Pellegrin v. National Union Fire Insurance Company of Pittsburgh, PA

Pellegrin v. National Union Fire Insurance Company of Pittsburgh, PA

This case arises out of an auto accident in a parking lot in which the plaintiff, Mark Pellegrin, was struck by a drunk driver and so severely injured that he will be incompetent for the rest of his life. The car was leased by the driver’s employer and insured by National Union, which denied coverage on the ground that the driver was drunk and refused to defend.  Suit was brought against the driver in North Carolina state court by Mark’s father as guardian ad litem, and an uncontested bench trial resulted in a $75 million verdict.  Mr. Pellegrin then filed suit against National Union, alleging that the insurer was liable under its automobile liability policy and its umbrella policy for up to $21 million. National Union removed to federal court on the basis of diversity jurisdiction. In mediation, the parties agreed to a settlement of $18 million. The settlement was then submitted to District Judge Terrence Boyle for approval. Judge Boyle approved the settlement only after amending the provisions for the fee for plaintiff’s counsel.  Plaintiff’s counsel had agreed to representation for a contingency fee of 33 1/3%.  Judge Boyle ruled that, under the circumstances of this case, such a fee would be unconscionable, and reduced the fee to $600,000 plus $35,000 in expenses.  Public Justice and the American Association of Justice filed an amici brief that focuses on the important role that contingency fee arrangements have played, both historically and presently, in giving victims the opportunity to seek justice.  The brief was authored by Jeffrey White of the Center for Constitutional Litigation, with assistance from Public Justice’s Leslie Brueckner.