David Pettinato Published in Trial Magazine Regarding the "Loss Payment Clause"
David Pettinato has been having a tremendous professional year. He was elected to national office of the American Association for Justice as an officer of the Insurance Section. He also was re-elected as the Co-Chair of the Bad Faith Litigation Group. In what must be a record “partial” settlement for a sinkhole loss, David received an $8.1 million dollar recovery for a client. The bulk of the amount claimed in that case is still at issue. And, he was recently published in Trial Magazine.
His article concerning the Loss Payment Clause is about a fairly standard provision found in all commercial and residential insurance policies. It usually provides:
Loss Payment. We will adjust all losses with you. . . . Loss will be payable:
a. 20 days after we receive your proof of loss and reach agreement with you; or
b. 60 days after we receive your proof of loss and
(1) there is an entry of a final judgment; or
(2) there is a filing of an appraisal award with us.
David argues that the clause should be interpreted to mandate payment of the undisputed or agreed to amounts of the loss:
The loss payment provision must be interpreted to mean that once an insured has submitted a properly executed sworn proof of loss (POL) statement, the insurer has a certain number of days to tender the undisputed amount of benefits. Insurers argue that the provision implies an obligation to pay benefits only after there is an "agreement" between it and the policyholder.
Taking this argument to its extreme, the insurer would never be obligated to pay benefits as long as it disagreed with the POL's claimed amount, in part or whole. Under such a contract, the insurer could collect premiums from the policyholder but never have a contractual obligation to perform any duties, unless it expressly agreed to them.
A more reasonable interpretation of the loss payment provision is that on submission of the POL, if the claimed amount exceeds the insurer's damage estimate, the insurer is obligated to tender undisputed benefits in agreement with the policyholder, leaving the balance as disputed.
Certainly, insurance companies acting in good faith should pay all amounts undisputed as promptly as possible and most do. I cannot imagine an equitable reason which would allow a debtor to hold onto monies agreed to as owed. The inequitable reason to do so is for leverage of the disputed amount. Replacement cost policies certainly contemplate prompt payment of undisputed amounts because most have time requirements for actual replacement. Some states now have penalties for insurers that do not promptly pay agreed amounts of loss.
The Merlin Law Group is very proud of what David has accomplished and for his continued development as a policyholder leader. Here is the article in full.
Chip:
That's great that Mr. Pettinato is doing so well these days!
No doubt we need more "leaders" like him!
The document I pulled up was double-spaced and only two pages long.
Is this the "article" you're referring to that was published in Trial magazine?
SHIRLEY HEFLIN
Shirley,
The article is two pages and to the point. We put it in Word format for our readers of the Blog.
Thanks for the nice comments for David. He is one of the hardest working attorneys I know. Indeed, I know of no other attorney working so hard for his clients.
He has also been working intensely on developing his professional image and becoming the best attorney he can. It is a pleasure to see rewards for those, like him, that are trying so hard.
As you are aware, I "push" on attorneys working with me to be the best they can. David has worked diligently to get to this point, and he will get even better. Results do not lie.
Chip, that's a fact: RESULTS DO NOT LIE.
I meant every word I said about Dave. I've been "exposed" to many, many attorneys and there aren't many that I'd walk into a courtroom with - however, I'd walk into one proudly (and confidently) with Dave by my side. I KNOW he knows how to "GO FOR THE GUSTO!"
With the right motivation, most can "BE ALL THAT WE CAN BE." For most, that motivation is money; for others, it goes deeper than that. It's finding the right balance between the two that makes a person wise, likeable, competent and a host of other adjectives! :)
SHIRLEY HEFLIN