Risk mgt violation costs ASU big

[john1082]

A risk management violation involving alcohol, an underage girl, and a driunk driver may cost the brothers at ASU big time.

Appears that there was a rush function a couple of years ago. Girl has three beers and departs. She is crossing a street and is struck by a drunk driver. Her intoxication became an issue at the trial against the drunk and then the brothers at ASU who provided beer to the underage girl were brought in. Lloyds says no coverage for a risk management violation.

I have the article from Doug case detailing the incident if you're interested. Please drop me a note at JGezelius@msn.com and I'll forward it along to you.

We gotta be careful out there!!!

ZAX

John G

[LXAAlum]

It's also posted/link in the Risk Management/hazing forum.

[boz130]

As a semi-newbie, I'm not aware of where the hazing info appears. Anybody got an address?

ZAX,
Bill Foltz
BO 130
Illinois State '77

[john1082]

This Link may work

[Tom Earp]

This is the sue happy world we live in

3 beers and this young lady jaywalks and gets hit by a lawyer who had been drinking!

I wonder if they did a blood alchol test on her? Did she just try to short cut to get to a dorm or a Soro. House?

Granted she was under 21 the legal age forced on the states by the Federal Govy. or get state road funds cut off!

To hold the feet of the Chapter to the fire is ridiculous and
ludicrious but the nature of the beast into todays Risk Management World! These young men did nothhing that is nothappening all over the Greek World!

But we as Greeks take the brunt of it because we are Greeks!

[john1082]

Arizona Republic
July 18, 2003

No insurance coverage for ASU frat that served alcohol before fatal hit-run

by Jessica Wanke

An Arizona State University fraternity lacks the support of its insurance
company in a $1 million settlement it was ordered to pay for its role in
the 2001 death of an incoming freshman.

On June 12, a Maricopa Superior Court entered a judgment to be paid by
Lloyds of London, the insurer of the Lambda Chi Alpha fraternity, as part
of a civil suit filed by the deceased student's family. The insurance
company is saying the fraternity's policy does not cover such an incident.

Only days before the fall 2001 semester was to begin, Jessica Woodin, then
18, left a party at the fraternity's house on "old row" after drinking
three beers, according to court testimony. And at about 2 a.m., Woodin
walked into Apache Boulevard against the McAllister Avenue crosswalk light
where she was hit and killed by drunk driver Mark Torre, a Phoenix lawyer.

During the trial in 2002, the subject of Woodin's intoxication came up as a
factor in her death.

After Torre was convicted and sentenced to 9½-years in prison, the family
began to look at the other parties involved in the incidents of Aug. 18,
2001. The Woodins identified the fraternity as one of the parties who were
partially responsible for their daughter's death.

In the settlement the prosecutors agreed to not collect the money from the
fraternity chapter or its members and now they are unable to collect the
money from the insurance company.

Executive vice president of Lambda Chi Alpha national, Tim Helmbock, said
the organization pays for a policy that protects its students against
injuries or accidents, but because the members at ASU violated the law by
serving alcohol to minors, they cannot be covered.

Mark Meltzer, the Woodin family's attorney, said that he has been dealing
with the fraternity's ASU chapter, their national headquarters and the
insurance company separately, but that the interests of all three are
intertwined.

The family's civil suit has several other defendants, including the law
firm Torre worked for and the two Scottsdale bars, Axis Cigar Bar and Z
Tejas Grill, where he and a fellow lawyer drank prior to hitting Woodin.
Meltzer would not say whether there were any other settlements.


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This is the text of the Arizona Republic article. I received it from Doug Case and the Fraternal News list:

[chopper816]

isnt the whole point of having lloyds to cover us is in the event of a risk management violation? ive always been confused with our insurer, i thought as long as we paid the bill, we were covered.

[john1082]

Paying the bill isn't enough. Insurance is a contract. As part or our agreement with the carrier we agree to play by the risk management rules agreed upon by the fraternity and the insurer. Keeping up our part of the bargain means that we have to keep our promises, not just pay the tab when we get a bill.

If we break our promise with the carrier then the carrier can deny coverage. If we play by the rules and something bad happens then we are covered. If we don't play by the rules and something happens then we can be denied coverage.

I don't want the example to sound childish at all, rather, these are some basic concepts of insurance law.

An exaple might help. If you buy a house you will probably have some sort of general peril type of policy, commonly called a "Homeowner's" policy. One provision might be that it applies to non-commercial activity in your home; things like slip and falls for visitors, dog bites, that sort of thing.

If you engage in commercial activity in your home, such as seeing clients there, then the house becomes more like a commercial establishment.

If somebody slips and falls in a business the costs can be much higher. The carrier quoted you a rate for a home, not a business. If you tried to get coverage on the cheap by calling your business establishment your home then you might have a coverage problem.

