A bit over a week ago a print journalist familiar with Slabbed’s coverage of the post Katrina insurance wars sent me this link to a National Underwriter top 10 insurance living legends piece that featured Dickie Scruggs (one notch above true living legend Karen Clark) at the 7 spot. We used to feature the NU a good bit on Slabbed but that ended after they ignored the insurance industry getting its ass kicked in Corban v USAA where Nationwide Insurance’s lawyers made particular asses of themselves asserting wind coverage was properly denied if, after the wind 99% destroys the covered property, storm surge destroys the other 1%. The industry contends in such a scenario taxpayer provided coverage under the National Flood Insurance Program was the proper source of coverage and that is exactly the way they adjusted their claims here after Katrina tendering flood insurance policies pretty much sight unseen and denying any wind coverage that would come from their coffers.
For those of you folks still wondering why the country is broke after figuring out it is not the union pipe fitter that goes to work everyday for 6AM at the shipyard, or school teacher unions or Mexican ditch diggers, I’d submit if you multiply the above scenario 1000 times and you’d find the answer as most of the politicians that matter on any level are owned by some special interest. To illustrate the point allow me to update several insurance business world stories Slabbed covered in years gone by and start with that NU story I linked above.
A few weeks ago word filtered out the Rigsby sisters false claims act complaint against State Farm would be moving to trial on the exemplar claim known around the blogs as McIntosh v State Farm. State Farm is PR savvy and when that case heats up, invariably David Rossmiller, a partner at the Portland Oregon insurance defense firm of Dunn Carney pops up like a fly on shit regaling us with his knowledge of the minutiae of insurance contract law. Since Rossie, as he is known on Slabbed, surfaced blogging on Hurricane wind water cases of the type he has never tried in Oregon, it naturally aroused suspicions locally that he was an adjunct of State Farm PR, a view now widely shared in the local print media in South Mississippi. Back in the day Rossie was a darling in local insurance defense circles and on the Hard Line GOP political resource YallPolitics in the blogosphere, which still features the insurance litigation here on the coast in a section termed Scruggs scandal and it is indeed a popular insurance industry meme that the wind damage down here was all a figment of Dick Scruggs imagination thus the lumping. Scapegoating trial lawyers in still popular in GOP circles folks but that stands to reason since the GOP is the party of big business special interests but I’m getting ahead of myself.
Everyone has heard the old saying that a leopard does not change its spots and like many idiomatic expressions that its roots in antiquity, it accurately describes the human condition. Judge Feldman’s latest interest conflicted ruling regarding the drilling moratorium and the intense interest therein has opened the flood gates of information flow from the Slabbed Nation. It was a reader sending me one of Feldman’s rulings involving a lawsuit against an oil company that resonated with me as the tactics dishonest corporate defense lawyers and their lackey judges evidently use with regularity in the court system pop up again and again in litigation, whether it is the ordinary citizens against big oil or big insurance.
Let’s begin with a case from the 1990’s before Judge Feldman where ol Marty tries gave an offshore worker that was hurt on the job the Feldman in an attempt to deprive the man of justice. I used the word attempt because Feldman’s conduct in court formed the basis of an appeal so it from the Westlaw analysis of the case Billy G. and Cheryl Bufford v Rowan Drilling Company that we begin:
“Policyholders should be aware that Mississippi law provides that insureds have an affirmative duty to read a contract of insurance and are bound by the contents thereof”, according to the Mississippi Insurance Department’s (MID) Policyholder’s Bill of Rights (PBOR).
Merriam-Webster’s Dictionary of Law defines affirmative duty as, “involving or requiring the application of effort”. In other words, what the law actually requires is that insureds make an effort to read their insurance contract. What a relief!
An important study, by Forrest E.Harding in the Journal of Risk and Insurance in 1967, found that a specimen auto policy was substantially more difficult to read than Albert Einstein’s The Meaning of Relativity. In response to urging by consumer groups, Plain English advocates, and regulators, insurance companies began to revise and simplify their contracts as far back as the 1970s—some voluntarily, some in response to state laws.
