Property Insurance Coverage Law Blog : Florida Insurance Lawyer & Attorney : Merlin Law Group Law Firm : Tampa, Houston, Coral Gables, Gulfport

The Insurance Section plans to have a panel including Amy Bach, with United Policyholders, Joe Vaccaro and Mark Knutson, to assist AAJ members with questions or issues on their cases. The Insurance Law Section will also have a business/workshop meeting on February 12, from 3:00-4:00

I hope to see you there. Merlin Law Group will be posting more updates as the Convention approaches.

Space is limited so remember to register early. For more information or to register, please visit www.justicewinterconvention.org.

For details on joining AAJ, call 800-424-2727, ext. 8611, or join online at www.justice.org.

David Pettinato
Chair of the Insurance Law Section

Mr. Grose received his Juris Doctorate from Florida State University College of Law and began his legal career as an Assistant State Attorney in Hillsborough County State Attorney’s Office in Tampa. After a few years as a general civil litigator, Mr. Grose turned his career into one of representing the policyholder throughout Florida and in various other states across the U.S. His last position before joining Merlin Law Group was with Childress Duffy Goldblatt, Ltd.

Along with William F. “Chip” Merlin, Jr., Mr. Grose was one of the “Founding Fathers” of FAPIA (Florida Association of Pubic Insurance Adjusters) and has been a presenter at many of the organization’s seminars over the years. He is also a proud member of the American Association for Justice, American Trial Lawyers Association and the Florida Justice Association.

“Merlin Law Group’s strong infrastructure directed by Chip Merlin and Mary Fortson will allow me to put my years of experience at use assisting insureds throughout Florida and around the country,” said Mr. Grose. “It is obvious that our united efforts will better serve policyholders and allow me to practice law at a very high level.”

"I have known Doug Grose for over twenty years. He is a great and passionate attorney---the type of person you want representing you because he cares so much, has the experience and carries the respect with adversaries that produce the results we want for our clients. I am truly humbled Doug has joined us,” said William F. “Chip” Merlin, Jr., president of Merlin Law Group. “Our attorneys are excited about the firm not only adding a colleague with extensive trial courtroom experience, but adding someone who is really enjoyable to practice law with. Doug is a great guy to be around professionally and personally.”

Mr. Merlin continued, “At our recent staff retreat, I commented on how much more Merlin Law Group can offer our clients as we share experiences and winning techniques. We want to make the experience with our law firm the best it can be for our clients and referral sources. People trust their most precious hopes with our firm. Having Doug Grose sharing his experiences, influences, and successes make our entire team better. His desire to switch to our firm is great news for our clients and our team. We have never had this depth of legal and trial experience as we do today."

I have never met the attorney that brought the lawsuit, to the best of my memory, but he is not a member of the American Association for Justice's Bad Faith Litigation Group. Had he been a member, he could have requested information about other instances and procedures Liberty Mutual has regarding its claims handling. Members of this group help their clients by sharing such information with one another so that claims practices of insurance companies are made transparent. Kelly Kubiak of our firm is the current Co-Chair of that organization.

The lawsuit involved an insurance claim for a leaky roof which started from the Hurricanes in 2004. Liberty Mutual was an insurer. The leak was apparently never fixed and the policyholder suffered from living in a mold infested structure. The judge noted these facts and the complaint as follows:

The insured obtained a homeowner's policy from the insurer, which policy provided coverage from 2004 to 2007. In August and September, 2004, hurricanes Charlie and Francis damaged the roof on the insured's home. In order to stop “minor leaking,” the insured employed a repairman to patch the roof. In 2005, under pressure from the homeowner's association, the insured hired someone to pressure clean the roof. However, the cleaner refused to wash the roof after discovering several loose tiles. The plaintiff submitted a claim to the insurer. Because of the insured's inability to locate a roofing contractor, the insured “hired people to remove the old roof and [ ]place [thirty] [pounds] [of] felt and tarp[ ]” on the roof. Excessive rain and wind blew the felt and tarp off of the roof and caused “extensive leaking.” The insured again called the insurer and requested benefits under the policy.

