017: A Good Fence Makes a Good Neighbor

Stella Case No. 017, Originally Published: 13 November 2002

Michael and Laura Schek have some eye-catching decorations in the yard of their Patterson, N.Y., home. Pink flamingos abound — 58 of them. One group of the gaudy plastic birds sits around a “picnic table” made from old truck tires “drinking” from pink plastic cups glued to the table.

A fake Christmas tree, wrapped in a white sheet, sits by the driveway. Then there’s the toilet on a stack of wooden pallets; on the toilet sits a gargoyle. And it’s all capped by a sign that reads, “Our dog can run to this fence in 2.8 seconds, can you?”

It’s too much for neighbor Tyler Murello, who owns a 41-acre lot next door. He has to get to his property via the Scheks’ driveway, which is allowed by a legal easement. But that means he has to drive by the Scheks’ on the way to his lot, where he is building a house. The four bedroom, 4,500 square foot “spectacular mountaintop estate” he’s building also has a separate 1,100 square foot caretaker’s cottage. The property is listed for sale for $1.35 million.

Murello says the Scheks are decorating their yard this way on purpose in an attempt to “repulse” anyone looking to buy the house. The Scheks had previously sued Murello in an attempt to block the construction, but the lawsuit failed and building went ahead. About that time is when the yard decorations popped up, which the Scheks say is simply an expression of their freedom of expression.

“We find it somewhat unusual that this sudden artistic inspiration should occur in a matter of days after the resolution of the previous litigation,” says Robert Lusardi, Murello’s attorney.

The Scheks’ lawyer Mitchell Lieberman says their decorations are meant to “deter trespassing construction workers” and slow down the construction vehicles going up and down the driveway. “When pricing a fence, it was in the tens of thousands of dollars,” Lieberman says. “The upper crust of Putnam society may not appreciate these lawn ornaments, [but] my clients don’t have a problem with them,” he said. “In the meantime, their First Amendment rights are being trashed.”

So, this is a Freedom of Speech issue? “Mr. Murello’s tastes and my clients’ tastes are obviously different,” Lieberman says. “We’re not pink flamingo specialists but we do a lot of First Amendment work.”

Pfui, Murello says. He has sued the Scheks, asking for $8 million.

Dennis Plante, president of Union Products, Inc. in Leominster, Mass. (“The Home of the Original World Famous Pink Lawn Flamingo”), says this is the first time he’s heard of someone suing over his lawn ornaments. The company has been selling the plastic birds since 1957. The company sells 600,000 of the things per year. But that didn’t impress New York Supreme Court Justice S. Barrett Hickman, who granted Murello a temporary restraining order demanding the removal of the Scheks’ yard art. A hearing has been scheduled to determine the next step.

There has to be a Stella Award in here somewhere, but is it due to Murello, for suing his neighbor for $8 million because the Scheks’ 58 pink plastic flamingos and other assorted “art” are making million-dollar homes look like they’ve been placed in a trailer park? Or is it due to the Scheks, for trying to stop a man from building a house on his own property, first using the courts and, when that failed, with pink guerilla tactics? Or maybe it’s both, in recognition of the sort of argument one would expect from a pair of squabbling children?

It ain’t easy being a juror in the Court of Public Opinion.

When neighbors don’t get along, they could sit down and talk out their differences. But that ignores the New American Dream of “something for nothing,” so let’s step into the courtroom and not only vex our next-door pest, but rake in a few million in the process! While it sounds pretty stupid, perhaps it’s better than them dueling with pistols at the bottom of the driveway.

Sources

• “Plastic Bird Art Inspires $8 Million Suit,” White Plains Journal News, 9 November 2002

Case Status

I was not able to find a conclusion for this case.

My 2020 Thoughts on the Case

We needed Judge Alex Kozinski on this case (“The parties are advised to chill,” he told the litigants in the Barbie Girl case. The Scheks’ case at least appears more frivolous: the guy wants to sell his house? Let him! Then you’ll be rid of him. Forcing him to be your neighbor just seems stupid.

Letters

Last week in this space, we talked about how insurance companies “encourage frivolous claims and suits by rolling over and tossing tens of thousands of dollars to people with meritless claims just to make them go away.” The readers had plenty to say about the idea.

