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March 12, 2014

Accident victim gets $18 million settlement

NEW CASTLE — A disabled Shenango Township man will be taken care of for the rest of his life.

The Lawrence County courts approved an $18 million settlement, intended to care for the accident victim and believed to be the largest ever in Lawrence County.

“We’re very pleased with this result,” said attorney Dallas Hartman, whose New Castle firm has represented the family of accident victim Stephen Piper for a decade.

 “The family has been through a lot,” he said. “This is a fair outcome that will enable them to provide for Stephen’s care.”

Attorney Douglas Olcott of Hartman’s firm presented the petition Tuesday to Judge J. Craig Cox, seeking approval of the settlement and distribution.

On Feb. 22, 2003, Stephen Piper, then 15, was a passenger in a car driven by his brother, Kyle Piper.

According to police, Kyle Piper, then 17, lost control of his car on a wet Route 422 in Union Township and struck a steel pole. The car split in half.

Stephen Piper sustained extensive injuries, including traumatic brain injury resulting in diminished mental capacity.

Olcott said Stephen functions at the level of an 8-year-old. He spent weeks in intensive care, months in rehabilitation.

At the time of the accident, according to court documents, the family was insured through Erie Insurance Exchange and believed $200,000 in uninsured motorist benefits and another $100,000 in liability coverage was available for Stephen.

When the insurance company refused to settle the claim, Hartman represented David and Joyce Piper, Stephen’s parents and guardians, and sued their older son on Stephen’s behalf.

In March 2007, a Lawrence County jury approved a $15,602,612 award against Kyle Piper to provide for Stephen’s care. This was the largest jury verdict in Lawrence County to date, according to Hartman.

Without assets to satisfy the $15.6 million judgment against him, Kyle Piper contended in legal filings that Erie Insurance was obligated under terms of his insurance to defend him against claims rising from the accident.

Two months later, Kyle Piper’s parents sued Erie Insurance on his behalf, claiming breach of the insurance contract and bad faith.

Erie Insurance contested liability and damage aspects.

Following years of legal wranglings on the consolidated bad faith cases and various suits and countersuits, all parties agreed to mediation.

Although that November session ended without a resolution, an agreement was reached, pending court approval.

Olcott said that while the insurance company admits no wrong-doing, it agreed to the $18 million settlement.

The settlement disburses the money provided by Erie Insurance and two insurance companies that insure Erie. The terms include:

•$5 million to the Stephen T. Piper Self-Settled Special Needs Trust.

•$4,373,245 from the gross proceeds to purchase a structured settlement that will provide $10,000 per month for Stephen Piper’s life, paid into the special needs trust.

•$117,372.79 — from the $15.6 million judgment awarded in 2007 — is directed to partially reimburse medical expenses paid for by the government. The Pennsylvania Department of Public Welfare will receive $62,446.91 and Medicare, $227.29. The remainder will go to the new special needs trust.

•$750,000 will be paid to David G. and Joyce E. Piper, to cover expenses for their son’s care.

•$596,652 will be paid to Kyle A. Piper. This will discharge his obligations under the 2007 verdict. From that, he will pay attorney Daniel S. Soom $8,000 for legal services.

Attorneys’ fees and costs make up $7.2 million — 40 percent — of the award:

•$2,950,112.25 to the Philadelphia law firm of Ross Feller Casey

•$2,889,990 to the Dallas W. Hartman law firm

•$720,000 each to attorneys Phillip Clark Jr. and Jonathan Solomon, both of whom assisted Hartman’s firm.

(Email: nlowry@ncnewsonline.com)

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