Claims And Issues

Defendant's Expert's Report More Than a Rebuttal: Strike or Supplement?

   Whether to strike a Defendant's Expert Witness's Report, or allow the Plaintiff's Expert to Supplement "its rebuttal expert report" was the question at issue in this recent non-Insurance case:  Download Southern Pan Services Co. v. S.B. Ballard Construction Co. (M.D. Fla,, Morris, United States Magistrate Judge's Order filed 08.20.09.)

   The Plaintiff argued that the Defendant's Expert Witness Report in that case went beyond simply rebutting Plaintiff's Expert Witness Report to include "additional matters not covered by Plaintiff's expert report ...."  Download Southern Pan Services Co. v. S.B. Ballard Construction Co. (M.D. Fla, Order filed 08.20.09.), attached Official Slipsheet Opinion at 2.

   The Magistrate Judge concluded that "the Court finds confusion with respect to the parties' obligations under the expert disclosure deadlines could have easily occurred" under the terms of the Orders entered in that particular case.  "Accordingly, the Court does not find bad faith on the part of Defendants in only supplying one expert report."  The Motion to Strike the Defendant's Expert Witness Report was denied.  The Plaintiff, however, was given "the opportunity to supplement its rebuttal expert report to address only Defendants' expert's opinion(s) that relate to Defendants' positive claims," i.e., the 'additional matters not covered by Plaintiff's expert report' in question.  Download Southern Pan Services Co. v. S.B. Ballard Construction Co. (M.D. Fla, Order filed 08.20.09.), at 3.

   Note:  The Author is frequently retained as an Expert Witness in Insurance cases including Claims Handling, Coverage, and Good Faith and Fair Dealing.

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   Some people reportedly are arguing that a requirement to have Health Insurance is Unconstitutional.  See Katharine Q. Seelye, Prescriptions Blog Post Published as "Insurance Mandate:  The Legal Issues" p. 20, col. 5 (New York Times, Sunday, September 27, 2009).  There is no mention in the linked newspaper report that the proponents of this view have researched why it is Constitutional to require people to have Automobile Insurance.

   These arguments are perhaps best relegated to Twitter.  There probably should be a limit on characters.

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Overwhelming Support, Unheard So Far, Favors Public Health Insurance Option.

   65% of people in America support the Federal Government offering everyone a government-administered Health Insurance Plan like Medicare that would compete with private Health Insurance Companies.  Adam Nagourney and Dalia Sussman, "Poll Finds Frustration on War and Health Plan" p. A1, col. 2 (New York Times Nat'l ed., Friday, September 25, 2009).

   When that many people favor it, it would be a travesty if some form of the Public Health Insurance Option is not enacted.

   There would be many reasons expressed if it is not enacted.  But they would not be good reasons.

   It would still be a travesty.

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Capital Requirements Hiked for Banks; Reserves Up/Down for Life?

   The Obama Administration plans to curb financial excess and failure by imposing higher Capital requirements on Financial Institutions.  See Download Treasury Secretary T.F. Geithner Written Testimony Before U.S. House Financial Services Committee 09.23.09.  This seems like a lesson learned from Reserves requirements imposed by the States on Insurance Companies.

   Another lesson learned from the States' Regulation of Insurance Companies is the concept of "insurable interest".  It is another part of the Administration Plan to require securities speculators to have an interest in things being insured by Credit Default Swaps for example.

   An old saying has it:  Everything is changing, but nothing is new.

   In a somewhat related note, it appears that while the Obama Administration is learning lessons from State Insurance Regulators, the State Regulators themselves may as a body be in the process of forgetting -- or ignoring -- those same lessons.  It is reported that a majority vote in the National Association of Insurance Commissioners has approved a model law which would move Life Insurance Companies away from their current Reserves requirements to something called "principles-based reserving".

   Another description of this method of setting Reserves has been offered:  "[A] 'trust me' approach to regulation."  David Hilzenrath, "Life Insurers Seek More Flexibility/Group Endorses a New System for Reserve Requirements" (Washington Post.com, Thursday, September 24, 2009), quoting New York Life Insurance Company Vice Chair Gary Wendlandt.  [Emphasis added.]

   It is unclear whether this approach to reserving and regulation will benefit people paying Premiums for Life Insurance Coverage.  Supporters of the change at the NAIC announced that the Reserves change would give "greater discretion" to Life Insurance Companies and make it "easier" for regulators.  Life Insurance Companies have been pushing the NAIC to turn to 'principles-based reserving' for the reason, they urge, that the current Reserves requirements are too high.  This would imply, of course, that the Life Insurance Company personnel think that the new kind of reserving and regulation will lower their Reserves requirements.  This is consistent with the position taken by the Commissioners who voted against the change.  The Wisconsin Insurance Commissioner, for example, is quoted in the linked article as observing:  "'I'm afraid that the consumer may not have the reserves there when we face a future financial crisis.'"