The leak in the roof resulted in “extensive damage” inside the house consisting of black mold in the attic and on the walls. The insurer refused to pay (1) for a repair of the roof because the roof “was not built to code” or (2) for mold remediation because the roof continued to leak. In 2005, the insured located a roofing contractor and agreed to pay $32,500 for a new roof. After the contractor replaced the roof, the insured sued and refused to pay the contractor because “the contractor had not fully replaced damaged wood [ ]or repaired fascia appropriately.” In due course, the insured settled the lawsuit and paid the contractor, because the insured wished to sell his home.

During this time, the insurer on four occasions offered “to settle the claims” of the insured. The insured refused each offer as inadequate. The insured alleges (1) that the insurer “with full[ ] knowledge” of the insured's “infirmities” and disabilities “engaged in a willful and outrageous pattern of delay and withholding of benefits ....;” (2) that, [n]otwithstanding the immediate danger presented by the increasing mold infestation, the [insurer] withheld payments and living expenses which forced [the insured] to live longer in the mold infested house and aggravated mold condition;” and (3) that the insurer's conduct “was outrageous and deliberate and, knowing [of] [the insured's] infirmities, designed to force [the insured] to discount the full value of his claim.” In 2007, due to the mold's effect on the insured's health, the insured vacated the house.

I wonder if the attorney would have changed the complaint if he knew of Liberty Mutual's claims practices as we noted in Liberty Mutual Claims Documents Ordered Produced. Many other attorneys, knowing of these practices, have sued Liberty Mutual with facts of those claims practices which some would suggest would give rise to "outrageous motives" to reduce the amounts paid on claims. Whether those facts would have been enough to convince a judge to let the matter proceed is not known because they were never plead. Instead, the Court ruled the following:

In order to state a claim for intentional infliction of emotional distress, a plaintiff must allege facts showing outrageous conduct by the defendant. See Dependable Life Ins. Co. v. Harris, 510 So. 2d 985, 986 (Fla. 5th DCA 1987). “Whether alleged conduct is outrageous enough to support a claim of intentional infliction of emotional distress is a matter of law, not a question of fact.” Gandy v. Trans World Computer Tech. Grp., 787 So. 2d 116, 119 (Fla. 2nd DCA 2001). A plaintiff fails to show outrageous conduct even if the plaintiff alleges that the defendant's conduct was (1) intentionally tortious or criminal, (2) intended to inflict emotional distress, (3) malicious, or (4) aggravated enough to warrant punitive damages. The defendant's conduct must qualify as “‘so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community.’“ Metro. Life Ins. Co. v. McCarson, 467 So. 2d 277, 278-79 (Fla.1985) (quoting RESTATEMENT (SECOND) OF TORTS § 46 (1965)).

In this action, accepting the insured's factual allegations as true, the insurer's conduct fails to rise to the level of outrageous conduct. The insurer offered four times in three years to settle the insured's claim. Even if the insurer's offers were either inadequate or “designed to force [the insured] to discount the full value of his claim,” the insurer's conduct fails qualify as “outrageous” for the purpose of stating a claim for intentional infliction of emotional distress.

I know that Vivian Persand will follow up with the attorney to provide him the information we have regarding Liberty Mutual. I hope he uses that information and joins the Bad Faith Litigation Group so the policyholder comes out better in the future.

The Court noted the basic facts:

This is the third case to come before this court involving plaintiff Victoria Migaldi (Migaldi)'s homeowner insurance claim for windstorm damage caused by Hurricanes Frances, Jeanne and Wilma. Defendant Safeco Insurance Company of America ("Safeco") did not dispute coverage of the claim, but instead declined to pay the full amount claimed and invoked the policy's mandatory appraisal provision to determine the sum payable for losses that were disputed as to value.
...

