On a bright August Sunday in 2015, Brian and Denise Neighbor, and their three children, were invited for swimming and a barbecue. It was held at the home of Matthew and Tyra Friend, who have three children of their own.
The Friends recently added an in-ground pool, and most weekends the two families would spend one or both weekend days at the Friend home.
But on this August Sunday, something went wrong. Everyone knew it when Matthew Friend bolted into his house, screaming for someone to call 911.
The day started innocuously enough.
There were adults and kids on the pool deck laughing, swimming and sunbathing. The music played and the chips flowed. Later on, the moms went inside to prepare dinner. The older kids, too, went inside. This left the two dads, Brian and Matthew, and 2½-year-old John Neighbor on the deck.
Brian received a text from his office and asked Matthew if he would watch John for just a few minutes. Matthew agreed. Brian proceeded inside to grab his computer to respond to the text.
Matthew burst into the house. He was clearly panicked.
He apologized profusely, over and over again, spitting out words that didn’t make sense…he had only looked away for a minute…he was so sorry…they needed to call for help…
Little John Neighbor had climbed up the slide ladder, fallen and landed on his head. It was bad. He needed emergency attention, and fast.
Brian and Denise sprinted out to the pool where John lay. His little body was crumpled beside the slide, twisted, unresponsive and unconscious. They could not wake him up.
He was still breathing. Immediately, Denise became hysterical, crying and screaming at Brian. Brian, too, was distraught. He defended himself while looking to Matthew for an explanation.
Mostly, though, Brian was paralyzed by the fear of what was happening to his boy.
After the longest 15 minutes of Brian and Denise’s lives, EMS arrived and John was airlifted to the best medical center in the area. He regained consciousness but remained scarily incoherent.
Consciousness was a good sign, the paramedics said. Yet, the only words Brian could hear—the words that repetitively pounded in his ears—were “traumatic brain injury”.
What was going to happen to their baby?
Was there damage to John’s brain cells?
Did his little brain bang against his skull upon impact?
Was there bleeding or swelling around his brain?
The doctors could not tell the Neighbors the extent of the damage. It would be a waiting game.
While the Neighbors were at the hospital caring for little John, the Friends stayed at home with the rest of the kids and waited anxiously for news. Tyra questioned Matthew about what had happened and Matthew, in a mixed state of shock and denial had no answers.
Hours became days and then weeks in the intensive care unit.
After multiple tests, scans and MRIs—and a lot of tears—John regained coherency. Because he was so young, the doctors were unable to say whether there would be any long-term damage.
The Neighbors were told that John might suffer from mental problems, including cognitive impairment (memory, learning, reasoning and processing functions) and/or executive functioning problems (problem-solving and decision-making tasks), and that they had to be on the lookout for potential communication problems (difficulties with language, speaking, reading and writing), social problems, behavioral problems, sensory problems and/or emotional changes.
There were also risks of epilepsy and degenerative brain diseases.
What followed not only ended the friendship. It devastated the Friends financially.
The Neighbors met with attorneys, who advised them that it was their responsibility, as John’s parents, to sue the Friends.
Presumably, the Friends had insurance to cover the liability. The “accident” happened at the Friends home at a time when Matthew Friend committed to watching John. The hospital expenses were mounting and the long term care John would require was undefined.
Denise, suffering miserably while her son was recovering and missing her best friend, did not want to bring suit. She was mad at Brian and thought he was the negligent party, having left his son to work (on a Sunday!).
In the end, Brian convinced her to follow the lawyers’ advice. The Neighbors sued their Friends.
The Neighbors did not know the Friend’s financial status and they certainly did not know what the Friends’ homeowner’s insurance policy covered. (Frankly, the Friends didn’t know what coverage they had either.) The Friends had just purchased the policy suggested by the insurance company when they bought their home twelve years ago.
While the Friends did have liability insurance which they thought would protect them, they soon learned that the policy limit was $200,000. The Neighbors were suing for $2,000,000—ten times their policy limit.
The Neighbors did not have an umbrella policy, which could have been purchased for as little as a couple of hundred dollars per year and would have supplemented the liability policy.
In the virtual blink of an eye, a fun play day ruined the lives of two families. Based on John’s medical treatment and care, as well as the mounting legal fees, the Neighbors were forced first to deplete their savings accounts, then sell their home and many of their assets.
Not surprisingly, the Friends’ marriage broke up.
Unable to pay the for all of the costs and legal fees, they each filed for personal bankruptcy protection with the hope of achieving a “fresh start.”
While a bankruptcy does allow the filing party a “discharge” from many outstanding debts, including a judgment obtained against him or her by virtue of litigation, to get that discharge there is a large quid pro quo – meaning you have to give up a lot (in the way of assets) to get that discharge.
Please read your insurance policies, know what coverage you have and make sure at the very least that you have enough coverage to protect your assets and your future income. Building wealth is not only about saving, it is also about properly insuring.
You have to learn the rules of the game. And then you have to play better than anyone else.
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