   There can be no doubt about this:  Time will most certainly tell if and after this change takes effect.

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Value of Hedge Funds to Insurers Plunges, Insurers Say "Goodbye."

   Insurers have in the past invested happily in hedge funds.  However, hedge funds in recent months have reportedly returned 25 percent losses.  There is reportedly an even greater loss in value to investors in hedge funds, greater even than the loss of return on invested money.  Reportedly, hedge funds have lost two characteristics that attracted Insurance Company investments:  Steady returns and low volatility.  These losses in hedge fund value have caused many investing Insurance Companies to bid hedge funds farewell.  See Kevin Crowley, "Lloyd's of London Insurers Punish Hedge Funds After 2008 Losses" (Bloomberg.com, Thursday, September 17, 2009).

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Insurance Regulators Confab Over Credit Ratings Corporations.

   Insurance is reportedly the largest single industry among all U.S. Financial Services providers, that relies on ratings by Credit Ratings Corporations.  The source of this information is the National Association of Insurance Commissioners.  Lilla Zuill, "NY Insurance Official Raises Concerns Over Moody's" (Reuters Report published in The Washington Post Online, Sunday, September 20, 2009).

   On September 24, 2009 Insurance Regulators will deliberate during the NAIC's Fall National Meeting in what is variously described in the linked newspaper report as a "meeting" and as a "hearing" which will include "concerns over the current ratings system."  Lilla Zuill, Reuters/Washington Post Online, supra.

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Bank of America, Merrill Lynch and Their Attorney-Client Privileges.

   The merger and acquisition by Bank of America with and of Merrill Lynch has drawn scrutiny from several points of the compass.  One was a rejected Consent Settlement Judgment engineered between the Securities and Exchange Commission and Bank of America; another is an inquiry by the Office of the New York Attorney General; and a third is the U.S. House Committee on Oversight and Government Reform.  Of these, the most reported recently have been the first and the last, the proposed SEC-BOA Consent Judgment rejected by a United States District Judge, and the refusal of BOA to turn over documents tending to reflect conversations it had with its attorneys, or that Merrill Lynch in turn had with its attorneys, before and during the merger and acquisition in which BOA ended up with Merrill Lynch.

   In each proceeding to date, BOA has reportedly stood by its invocation of Attorney-Client Privilege.  At the same time, in each proceeding to date BOA has also reportedly blamed its lawyers for a number of issues.  The legal proceedings are addressing, in varying degrees, issues including (1) when BOA officials first became aware of Merrill Lynch's losses in 2008, particularly whether that date was before or after the Federal Government guaranteed BOA a second round of Federal Taxpayer Money for BOA's second bailout and (2) what advice was given to BOA by its lawyers when BOA both told its shareholders that BOA would review any bonuses Merrill might try to award to Merrill's officials, and did not tell its shareholders that Merrill had already paid those bonuses.  See Louise Story, "A Standoff Over Attorney-Client Privilege" p. B1, col. 2 (New York Times Nat'l ed., "Business Day" Section, Monday, September 21, 2009), for some reason given a different headline Online, as "Congress Presses for Details From Bank of America on Talks".

   If BOA is defending itself on the ground that it relied on the advice of its counsel in regard to these matters, then it would be opening up discovery of that advice.  If BOA were a Defendant in a Bad Faith case, among other kinds of cases for example, that would be the likely ruling.

   BOA, however, contends that it is not relying on a defense of advice of counsel, although BOA also contends that its officials did rely on the advice of its counsel, in simple terms.  In the SEC proceeding, this did not wash.  The Federal Judge rejected the proposed SEC-BOA Consent Judgment in that proceeding partly because it is "simply an evasion" for BOA to claim that it is not relying on a defense of advice of counsel while invoking the Attorney-Client Privilege in its continuing refusal to provide information and documents.  Download Securities and Exchange Commission v. Bank of America Corp. (S.D.N.Y. Opinion Filed September 14, 2009), at 5 & 9 n.3.

   Similarly, BOA has refused to provide information and documents to the U.S. House Committee that reflect discussions with and advice from BOA lawyers and BOA officials that would in essence reveal who at BOA knew what, and when did they know it.  Reportedly, BOA relied on a bill that was rejected by Congress when BOA argued to the House Committee in response to the request for documents, that it should be able to raise the Attorney-Client Privilege against a Congressional investigation.  BOA cannot raise the Attorney-Client Privilege as a reason to refuse to provide the U.S. Congress with documents requested during a Congressional investigation, if settled law is to be followed.   Louise Story, "A Standoff Over Attorney-Client Privilege," New York Times, supra.

   Parenthetically, making an argument based on a bill that was rejected, seems similar to making an argument based on a dissenting opinion in a case which is dead against your client's position.  It is puzzling, at the least, why any advocate would apparently highlight the weakness of that position by calling attention to the prevailing authority which is directly against the client's position in the matter.

