Case continues to cost taxpayers 4 years later

By Mike Carter
Seattle Times staff reporter

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In the four years since the state failed to appeal a record $17.9 million verdict against one of its agencies, the case has continued to cost taxpayers money.

The jury award ultimately grew by $1.1 million, to $18.9 million, because interest accumulated while the state sought in vain to file a late appeal.

And since the award was paid in the fall of 2000, the state has spent $300,000 more on private attorneys defending Attorney General Christine Gregoire, her aides and others in a lawsuit filed by Janet Capps, the former assistant attorney general whom Gregoire blamed for the botched appeal.

An additional $181,570 has been paid to attorneys handling a variety of Beckman-related work, including the attempts to file a late appeal, an investigation of the missed appeal, and a lawsuit filed against the state by its own insurers. (During the original trial, the state hired outside lawyers to help with the trial, at a cost of $232,000.)

Beckman also contributed to a longer-lasting, more costly problem: a strained relationship between the state and its insurance providers.

As a result of the Beckman mistake and other significant verdicts and settlements in 2000-2001, the state's insurance deductible jumped from $5 million to $25 million for claims against the Departments of Social and Health Services (DSHS) and Corrections.

For all other state departments, the deductible amount was increased from $5 million to $15 million, said Betty Reed, director of the Division of Risk Management.

One factor in the insurance change was a verdict that followed within months of Beckman and was even larger: a $22.4 million award handed down against the Department of Corrections in September 2000. Paula Joyce, a Tacoma woman, was killed when her vehicle was hit by a stolen car being driven by an unsupervised felon.

Another factor was the state's $8.8 million settlement in the case of Linda David, a woman who was brutally abused for years by her husband, who had been paid by the state to take care of her.
 
Had the state been able to rely on its insurance policies, taxpayers would have been responsible for the first $5 million in each of the three cases, and the state's "excess" insurance coverage would have picked up the rest.

Instead, the state's liability has been much higher.

In the Beckman and David cases, the state's insurers complained that the state had failed to notify or involve them, and they sued for breach of contract. In Beckman, for instance, the insurers had urged the state to accept a $7.3 million settlement offer by the plaintiffs, but the Attorney General's office, DSHS and risk management refused, according to pleadings in the lawsuit.

The insurers won, and the state had to pay the total amounts in both those verdicts.

The Joyce award, meanwhile, was appealed while the state worked out its new coverage. The award was upheld last month by the Court of Appeals and falls under the new deductible policy. That means that if the final judgment is entered for $22.4 million, the state will be liable for the entire amount.

Mike Carter: 206-464-3706 or mcarter@seattletimes.com

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