, PADI might be deemed "in the business of insurance" yet still not be required to be licensed as an insurance carrier.

Won't the AG of California be tending to that "detail"? Is this the same thing as being in the business of teaching someone to scuba dive and NOT being an Instructor? Don't ya just HATE those pesky "details' that keep getting in the way of making $2.2 million for doing nothing every year? Oh .. that's right ..., some people think that PADI was actually working AS an insurance company, so I guess that makes it OK.

But, let me go a step further: If a shop had a loss that was otherwise covered and PADI failed to pay the deductible or unreasonably delayed paying it, PADI would likely have a very serious problem on its hands.

OMG ... do you think??? Could this be something that Kauai Scuba should look into?

NOTE: Is it really true that a shop with the PADI policy could not tell from reading the "policy" that it was only a certificate holder or that there was a deductible?

It's True ... Oh ... so very, VERY true !!!"

I only like Lexington when it pays my clients lots of money to settle, but I have a hard time believing it would not have covered its bases with all sorts of disclaimers and what-have-you-not in whatever gets issued to the shops.

The issue seems to be more about PADI and NOT about what Lexington may-or-may-not-have-disclosed.
 
Also, could someone please send me a copy of their "PADI policy"? I'd sure like to read it.

Ah, come on .... like you have NEVER read a PADI policy from either a dive shop, a dive center, a dive resort, or an individual dive instructor! Yet, you state that you have been involved in dive law insurance law suits for decades?

You seem to have nearly instant online access to the case at hand and yet pretend that you have never seen a PADI policy?

At the risk of making this seem like it's "too personal" and being "monitored" into obscurity ... really?

Again ... just my opinion and we all know what that's worth.
 
I just read the second amended complaint. It is fascinating.

Here is why: The basic theory of the case is that dive shops buy insurance through the PADI program thinking they are getting insurance under which Lexington pays every dollar of every loss, up to the policy limits, when, in fact, PADI pays the first $300,000. As a result, the shops are not getting as valuable a policy as if Lexington were paying the whole loss; and no one told the shops this.

And some people thought that you didn't understand .... you are SUCH a tease !!!

The second amended complaint (SAC) tries to plead eleven (11) different legal theories as to why the various defendants should be liable for doing what I have described above as being alleged.

While I am not an attorney, although I have played one on a dive boat, (to quote another poster here), isn't this the Spaghetti Theory approach? Throw enough on the wall and see what sticks? You NEVER know which one the Judge might like.


(Like ANY experienced Attorney/Litigator has done before ???)


If what is alleged about the program is accurate, it is a shabby practice.

Good point.

If what is alleged about the program is accurate, the "insurance" the shops are getting is not as good as they may have believed.


Excellent !!!

If what is alleged about the program is accurate, the shops may have been overpaying for what they were getting.

May we quote you on this?
 
But, let me go a step further: If a shop had a loss that was otherwise covered and PADI failed to pay the deductible or unreasonably delayed paying it, PADI would likely have a very serious problem on its hands.
Obviously, the above is hypothetical. But I was under the impression that A situation very similar started the whole thing.

But than again, I really don't have any knowledge of the case.
 
PuMpUi:

1. I am not going to take the time to look at the whole thread to see what your stake in this case may or may not be. Please remind me. I get the impression you have a stake in the fight. If I'm wrong let me know.

2. As far as the drunk driver example, you are entitled to your opinion; wrong though it is. Whether a particular defendant owes a particular plaintiff a duty of care is a central focus in tort law. In California, the initial determination as to whether there is a duty of care is made by the judge, not the jury. The determination is based on a number of factors, including the foreseeability of the particular harm. If there is no duty of care, that's the end of the case. For example, the California Supreme Court has said that someone on a beach has no duty to help a drowning swimmer unless he (1) caused the swimmer to go swimming, (2) told the swimmer he would call for help in the event of a problem, or (3) prevented someone else from rendering aid. Other than those three, the person on the beach can take photos of the drowning swimmer. There are lots of other instances in which the courts have told us there simply is no duty of care owed.