On February 9, 2009, the court granted Safeco's renewed motion for summary judgment, concluding that Florida's VPL did not apply to Migaldi's claim because there was no "total constructive loss" of her residence, and that without a VPL override both parties remained bound by the appraisal award. Accordingly, the court entered final declaratory judgment in favor of Safeco in Migaldi I declaring that Safeco's full payment of the appraisers' award satisfied its indemnity obligations toward its insured under the policy...

On February 24, 2009, Migaldi filed a second action, Migaldi v Safeco Insurance Company of America,..."Migaldi II," seeking to hold Safeco liable for breach of contract for failing to pay further sums allegedly due under the policy for the same loss. In her second filed suit, Migaldi acknowledged that these claims were previously submitted to appraisal, but contended that "[t]he appraisal process failed to address all of the damages caused by the hurricane [sic] as they inappropriately applied a $ 10,000 mold cap to the building and personal damages."... On August 11, 2009, this court dismissed Migaldi II, with prejudice, finding the suit barred by the doctrine of res judicata because it involved a scope of coverage issue which was actually litigated and necessary to the judgment entered in Migaldi I....

On January 12, 2010, Migaldi filed the present suit, "Migaldi III," alleging a Florida Statute § 624.155 bad faith claim against Safeco relating to the same insurance claim. Here, Migaldi alleges that Safeco engaged in bad faith in the appraisal process by misrepresenting pertinent facts relating to coverages and facts of the loss at issue, including misrepresentations regarding the applicability of the policy's mold cap, and misrepresentations regarding damages from the first appraisal of the claims, leading to a "mishandling" of plaintiff's second appraisal. Migaldi also charges Safeco with improper delay in the adjustment of her losses through use of multiple independent adjusters, and improper delay in the appraisal process itself. Thus, in part, the current complaint attacks the validity of the appraisers' award on ground of "improper" procurement through bad faith claims handling techniques and tactics on the part of Safeco, and seeks to charge Safeco with liability for the alleged resulting diminution in the appraisers' valuation of her claim under the Florida first party bad faith statute.

This matter is currently before the court on Safeco's motion to dismiss on ground of res judicata. Safeco essentially contends that because Migaldi failed to challenge the appraisers' award or to appeal the judgment which confirmed the award in Migaldi I, her subsequent bad faith suit relating to Safeco's handling of her original windstorm claim is barred under principles of res judicata.

The Court granted Safeco's motion in part, but allowed much of the wrongful claims practice action to continue:

...the court concludes, in the context of the instant appraisal proceedings, that Migaldi may pursue a statutory bad faith claim against Safeco based on alleged unreasonable delay: (1) from the time Migaldi initially submitted her claim to the time Safeco initiated the appraisal proceedings; (2) for the time during the appraisal; and (3) for the time between confirmation of the appraisers' award (i.e. entry of final declaratory judgment in Migaldi I) and the time that Safeco tendered full payment the award to its insured...On the other hand, Migaldi may not challenge whether information submitted by Safeco to the appraisal panel regarding policy coverages and limitations, or facts relating to the losses at issue was relevant or accurate, or properly within the panel's scope or authority...

...the prior appraisal proceedings and declaratory judgment entered in Migaldi I do not preclude her current bad faith claims to the extent premised on allegations of unreasonable delay in the adjustment of the loss, appraisal of claim, or payment of claim, as more specifically articulated above. See Dadeland Depot, Inc., supra; Bullard Building Condominium Association, Inc. v Travelers Property Casualty Co. of America, 2009 U.S. Dist. LEXIS 70663, 2009 WL 2423436 (M.D. Fla. 2009).