“There is no question that district judges have for many, many years appointed their friends and campaign contributors as curators for absentees,” said Dane Ciolino, a Loyola University Law School professor specializing in legal ethics. “This is true all over the state, not just in Jefferson.”
I wonder how many of those guys were also (supposedly) full-time Parish President’s serving the largest parish in the state in the aftermath of the largest natural disaster in US history hmmmm???
A few weeks back I was contacted by a journalist inquiring if we knew anything about a small time non-admitted carrier based out of Utah, Prime Insurance Syndicate as they had plastered a press release all over the internet trumpeting a jury verdict down here in their favor as something unique and GASP they found the local jury to be very fair. The press release was so over the top we did some checking and after pulling the case up on PACER we decided it was not worth wasting time or space here on Slabbed covering. Insurers have won several verdicts here including some cases we profiled in Aiken and Bossier so we considered the source and moved on. Then in one of those famous serendipitous Slabbed moments I ran across an article in Claims Magazine which covered the verdict. As the blue collar retirees that were through my office yesterday giving me their tax information would say let tackle this for shits and giggles. We begin with last month’s press release:
Prime Insurance Syndicate, Inc. was successfully defended in a Hurricane Katrina lawsuit in the United States District Court for the Southern District of Mississippi. This is believed to be the first jury verdict in Mississippi exonerating an insurer in a Hurricane Katrina claim.
After six days of trial, the jury unanimously rendered a defense/zero verdict on January 19, 2010. The Plaintiffs’ complaint, filed in October 2007, alleged bad faith refusal to pay the insurance claim, willful and negligent breach of contract, breach of the duty of good faith and fair dealing and other claims, for which Plaintiffs claimed over $7 million in compensatory and punitive damages. The jury returned a defense/zero verdict, finding that Prime Insurance Syndicate, Inc. did not breach its contract with the Plaintiffs.
A challenging case in the post-Katrina environment, Prime had already paid everything that was owed under the policy and had come to an agreement with the Plaintiff’s own representative.
…and that I know because David Rossmiller said it was in an article he wrote on Plain English for the Spring 2008 issue of the Oregon Association of Defense Counsel.
In a 1985 article about the drafting of State Farm’s anti-concurrent-cause provision, Michael E. Bragg, an in-house lawyer with the insurer, said drafters made attempts to reduce the clause to language the layperson could understand, but they failed. When the drafters made the language understandable to the average person, they considered the language insufficiently precise to do what it was intended to do, which was (1) to contractually overturn the so-called “efficient proximate cause” analysis, a common law default rule that almost all jurisdictions use to analyze first-party property loss in the absence of a different, contractually mandated analysis; and (2) to stop the spread of new, judicially created causes of loss,and confine covered causes of loss only to those that companies intended to insure. This is important to remember because it is the key to the limits of Plain English laws.
As the Bragg article shows, simplified language was unsuitably risky because it did not address the court precedents that insurers wanted to cancel out. It did not contain the terminology and phrases used by the courts, nor did it accurately state the jargon of insurance causation, where words like “concurrent” and “sequential” have meanings far different and more complicated than their meanings in common parlance. Insurers, then, do not write for consumers, they write for courts.
The part of me that has relied on David Rossmiller’s excellent writing on anti-concurrent causation wanted to believe Sop was wrong when he wrote:
No comment Nowdy. Rick’s analogy of the prize fight junkie comes to mind and things are heating up in both “Ex Rel” cases.
Obviously, it was wishful thinking on my part that he would focus on the significant events since September that Sop also mentioned. As it turned out, Rossmiller managed little more than a discrete “I’m back” before launching his first attack – questioning, of all things, Judge Senter’s motivation for the order he issued in the Rigsby qui tam case:
I was looking at the docket of this case, and there was an order by Judge L.T. Senter Jr. in mid-February, and here it is. This is a fascinating order, typically brief, well-written and to the point, which to me appears a clear indication Senter may be getting ready to pull the chain on this thing.