Cochran Secures Landmark $28.5 Million Settlement With Insurance Company For Breach Of Conduct

By Darrell Cochran Law

Insurer Failed To Honor Premium, Defend Child Care Center In Sexual Misconduct Cases

In a significant legal victory, attorney Darrell Cochran and team from Pfau Cochran Vertetis Amala have achieved a landmark $28.5 million settlement in a case involving breach of contract by an insurance company whose identity can’t be disclosed per the terms of the agreement. The settlement, which stands as a testament to the resilience and dedication of Cochran and his team, ends a 12-year legal battle stemming from horrendous child sexual abuse by a child care worker at the Olympia Early Learning Center (OELC) in Olympia, Washington.

CASE BACKGROUND

The case goes back to January 2011, when Elisha Tabor, a worker at OELC was caught sexually abusing a young child in his care. This discovery led to a police investigation revealing Tabor as a serial child molester. Tabor was eventually sentenced to a lengthy prison term.

OELC had an insurance policy intended to cover such catastrophic events including providing relief to victims. Despite regularly paying its premiums, the insurance company refused to honor its contract and denied claims, neglected to inform the center about its coverage and failed to take adequate steps to investigate and settle the claims. This negligence left the daycare and its victims without the necessary support and protection they were entitled to under the insurance contract, and exposed OELC to tens of millions of dollars in liability for the numerous claims brought by victims of Tabor.

BREACH OF CONTRACT

Under Washington law, the insurance company was required to defend the center, and if necessary, settle cases within policy limits. The company repeatedly refused to take any action, egregiously breaching its contract.

As Cochran prepared for trial in suits against the center on behalf of victims, he reached agreement to represent OELC as well in its dispute with the insurer over its inaction and breach. The insurance company, initially believing it had only $1 million in coverage for the numerous claims, neglected to prepare a robust defense or settle the claims promptly.  After 12 years of battling the insurer, the company agreed to settle the case just weeks before trial in federal court, culminating in the $28.5 million settlement.

A GROUNDBREAKING SETTLEMENT

According to Cochran, the insurance company had the opportunity to resolve all claims for its $1M policy, but it gambled that it could retain some portion of its profits by keeping its risk assessment secret from its client, and artificially low to justify holding its investments close at hand. The insurance company then held out on the defense lawyer it hired, refusing to approve a defense budget and even delaying payment of his legal fees for almost an entire year.  The company’s refusal to act in good faith and provide the coverage it owed to OELC ended it up costing it $28.5 million.

The groundbreaking settlement underscores the critical role of legal representation in holding insurance companies accountable. Cochran and the PCVA team demonstrated unwavering commitment and tenacity, fighting for justice for the victims for over a decade and ensuring that the insurance company faced the repercussions of its actions. The settlement not only provides substantial compensation to the affected families but also serves as a stark warning to other insurance companies about the costs of failing to honor their commitments.

A CALL TO ACTION

The case highlights the devastating effects of insurers acting in bad faith on victims and policyholders. It underscores a far too prevalent business practice by insurance companies to pad their pockets by delaying or denying legitimate claims it owes policy holders, all the while accumulating undeserved earning on the money it fails to pay as contractually obligated. It is imperative for individuals and organizations to be vigilant and proactive when dealing with insurance companies, ensuring that they receive the coverage and support they are entitled to. This settlement is a victory not just for the victims, Olympia Early Learning Center and its affected families, but also for all policyholders who rely on insurance for protection and peace of mind.

PCVA remains committed to advocating for the rights of victims and holding corporations accountable. This case exemplifies the firm’s dedication to achieving justice, regardless of the challenges or the duration of the legal battle. As Cochran stated, the firm takes such fights personally and is prepared to pursue justice relentlessly, ensuring that insurance companies and other entities are held to account for their obligations – one policy at a time.