The Court noted and followed authority from another jurisdiction:

As observed by the court in Wailua Associates v Aetna Casualty & Surety Company, 27 F. Supp. 2d 1211 (D. Hawaii):

[The insurer's] submission to the appraisal does not absolve it from liability for bad faith as 'the trier of fact could reasonably conclude that .. [the insurer] intentionally delayed the appraisal process.' Green v International Ins. Co., 238 Ill. App.3d 929, 179 Ill. Dec. 111, 605 N. E.2d 1125, 1129 (Ill. App. 1992). … '[I]f an insurer could utilize the apprisal process to shield itself from the consequences of failing to make a reasonable settlement offer … it would defeat the principles' underlying a separate cause of action for liability outside the insurance policy. Smithson v United States Fidelity & Guaranty Co., 186 W. Va. 195, 411 S.E2d 850 (W. Va. 1991) 27 F. Supp. 2d at 1220. Thus, an insurer who ultimately pays a claim may be held liable for bad faith in the event of unreasonable delay in the processing and adjustment of the claim. Id., citing Best Place Inc. v Penn America Ins. Co., 82 Hawaii 120, 920 P.2d 334, 347 (Haw. 1996). (emphasis added)

Delay is the number one complaint about claims adjustment from policyholders. It is caused by a number of actions and failures to act by insurance companies. Insurance companies have a legal duty to provide a sufficient number of motivated, trained and experienced adjusters with authority to promptly investigate facts of coverage, evaluate damages, explain the benefits and options available to the , and quickly pay those benefits to the policyholder. Lately, some insurers have been hiding unfair claims behavior of failing to conform to this duty by conducting a second adjustment through appraisal. This holding by Judge Hurley is important because it recognizes that payment of a disputed claim resolved by appraisal and paid within the time permitted by the policy following an appraisal does not provide an insurer immunity from wrongful claims conduct.

As one may discern, Safeco is battling a policyholder attorney that does not easily give up. Kelly Kubiak of Merlin Law Group represents the policyholders in this case. I am very proud of her zealous advocacy.

Kelly will be sharing our Safeco and Liberty Mutual claims practice materials with other policyholder attorneys at the Bad Faith Litigation Group meeting at the Annual Convention of the American Association for Justice next week. Please call her or David Pettinato for information about joining this organization if you represent policyholders who have been subject to delayed or improperly handled insurance claims.

An example of how networking and sharing of information helps policyholder litigants is found in a West Virginia discovery Order in Ebbert v. Liberty Mutual Insurance. There, the Court appointed a special Master to aid in the discovery and specifically noted:

The Court is quite concerned about Liberty Mutual's answers and responses to Plaintiff's discovery requests.

...

The Court is not precluding the possibility of fines.

Some insurance defense counsel and insurers provide little or no useful information in response to discovery requests. They hope that the policyholder's counsel will be lazy and not compel the production of good faith answers or that overworked Courts will not get around to ordering responses. A book I noted in The Value of Networking and Sharing Insurance Claims Information Between Policyholders, "Full Disclosure," explains these tactics and what to do about those insurance defense attorneys and insurers that operate in less than good faith during the discovery process.

The Order in Ebbert v. Liberty Mutual also required the production of specifically named internal claims management documents which alert the rest of the policyholder's bar to what they should specifically demand from Liberty Mutual. This includes:

documents regarding the CFR program, Claims Outcome Advisor ("COA"), as well as documents that deal with bonuses, incentives and the processes for claims settlements.

Vivian Persand will be following up with West Virginia attorney David Jividen, who obtained this order. I strongly encourage any policyholder attorney with litigation involving Safeco or Liberty Mutual to contact Vivian Persand at 305-448-4800. I also encourage policyholder counsel to join the American Association for Justice Bad Faith Litigation Group, which David Pettinato, of our firm, chairs. The Bad Faith Litigation Group will meet at the AAJ's Annual Convention July 10-14 in Vancouver. We plan to hold a networking meeting among the attorneys with Safeco and Liberty Mutual claims practice cases.

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.

