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Risky Business: You’ve been served - Multiple entities lead to large settlement

by Mary Ann Gormly

A man walked into a rental store and asked for the owner. When the owner came to the counter to speak with him, the man handed him an envelope and said those words everyone dreads, “You’ve been served.”

His business was being sued by a man injured at a job site. He was co-defendants with the manufacturer of a machine he rented and the contractor at the job site where the injured man was working.

The man was using a telescopic boom lift. The suit alleged among other things that:

  • The contractor failed to provide proper safety standards, including but not limited to safety standards on the use of aerial lifts, directly causing the man’s injuries.
  • The rental store employees failed to provide adequate instruction and training on the use of said lift.
  • The owner’s manual was not provided at the time of the rental.

The suit also stated that the man suffered severe and disabling injuries to his skin, organs, bones, muscles, nerves, tendons and other tissues, including but not limited to:

  • fracture of his right femur
  • multiple fractures to his ribs and vertebra
  • a collapsed lung
  • acute blood loss
  • bruising and abrasions
  • great physical pain and suffering along with the loss of the ability to pursue and enjoy the normal and ordinary pleasures of life

The suit alleged the injured man required medical treatment and suffered pain, scarring, restrictions on his ability to engage in normal activities and loss of earning capacity, past and future.

The delivery of the suit was the first the rental store owner knew of the incident. The lift had been and still was on a long-term rental to a contractor at a local construction site. The owner contacted his insurance agent who, in turn, reported the claim to the insurance company, which opened an investigation.

It was discovered that there was no documentation indicating that maintenance had been done at all since the lift had been purchased. Also, the warning labels were worn and no longer clear.

The contractor shared responsibility for not verifying his workers were using the lift on a flat, level surface. The injured man himself was at fault for using the machine improperly. Witnesses stated that the lift was being used on unlevel terrain at the edge of the job site where the ground began to slope downhill.

When the lift was rented by the contractor, he said it would be used on a level, hard surface.

Prior to mediation, defense counsel stated that if the lawsuit went to trial, the jury could return an adverse verdict of between $750,000 and $1.2 million.

The rental store’s portion of the claim was settled for just under $400,000 as part of a confidential agreement with the injured man and his attorney. There were multiple entities involved in the settlement negotiations and that amount is just one small part of the much larger settlement amount.

Mary Ann Gormly, CERP, is a loss analyst for ARA Insurance, Overland Park, Kan. For more information, call 800-821-6580 or visit ARAinsure.com.