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Wednesday, October 26, 2005 - Page updated at 12:00 AM

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Victim's long fight is over

Seattle Times staff reporter

A Seattle woman who contended Farmers Insurance abandoned her after a traffic accident 11 years ago has collected a $760,000 settlement from the carrier, ending her almost single-handed fight against the insurance company.

The recent payment came more than a year after Mary Mulcahy, who has no formal legal training, successfully argued her own case before the state Supreme Court. The high court unanimously overturned two lower-court rulings against her, paving the way for the settlement Mulcahy, 62, received with the help of a Seattle law firm.

As part of the settlement agreement, Farmers admitted no wrongdoing in its handling of Mulcahy's claim.

"We are pleased that this settlement has been mutually agreed to by both parties," said Farmers spokeswoman Mary Flynn, who declined to comment further on the case.

It's a bittersweet victory for Mulcahy, an Irish national who holds a U.S. green card. During her fight against the insurance company, Mulcahy, who could not work as a result of her injuries, was unable to support herself, lost her home and was forced to live in her car and in transitional housing.

"I'm glad it's over," she said. "I don't know I'd say justice was really done or not."

If Farmers had paid her the $150,000 she contends it was legally obliged to pay right after she suffered a broken sternum and other injuries in the May 1994 accident in Vancouver, B.C., she could have gone back to work, and obtained medical treatment for fibromyalgia, a musculoskeletal disorder she says was caused by the accident. Throughout the case, it was uncontested that the collision was entirely the fault of the other driver. But the case turned on Farmers' responsibility to Mulcahy.

More than five years after the collision, Mulcahy entered into mediation with the other driver's insurance company. She agreed to settle for a total of $375,000 Canadian, but the payment was reduced by $150,000 on the theory that Farmers was responsible for that amount under an agreement it had signed in 1986.

Under that agreement, Farmers' U.S. policyholders like Mulcahy were entitled to the same minimum coverage British Columbia residents would have received through Canadian insurance carriers if they had been involved in an accident like hers.

Mulcahy's policy entitled her to coverage while driving in Canada. But after the accident Farmers balked at paying anything beyond $10,000 in personal-injury protection.

When Mulcahy asked the state insurance commissioner to intervene, the commissioner's office told her it lacked the authority to compel Farmers to pay her more. A spokeswoman for the commission said Tuesday the office has since learned its position was wrong and it could have intervened in her behalf.

Attorneys were generally unwilling to take on Mulcahy's case, she recounted, because she lacked money to pay a retainer and they found the legal issues too convoluted or complex to accept the case on a contingency basis. So Mulcahy embarked on a legal odyssey in two countries, filing lawsuits in Canada and the U.S.

When she started, "I did not even know what a motion was," said Mulcahy. She visited law libraries in the U.S. and Canada to educate herself. In the depths of her struggle, with little money, she sometimes spent the night in her car outside a Seattle Kinko's, where she went to make copies. She would ask employees not to call the police to report she was sleeping in their parking lot.

Of the settlement amount, $150,000 was tied to benefits Farmers should have paid under the agreement it signed, according to Mulcahy and Seattle attorney Mike Withey, who helped her obtain the settlement.

The balance, $610,000, was to settle Mulcahy's "bad faith" claims, she said. Examples included Farmer's failure to inform Mulcahy that she was legally entitled to the $150,000 in benefits, and then "manipulating the system so they didn't have to pay for 11 years," Withey said.

Withey's firm worked on a contingency basis and received $160,000 of the total settlement amount, Mulcahy said. Withey described her as a woman of "steely determination" who at every step of the way displayed "a superior knowledge of all the facts and much of the law."

Withey and Mulcahy said they believe Farmers was finally driven to settle in late August after a King County Superior Court judge, over the company's objections, ordered Farmers to disclose what advice it had received from lawyers in Canada to justify rejecting her bid for additional benefits.

Withey had contended that Farmers could not use attorney-client privilege to shield the advice because the company had taken inconsistent positions. On the one hand, during a deposition, a company spokesman said Farmers had relied on its lawyers; but in court pleadings, it said otherwise, causing Withey to suspect that the advice Farmers received was likely "much more guarded" or even favorable to Mulcahy.

Mulcahy said she has about $450,000 left after paying off credit cards and other debt she had accumulated before the settlement. She plans to continue living in the same housing complex in Ballard, but as of this month quit receiving help from the government for her rent.

It's not clear if Mulcahy will be able to work again, so it's likely that the settlement will have to last the rest of her life. She used to be employed as a claims administrator for an international freight forwarding company.

Of her fibromyalgia, Mulcahy said, "Every day you have pain, but you live with it." Unrelated to the accident and complicating her health, she has developed multiple sclerosis.

Mulcahy remains bitter toward Farmers, which recently came under fire for denying to pay Ethel Adams, a 60-year-old Everett woman who was injured in a traffic accident in March that was not her fault. After mounting public outcry, including condemnation from state Insurance Commissioner Mike Kreidler, Farmers relented and agreed to pay Adams for her claim.

"They shouldn't even have a license to sell insurance," Mulcahy said. "I don't know how they sleep at night."

Peter Lewis: 206-464-2217 or plewis@seattletimes.com

Copyright © 2005 The Seattle Times Company

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