SOME SIMPLE STEPS ON HOW TO MAKE MORE MONEY BY PROVING PATTERN and PRACTICE

1. List the insurer and all their subsidiaries.
    
2. Do a Lexis or Westlaw search on all their Active Cases and Bad Faith Cases.
    
3. Contact the other attorneys, experts, etc. Travel to meet them to exchange information.
    
4. After getting a Core Group, have seminar/information sharing session regarding that insurer.
    
5. Join the Bad Faith Litigation Group of the AAJ.
    
6. Visit and retain multiple insurance claim experts early.
    
7. Advertise for information.
    
8. Hire Investigators to seek whistleblowers--from secretaries to claims executives.
    
9. Push on formal discovery with affidavits and other cases showing need and relevance.
    
10. Bold and Creative Wins--Example--Closed Claim File Review.

Insurance industry lobbyist Mark Delegal, who represents State Farm and other insurance companies, said Wednesday that bringing back the insurance deregulation bill - which passed last session but was vetoed by Gov. Charlie Crist - is definitely being explored by the industry.

"If there's a special session, we would be pursuing legislation that is the same as or similar to HB 1171," Delegal said.

Last session's HB 1171 would have allowed certain large, well-capitalized insurance companies to raise rates outside of the regulatory framework. It was an effort to appease companies that say they can't make money in Florida - including State Farm, which is trying to pull out of the property insurance market here because regulators won't allow it to raise rates to what it says it needs to charge to remain viable.

The legislation, sponsored last session by Rep. Bill Proctor, passed the House overwhelmingly - 105-13 - and passed the Senate 27-9. Those numbers give backers of the legislation hope that a veto override would be possible if lawmakers return.

Proctor said Wednesday in an interview that he had already filed the same legislation for next session, and acknowledged interest in the possibility of bringing it back earlier should there be a special session.

Here’s the question - Is Procter bought and paid for by the insurance industry? He is in the leadership of the Florida legislature. And, as a card carrying member of the Republican Party, I wonder whether our Republican legislative leadership is giving into corporate interests rather than the individual fiscal conservative interests that should be the bedrock of both major political parties. Insurance companies, as non-human “Citizens,” do not necessarily care about such concerns. The rest of us, breathing and bleeding types, really do care.

I pour my heart out for my policyholder clients. As I write this, I am making last edits to get that point out to some lawyers that will inspire other attorneys to do the same and make it worth their while to take on these very able insurance litigators. My speech is at the National Institute on Insurance Bad Faith.

I honestly feel humbled that some attorneys would pay to attend this seminar where I have the opportunity to teach them how my firm tries to help policyholders every day regarding their claims disputes. As far as I am concerned, this is our professional obligation. Still, I understand that the insurance companies try costly tactics against many of my colleagues that are not very well financed every day. Trying to make these cases simpler and less costly has been a concern of mine.

And after all this, we all benefit from those that advocate for fairness of rates and claims practices. These others, similarly situated, are those that support United Policyholders or are members of the AAJ Fair Insurance Claims Practices Group a/k/a Bad Faith litigation Group.

The bottom line is that I have deep concerns about how many in the Florida Legislature are advocating certain positions when they address the citizens of this State, but are behaving much differently behind closed doors. Stay tuned. 

I am proud that Merlin’s David Pettinato was elected as a Vice Chair of the Insurance Section of the American Association for Justice. He will also Co-Chair the Bad Faith Litigation Group. Kelly Kubiak gave a fine speech yesterday regarding Catastrophe Losses, and she was elected as the Vice Chair of the Bad Faith Litigation Group. David and Kelly are two of our firm’s most successful attorneys and their passion for helping other attorneys learn from their experiences shows in the leadership they provide. While I work with them day to day, in the presentations they made yesterday, I learned a few extra tips for better handling of my claims. I am certain that by putting thoughts and ideas to paper and teaching others, they learned lessons as well.

Attorney Jerry Ramsey gave a presentation about the recurrent issue of underinsurance. Given my recent post, Insurance Agents and Brokers Should Be Concerned Writing Risks with 100 Percent Coinsurance to Avoid Error and Omission Claims, Ramsey’s suggestions regarding the remedies that are available for policyholders with such issues is invaluable, and could only be learned by those attorneys who went to AAJ Convention and are members of the Bad Faith Litigation Group. I am much better today representing clients with these problems. How many of my colleagues do not even appreciate that the issue exists, much less have been trained to do something about it. I strongly urge attorneys with clients that have been underinsured to read Ramsey’s article, “Underinsurance Litigation: The Hidden Deductible,” in the November/December issue of the Consumer Attorneys of California magazine, Forum, Volume 38, number 6.