How about the recreational breeding of pit bulls? Silly example, but if you bred pit bulls at home you might have a higher risk of dog bite injuries than if you had a single golden retriever. If you told the insurance carrier that you had a golden retriever and in actuality you had a backyard full of pit bulls then the risk would change and it could be said that you misrepresented the facts in order to minimize the risk (cost) to you.

Bottom line is that risk management is a risk reduction program designed to cut the liklihood of injury. That results in lower premiums. As it is the risk associated with insuring a college fraternity lies somewhere between insuring the Love Canal and Three Mile Island*. We don't need higher premiums.

John Gezelius
California, '78

* the Love Canal was a toxic waste problem on the east cost in the seventies. An entire neighborhood had to be purchased and torn down as part of the remediation effort. Three Mile Island is a nuclear power plant that had an 'incident'. The risk of ensuring a fraternity therefore lies somewhere between toxic waste dumps and nuclear power plants!

[LXAAlum]

If Lloyd's isn't going to cover, then I would venture to guess that we will see ASU join NIU in having their charter revoked and the chapter closed.

They'll probably have to sell the property (if they do own it) to cover as much of the settlement as possible.

You would think that LXA would learn from Rutgers, Iowa State, and now this. Something tells me we'll see proposals to have LXA go dry at the next GA next August.

[Nhfulmer]

The actual settlement on this was $150,000 (or maybe it was $250,000); the negotiations began at $18,000. My husband discussed this case with the Lloyds' representative at his own fraternity's Executive Board meeting last month. The settlement was not the original $1,000,000.

[john1082]

I believe that we will see additional pressure to go totally dry at all events: Undergraduate, alumni, EVERYTHING. The undergrads will see all sorts of sanctions and the alumni will be pushed to be role models. What is worrisome is that anyone who opposes the proposal will be seen as obstructionist, non-visionary, old-fashioned - choose your own derogatory term.

Events such as this drive home the point that frat boys can't be trusted. Unfortunately, even though this event was an isolated event, that won't placate those who wish to further restrict the Greek community or even shut it down.

[chopper816]

going totally dry is a bad idea. phi delta theta tried it and some friends i have in a phi delt chapter say that nationally, rush numbers fell, most chapters broke the rules anyway, and social events really hurt. and during rush, you dont go out and say that you drink, its pretty much just assumed when rushing a fraternity, however having to come out and say "we're dry" will turn away so many potential rushees. I dont want to hear the argument about how we have the best brotherhood and ritual, b/c i know that for a fact, but new guys wont know unless they join, and if being dry turns them away, then theyll never know. If something is proposed at GA, it wont pass, passing such a motion would be quite a blow to the national fraternity as well as chapters, and it could be a knockout blow too. to sum it up, going dry is a dumb idea!!!!!

[john1082]

I would preface my comments by saying that I'm not trying to pick a fight with anyone, rather, these comments are based upon 25 years or so of observing how the legislation is proposed at General Assembly.

Further restrictions on alcohol may well be proposed, and they will be moved forward, quickly. Debate may be spirited, but the Resolution will ultimately pass. Resolutions are seldom proposed without a firm lock on the requisite number of votes needed to pass them. Not supporting the concept, but that's how it works.

Should it appear that draconian measures will be a non-starter, a 'feel good' resolution will be proposed to suggest to those who pushed the initial measure that we really tried to do something.

Cynical? Perhaps. There are multiple dynamics involved. It may be too much of my Berkeley Poli Sci nature coming out in this analysis, tempered by several years in the intel business at the Pentagon.

John G

[chopper816]

well, there was a motion proposed at the last ga about dropping the name fraternity to brotherhood, and that failed, so stuff is proposed without the needed number of votes to pass, no one at regionals liked that one. i dont think the make up of the active chapters now would pass any motion about going dry. all the brothers from other chapters get sick of talk about us going dry. im not trying to glorify alcohol, but im facing reality, its apart of the college experience, the fraternal experience, and people will go down in a blaze of glory to keep this fraternity non-dry. if any of you have been at a conclave or any conference, it shows that guys like their beer. also, ive been told by alumni that measures like this have been proposed before, and failed, itll do so now. we either lose a few chapters by them being stupid, or lose even more chapters by going dry, thats the choice.

im not trying to to get into some big argument about alcohol, im just strongly opposed to going dry, and i know itll do more harm then good.

[Nhfulmer]

The reason for going dry is very simple - insurance companies will not cover fraternities who have had big payouts due to law suits unless they have a "dry" policy in place. Without insurance, there can be no fraternity. It is working with some groups. Yes, there are many who disagree and some who refuse to abide by the policy; however, if they do not abide by the policy and there is an incident, the insurance does not cover them. It is just that simple! Would you rather change or see your fraternity go under because of one law suit which is all it would take if the insurance coverage is not there.