John in California: “Many insurance companies deserve a worse reputation than lawyers! One of my mother’s friends was visiting our house and went to greet one of our dogs. The lady bent down to kiss it on the head (!) and the dog snapped at her and bit her lip. Mom rushed her to the hospital for treatment. Then, as it was our dog and our responsibility, [my mother] contacted our insurance company and told them that our dog bit someone and to expect a claim. The claim was filed and nothing happened. Later, the friend had to have reconstructive surgery to remove a scar — and sent in the bill for her deductible and her medical expenses. She heard nothing. After several months the friend got fed up with the insurance company stiffing her for nearly $1000 (she wasn’t asking for pain and suffering, just her out of pocket expenses), she contacted a mutual friend, a lawyer, who wrote a letter to the insurance company on his office stationery inquiring why they have not even acknowledged her claim. Within a week the company offered her $15,000! When my mother heard about this she was furious; she called the insurance company and asked them what they were doing shelling out that kind of money when the claim was for $1000?! Their response: for a dog bite to the face, they’d go up to $50,000 just to avoid going to court. So my mother switched insurance companies.”

Good for your mom.

Bill, an attorney in California: “For the first 8 years of my career I worked as an insurance defense lawyer. Having tried quite a few cases it was my personal experience (obviously anecdotal) that juries made more mistakes for my clients than for plaintiffs. Most of the time that I felt my jury had erred, it was in my favor and a probably meritorious claim was either defeated or resulted in a too low award. Insurers also settle based on a number of factors other than the merits or demerits of defeating questionable claims. All claims have a reserve set. The amount of the reserve affects reported profits which affects stock price which affects options which affects the amount of money the company or its executives can give to a particular politician or political party. Companies also periodically decide to ‘clear the books’ by settling cases close to the end of the year. [But] some years, on cases of clear liability, our marching orders were to litigate on a ‘scorched earth’ basis. That is, file every motion, conduct all possible discovery, wear out the claimant, even if the claim was one of clear cut liability.”

When people see insurance companies pay out when they don’t need to, and don’t pay out when they do, no wonder they start hating them!

J.D., a claim supervisor for an insurance company in Indiana: “For the most part, I agree with your analysis in regards to insurance companies making a business decision for nuisance value settlements. In my time handling claims, I did my best to not settle those type of claims, as I firmly believe that placing a nuisance value on a claim lacking merit only serves to encourage more of those claims in the future. Having said that, in jurisdiction after jurisdiction, it is becoming increasingly more easy for policyholders to bring bad-faith actions against their insurer for failure to settle a claim, resulting in them going to trial, and potentially becoming exposed to a ‘Stella’ jury.

I will give you a good hypothetical situation, that happens routinely around the country on a daily basis. A claims adjuster gets a an auto claim where there was minimal impact, resulting in no damage to either vehicle — let’s say the impact was not even significant enough to knock over the cup of coffee the claimant had in their lap. Though the policyholder was clearly at fault, there are essentially no damages. The claimant retains counsel, and is referred, amazingly enough, to a local chiropractor who begins a course of treatment for a cervical strain/sprain. After about three months of every other day treatment, the claimant ‘recovers’ to a point where they wish to pursue settlement with the insurance company.

In many cases, the first instance that the insurance company even knows that there is an alleged injury is when the plaintiff attorney submits their ‘demand package’ describing the parade of horribles that their client has been forced to endure. At this point, the insurance company has to make a decision. It is likely that the plaintiff attorney will submit a demand for 5-10 times the ‘specials’ (medical bills, lost wages, etc.), expecting that [the insurer] will settle for 2-3 times the specials. Now if they are strong in their convictions, the adjuster will deny their personal/bodily injury claim, due to the fact that there was not nearly enough of an impact to have been the cause of the alleged injury. To take this to its natural conclusion, the plaintiff attorney then proceeds to file suit. Eventually, after spending a good amount of money defending their policyholder, the case goes to the jury. If the insurance company and the policyholder are unfortunate, they wind up with a ‘Stella’ jury who awards the plaintiff $250,000 for their medical bills, lost wages, pain, suffering, attorneys’ costs, etc. Now, the policy in force has bodily injury policy limits of $50,000 per person, and $100,000 per accident.

So, in this hypothetical scenario, due to a principled and correct decision by the claims adjuster, the policyholder can be personally exposed for the judgement in excess of his policy limits, giving rise to the policyholder’s bad faith action against the insurer for not properly protecting the interests of the policyholder. After the bad faith claim works its way through the courts, let’s say the policyholder gets a judgement for $200,000 in compensatory damages and $250,000 in punitive damages. The net result of the insurer’s willingness to defend a meritless claim is $500,000 in payments plus expenses. As I said, in theory I wholeheartedly agree with your position in regards to not placing a nuisance value on these types of claims. But, in reality, it is not nearly as simple a concept as it was portrayed in your column.”

As I’ve said all along, there is no easy solution to all of this. The answer won’t be all at the feet of the insurance companies, or the courts, or the lawyers, or the plaintiffs, who often seem so very willing to blame everyone but themselves for their own failings. But it is time to address all of these aspects.

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