Since the former insurance company litigation claims manager made a point about how important discovery can be to finding embarrassing conduct in claims departments, I was also proud that Slabbed in "If you don’t stand for something you’ll fall for anything – Plaintiffs’ growing opposition to State Farm Protective Orders," described Deborah Trotter as a hard nose policyholder attorney hell bent on getting to the truth regarding State Farm in Mississippi. Slabbed quoted from one of Deborah’s briefs at length. I assigned the job of discovery disputes involving literally millions of documents in our case representing the Port of New Orleans to Deborah. She became an expert in electronic retrieval of information from computers, and I am happy she is using her knowledge and experience to get at State Farm’s misdeeds. I felt the conclusion of her brief was just as good as the quoted portion by Slabbed:

Several years ago, a Federal District Court Judge observed:

"District Courts are today being bombarded by an ever increasing number
of requests for protective orders. Some of the increase may be attributed
to legitimate attempts by litigants to stem the increasing use of abusive
discovery tactics. Much of the increase, though, must be attributed to a
practice among some attorneys to automatically seek protective orders in
every case where any potential for embarrassment or harm, no matter how
slight, exists."

Ericson v. Ford Motor Co., 107 F.R.D. 92, 94 (E.D. Ark. 1985)

Many courts have come to recognize a defendant’s true objective in seeking estrictive confidentiality orders, and in objecting to production of internal documents. See, e.g., Wilson v. American Motors Corp., 759 F. 2d 1568, 1571 (11th Cir. 1985)(Discussing harm to a defendant’s reputation); Earl v. Gulf & Western Mfg. Co., 366 N.W. 2d 160, 164-65 (Wis. Ct. App. 1985)(Discussing a defendant’s concern that the plaintiff might pass discovery information along to other plaintiffs involved in similar
litigation, and explaining that this rationale does not constitute good cause for a
protective order).

A number of legal scholars have recognized that the true motivation behind the
tactics utilized by large defendants, in seeking to cloak information with the robe of
secrecy, is to deny the plaintiff the benefit of coordinating discovery efforts, and to
otherwise prevent the disclosure of potentially embarrassing internal information:
“Frivolous claims of confidentiality have been asserted to cause delay and disruption, to drive up discovery expenses, and make it difficult for opposing counsels to simply understand the information being sought.” Martin I. Kaminsky, Proposed Federal Discovery Rules for Complex Civil Litigation, 48 Fordham L. Rev. 907, 929 (1990). Many courts, therefore, favor access to discovery conducted by other parties in collateral or similarly situated litigation. It makes the administration of justice more efficient. Any other result would require that “each litigant who wishes to ride a taxi to court must undertake the expense of inventing the wheel.” Ward v. Ford Motor Co., 93 F.R.D. 579, 580 (D. Colo. 1982). See also Wauchop v. Domino’s Pizza, Inc., 138 F.R.D. 539, 546-47 (D. Ind. 1991) (Federal Rules of Civil Procedure should be construed to foster the just, speedy, and inexpensive determination of every civil action....collaborative use of discovery material fosters that purpose.); Baker v. Ligett Group, Inc., 132 F.R.D. 123, 126 (D. Mass 1990)(To routinely require every plaintiff to go through a comparable, prolonged and expensive discovery process would be inappropriate.); Patterson v. Ford Motor Co., 85 F.R.D. 152, 154 (W.D. Tex. 1980)(The sharing of discovery information between plaintiffs may reduce time and money which must be expended in similar proceedings, and allows for effective, speedy, and efficient representation.); Cipollone v. Liggett Group, Inc., 113 F.R.D. 86, 87 (D. N.J. 1986)(Maintaining a high cost of litigation for future advisories is not a proper purpose under Rules 1 or 26.); Wilk v. American Medical Ass’n, 635 F.2d 1295, 1301 (7th Cir. 1980) (That the expense of litigation deters many from exercising that right is no reason to erect gratuitous road blocks in the path of a litigant who finds a trail blazed by another.); U.S. v. Hooker Chemicals & Plastics Corp., 90 F.R.D. 421, 426 (W.D. N.Y. 1981) (Use of discovery fruits disclosed in one lawsuit in connection with other litigation and even in collaboration among plaintiffs attorneys, comes squarely within the purposes of Federal Rules of Civil Procedure.); Foltz v. State Farm Mut. Ins. Co., 331 F.3d 1122, 1131 )(9th Circ. 2003) (This court strongly favors access to discovery materials to meet the needs of parties in collateral litigation.”)

