Lawyers say the company abuses that discretion, forcing people to either forgo what they are rightfully owed or pursue costly litigation.
Maria Ramos De Mendoza discovered just how hard it can be to take on Tutunjian after she was hit by a Boston Cab taxi in 2008 while crossing a street in Newton. The Providence woman allegedly suffered head, neck, and back injuries.
Police blamed the cabbie, noting that De Mendoza was in a marked crosswalk with a stop sign. Still, Boston Cab refused to pay any of her medical bills, according to her attorney, Matthew Durfee of Smithfield, R.I., although state law requires even self-insured companies to cover at least $2,000, regardless of who is at fault.
As her case crawled through the court system, De Mendoza’s medical bills climbed to $10,000, and soon collection agencies were chasing her, Durfee said. Still, she had to wait more than three years before the cab company made an offer. Finally, on the eve of trial in November, the company offered a confidential settlement that De Mendoza accepted even though her attorney says she deserved far more.
State insurance laws have sharp teeth – an insurance company found to have acted in bad faith could face triple damages. But Durfee said Tutunjian’s staff told him Boston Cab isn’t an insurance company, and doesn’t feel bound by those rules.
“They don’t have the triple damages hanging over their heads so they can thumb their nose at you,” said Durfee. “They can say, ‘We are not going to pay it, so you have to hire an attorney and wait three years.’ ”
After an inquiry by the Globe, state Treasurer Steven Grossman said he would ask the Legislature to end the self-insurance program because it benefits only the few prosperous entities that can afford to make $10,000 deposits. He added that $20,000 in coverage, whether paid through a traditional policy or self-insurance, was “nowhere near adequate’’ to cover people’s injuries.
Despite repeated requests, Tutunjian declined to be interviewed beyond the 20 minutes he, two nephews, and another manager spent with a reporter who approached them in the garage. In a series of written statements, he invoked a class-action lawsuit by cabdrivers who allege that fleet owners and the city have improperly denied them benefits and fair wages.
“Due to pending litigation, I have been advised by my attorneys not to discuss any information that could potentially be addressed in the case,’’ he said.
Still, he said in one of the statements that the way he divides up his assets among multiple companies is legal and “no different than the make-up of other medallion owners.” The insurance company he hires to handle claims in-house does so “in a legal and ethical manner,” he said. And he noted that several people who filed lawsuits against his companies ended up losing at trial after, he said, they rejected “very reasonable settlement offers.”
Legal loophole on insurance
The full story of Elizabeth Rideout’s ordeal opens a window onto the cold and Kafkaesque world of personal injury claims against Boston Cab.
It began just before midnight on March 19, 2003, at the curb of Terminal C. Logan Airport was on high alert because of the US invasion of Iraq hours earlier.
Rideout, a retired bookkeeper from Quincy, was coming home from visiting friends in Florida after the recent death of her husband. Yuri Wiseman, a 28-year-old businessman, was returning with his wife from Las Vegas to their home in Brookline. Rideout and Wiseman were waiting for cabs. They could not have imagined what would come next.
Preparing to help a customer waiting at the cab stand, driver Mohamed Farah stepped out of the taxi he was driving but failed to put the car in park. When the Crown Victoria rolled forward, he leaped back in and mistakenly stepped on the gas instead of the brake. The cab jumped the curb, striking Wiseman and Rideout. Wiseman was pinned under the front of the two-ton car. He was pronounced dead at the scene.
Rideout was trapped under the rear axle. A chaplain administered last rites before she was taken to Massachusetts General Hospital.
Farah collapsed to the ground, crying, “It’s me, I’m dead, it’s my fault!’’ according to a state trooper.
Marion Rideout was alerted to the news by a phone call to her fiance’s home in the Seattle area, and soon returned to Boston. As her mother was hospitalized for eight months and underwent seven operations, the younger Rideout found herself trying to unravel the Gordian knot that is Boston’s taxi industry.
She soon learned about the legal loophole that allows most cabs in the state, including Tutunjian’s, to be inadequately insured. Only 15 percent of ordinary passenger cars in Massachusetts carry the minimum legal insurance, which requires $20,000 for one victim and a total of $40,000 if two or more people are hurt or killed.Continued...