I am very confident that a drunk who causes an accident which results in the street being blocked, which results in an ambulance being unable to reach someone with an unrelated problem won't be found liable to the victim of the unrelated problem because the court will say there is no duty. I would never take the case against the drunk driver on a contingency fee basis. And, if I took it on an hourly basis, I'd make sure I had a signed writing acknowledging that I had advised my client it was a poor case.

If you think you could win it, ... whatever.

3. I cannot make sense out of your remarks about the AG or about "pesky details." For better or worse, it is the details that determine the outcome of a lawsuit. There is a pretty significant California case where the victim of a horrific motorcycle crash that resulted from a kickstand that did not fold out of the way when it hit the ground during a sharp turn lost because she could not establish that the kickstand was manufactured by the defendant as compared to being a knockoff manufactured by someone else. Just a "pesky detail" I suppose.

Certain activities that are considered to be "in the business of insurance" do not require one to be licensed as an insurance company. Sorry, but that is how it is. I did not make the rules.

4. As far as failing to pay or an unreasonable delay in payment, I've said it before and I'll say it again: I am surprised that Kauai Scuba has not alleged a cause of action based on bad claims handling. Do not ask me why it hasn't as I have no clue. All I know for sure is that it is not in the original complaint, the first amended complaint or the second amended complaint.

5. You say: "Ah, come on .... like you have NEVER read a PADI policy from either a dive shop, a dive center, a dive resort, or an individual dive instructor! Yet, you state that you have been involved in dive law insurance law suits for decades?"

Perhaps you are confusing me with someone else.

I have never suggested that I've been involved in dive insurance law for decades. I've been involved in insurance law since 1984. Most of it is homeowners insurance and automobile insurance. Much of it is commercial general insurance. Some of it is inland marine insurance. Some of it is yacht insurance. Some of it is life and disability insurance. I've handled some scuba cases, but always under either homeowners or yacht policies. I provided information to Jay Stone of Blue Cheer, may he rest in peace. However, I have never had the need or opportunity to read the PADI policy. I was only interested in it so I might be able to address issues on this topic, and then only for the benefit of those reading it.

Believe me about what I have or haven't read, or not. I don't really care about you in particular.

6. You say: "You seem to have nearly instant online access to the case at hand and yet pretend that you have never seen a PADI policy?"

Of course I have nearly instant online access. Go to https://pacer.login.uscourts.gov/cgi-bin/login.pl. It is pretty simple. All anyone needs to do is sign up for an account with the federal court system. I would expect that every lawyer who practices in the federal courts has a "PACER" account. I do not mind spending a few dollars to check the docket sheet and download documents. I get useful information from Sciubaboard and the least I can do is provide input on topics where I have a degree of expertise.

Why do you say that I am pretending I have never seen a PADI policy? If you have a stake in the fight, then consider whether perhaps you are imagining things in order to make yourself feel better about it. It won't be the first time someone has fallen into that trap. Incidentally, you do not need to convince me you or anyone else has a good case. I don't really care. I am not the judge on this case and am not the clerk for the judge on this case.

7. You say: "And some people thought that you didn't understand .... you are SUCH a tease !!!"

Anyone who thought I didn't understand the basis of the lawsuit must be an idiot. I've had a good handle on it from the moment I first read the complaint, which I found out about on this thread. I simply question whether the law provides recourse.

8. Playing a lawyer without being licensed as one is a felony.

9. Some lawyers subscribe to the spaghetti theory. In my experience, that is usually either to intimidate an opponent, to impress a client or because there isn't a real good legal theory. When I represent a plaintiff, I go with one or two solid causes of action. (If I can't come up with one or two solid causes of action and need to go with the spaghetti approach, I don't take the case.) when I represent a defendant, I prefer a plaintiff who uses the spaghetti approach. They are easier to beat. I'm far more fearful of one solid cause of action.

10. Quote me as you wish. What I post does not count for much. If you want to send me a royalty for quoting me, I won't turn it down. I will not, however, render expert opinions on claims handling or coverage matters without a retainer agreement and a retainer in my trust account.

Incidentally, just because the shops may be overpaying for what they are getting, that does not mean that there is a remedy. Just think, even with the high price of gasoline, bottled water is still more expensive per gallon. Yet, no one can sue bottled water vendors for overpricing water.
 

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