Her point is well taken. When attorneys share information and ideas, our clients are the better for it. I am certain that the last thing the insurance industry wants is a better informed legal bar pointing out how unfair and wrongful some of its practices and conduct has become. Attorneys are in a better position to do so when they make the investment in their profession to come to the events such as those sponsored by the AAJ.

This is the California Law she referred to:

Cal Ins Code § 10082.3 Provisions regarding loss requirements, appraisals, and adjusters; Applicable policies

 Notwithstanding any other provision of law, the following provisions regarding loss requirements, appraisals, and adjusters shall apply to the following types of policies originated or renewed on and after January 1, 2002: all policies of residential property insurance, as defined in Section 10087, all policies, endorsements, or certificates of insurance providing coverage for loss or damage caused by the peril of earthquake issued pursuant to this chapter; and all policies of basic residential earthquake insurance issued pursuant to Chapter 8.6 (commencing with Section 10089.5).

...

 The insurer shall notify every claimant that they may obtain, upon request, copies of claim-related documents. For purposes of this section, "claim-related documents" means all documents that relate to the evaluation of damages, including, but not limited to, repair and replacement estimates and bids, appraisals, scopes of loss, drawings, plans, reports, third party findings on the amount of loss, covered damages, and cost of repairs, and all other valuation, measurement, and loss adjustment calculations of the amount of loss, covered damage, and cost of repairs. However, attorney work product and attorney-client privileged documents, and documents that indicate fraud by the insured or that contain medically privileged information, are excluded from the documents an insurer is required to provide pursuant to this section to a claimant. Within 15 calendar days after receiving a request from an insured for claim-related documents, the insurer shall provide the insured with copies of all claim-related documents, except those excluded by this section. Nothing in this section shall be construed to affect existing litigation discovery rights. (Emphasis Added)

I love the "including, but not limited to" language. Why shouldn't these documents be turned over? It would stop much of the gamesmanship and deceit that commonly occurs. Honest claims adjustment should be transparent--does anybody disagree?

I recently wrote on the noble work United Policyholders does on a very limited budget. Amy Bach's suggestion that this law become a national standard is well founded. It would prevent some of the needless insurance coverage lawsuits because the insurer's analysis would be truly transparent to the customer. I know of at least one major insurer, FM Global, that claims to have this good faith standard in place throughout the country.

For consumer interest attorneys attending the American Association of Justice Convention in San Francisco next week, Merlin Law Group, with a number of other policyholder law firms, is co-sponsoring a cocktail party to benefit United Policyholders. It will be held on Monday, July 27, in the private library at Bourbon & Branch, a 1920’s inspired San Francisco speakeasy located one block away from the AAJ convention hotel. It starts at 5:30 p.m.

Since the party is sponsored by a number of consumer interest law firms, including: Daley, DeBofsky & Bryant; Goldstein, Gellman, Melbostad, Gibson & Harris; and the Merlin Law Group, there is no cover charge and your first drink is on us. If you wish to support United Policyholders or add your firm as a sponsor of this FUNraising?? event, a minimum (tax deductible) contribution of $500 is required. Please contact Emily Cabral at (415) 393-9990 or emily@uphelp.org to sponsor, donate, or obtain an invitation.

The work of a handful of policyholder advocates such as Amy Bach help keep policyholder interests in front of state legislatures and Departments of Insurance despite an extraordinarily well funded opponent. I find it ironic that the major players in the insurance industry spend so much time and money trying to prevent passage of laws, such as the one above, which would ultimately protect them, as well as their consumers, from unscrupulous competitors. Maybe that says something about the claims culture of many insurers...and something they should think about when they reflect on business ethics and lobbying

I am going to suggest that we change the name to the Insurance Claims Practice Litigation Group. I think it better describes the information we share and the concern that we have to help people who have been harmed by wrongful claims practices. Indeed, as adjusters are obligated to act in utmost good faith, I have no reason why we call it “Bad Faith.” Everybody’s concern, including the claims managers in the insurance industry, should be adjusters failing to carry out their obligations in “Good Faith.”

Hope to see you in San Francisco. Here is the agenda of the meeting:

Program Theme: Recovering Damages in a Difficult Litigation Environment

• 8:30 am Opening Remarks
• 8:45 am Making the Successful Claim for Emotional Stress Damages Recoveries in an Insurance Case: A. Richard Maloney, WA
• 9:15 am Helping the Client Who Is the Victim of a Catastrophic Loss Obtain Funds Quickly: Kelly L. Kubiak, FL
• 9:45 am Panel: Dealing with the Carrier’s Claim That Your Client Has Committed Fraud or Made a Class A Material Misrepresentation: Patrick H. LePley, WA; Charles M. Miller, CA;
  David J. Pettinato, FL
• 10:15 am Punitive Damages, State Consumer Protection Statutes with Damage Remedies, and the Fallout from the Campbell Case:  Kenneth R. Friedman, WA
• 10:45 am Subrogation Clauses in ERISA Plan Documents: When They Can Be Enforced and When the Make Whole Doctrine Can Prevail:  Mark D. DeBofsky, IL
• 11:15 am Adjourn
• Lunch
• 1:30 PM Closed Session
• 4:30 End of Meeting 
   

The American Association for Justice is having its Winter Conference in New Orleans. A number of specialized litigation groups will also have their meetings. The Bad Faith Litigation Group is comprised of consumer attorneys that have cases where the insurance company has engaged in wrongful conduct.

Over a decade ago, I served as the Chair of that Litigation Group. David Pettinato is also a past Chair and Kelly Kubiak is a current officer. We find that by sharing information among consumer attorneys across the country, we can gain knowledge and better represent our clients against insurance companies. Twice a year, we formally get together as friends trying to help each other in our battles against wrongful insurance company practices.

The Bad Faith Litigation Group shares information regarding many insurance companies. I strongly encourage attorneys representing policyholders to join. Nobody representing insurers is allowed to be a member. Contact Kelly Kubiak if you have questions.

The Port of New Orleans lawsuit was very unique. When you pour your heart and soul into a difficult endeavor with others, there is often a special bond that forms. We expected the lawsuit to drag on through this summer. When it settled early last September, most of us missed the day to day litigation grind that takes place in such a massive lawsuit. We built a fairly large contract legal staff that was suddenly without a lawsuit to work upon. What do you do when the war is over?

Tonight, we are hosting a Port Legal Team Dinner to celebrate our work and accomplishments. New Orleans attorney, Bill Hall, was a perfect co-counsel. Like so many attorneys in New Orleans, he is a diehard LSU Tiger (pronounced "Tiga") fan. I guess Florida Gators and LSU Tigers can come together for mutual gain when they put their minds to it. I will always be indebted to Bill and the General Counsel of the Port, Brien Gussoni, for believing in our talents and selecting our firm as the litigation insurance counsel.

There is one aspect to New Orleans that everybody has to admire---the New Orleans people know how to have fun. It is a culture different from that anywhere else in the United States. The music, food, and people are exotic, and we are better for it. While New Orleans still has not recovered from Hurricane Katrina, Mardi Gras fun is still going on in the Vieux Carré.