   Withholding many documents did not prevent BOA from dumping on the House Committee large numbers of other documents which have nothing to do with the issues, in any event, according to this Press Release on Monday, September 21, 2009 from the House Committee on Oversight and Government Reform, "Bank of America Refuses Chairman Towns' Request for Key Documents/Bank Responds to Committee With Redacted, Irrelevant Documents".  On the same day as this Press Release, it was also reported as 'news' that BOA's "chief marketing officer" would be meeting the next day with the Chair of the House Committee.  Jonathan D. Salant and David Mildenberg, "Bank of America Agrees to Meet U.S. House Oversight Chairman" (Bloomberg.com, Monday, September 21, 2009).

   Actually, the meeting between BOA's marketing official and the Committee Chair had been set for awhile.  In fact, BOA asked that its response to the Committee's document request be delayed until that meeting.  (Apparently, like all marketing personnel, BOA's marketing official has high confidence in her abilities to persuade.)  The request was denied, it was previously reported.  Louise Story, "A Standoff Over Attorney-Client Privilege," New York Times, supra.  Still, it looks like BOA is going to get its meeting without producing any documents.

   Time will tell how much more of its way BOA gets.

There is a series of posts on these issues on Insurance Claims and Bad Faith Law Blog, www.insuranceclaimsbadfaith.typepad.com, and particularly on the story of the SEC-BOA Consent Settlement Judgment as that story unfolded, beginning on August 11, 2009 and continuing on August 13, August 25, September 13, and September 14, 2009.

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Chinese Drywall: The NON-Insurance-Related Claims.

An interesting post on "Venture" Blog post by Robert Trigaux on St. Petersburg Times Online on August 12, 2009, "Tainted Chinese Drywall:  Regulators, Judges, Lawyers Moving Into Fast(er) Lane," points out several alternatives to Insurance that are being pursued at the present time.  Mr. Trigaux is the Times Business Columnist and Editor.

By way of brief background, the installation of Chinese Drywall in homes built in the United States has resulted in a flurry of reports and Claims arising out of its reportedly nasty smell of sulfur and corrosion of such things as "copper tubes in air conditioning."  Id.

The non-Insurance-related treatment of Claims arising out of the installation of Chinese Drywall includes:

1.  An investigation by the United States Consumer Product Safety Commission;

2.  Introduction in the U.S. Congress of the proposed Foreign Manufacturers Legal Accountability Act of 2009, which "could make it easier for homeowners with defective Chinese drywall" to sue the Chinese manufacturer(s) in U.S. Courts;

3.  Placing some 600 cases on "fast track" for Trial in Federal Court in New Orleans, Louisiana where the 600 cases have already been consolidated for pretrial discovery and  other issues; and

4.  Last but not least:  One person has telephoned the White House and left a message for the President of the United States describing the difficulties faced by homeowners with Chinese Drywall in their homes.

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CATClaims Coverage for ... Interrupted Vacations.

Do you have plans to vacation in Cancun?  Vieques?  The Mexican Riviera?  Some people spend more money on travel than some families have to spend on food in a year.

Finding Insurance Coverage for expensive travel plans and locating alternative ways of minimizing the effects of disruptions in expensive vacations are all explored by Michelle Higgins, "The Claim Before the Storm" p. 3, col. 1 (New York Times Nat'l ed., "Travel" Section, Sunday, September 6, 2009).

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California Wildfires Drive Increases in Premium, Decreases in Homeowner's Coverage Decreases

   Wildfires in California are driving up Homeowners Insurance Premiums.  According to this linked newspaper report, the same wildfires may also drive future decreases in Homeowners Insurance Coverage.  Marc Lifsher, "Insurance/California Homeowners Facing Insurance Rate Hikes" (Los Angeles Times Online, Tuesday, September 1, 2009).

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Privileges and Claim File Documents in Ohio Bad Faith Claim.

  Privileges and Claim File Documents were one of the issues in an Ohio Bad Faith Claim pending in Federal Court in Download In re Professionals Direct Insurance Co. (6th Cir. Opinion Filed August 24, 2009).

    Professionals Direct Insurance Company was a malpractice carrier and the Plaintiff Counterdefendant.  The Defendants and Counterplaintiffs were an Insurance Defense Lawyer and his Law Firm.  The Counterplaintiffs were previously retained by Illinois National Insurance Company to defend a lawsuit filed against an employee of one of Illinois National's Policyholders.

    During discovery in the Federal District Court, the Counterplaintiffs sought multiple documents and other tangible things from the Claim Files of Professionals Direct.  Professionals Direct raised the Attorney-Client Privilege in declining to produce at least some of its Claims File.  The United States Magistrate-Judge ruled that, under Ohio substantive Law, a "constructive denial date" would have to be identified.  

    Decisions of the Ohio Courts had established that Ohio Law does not recognize any Attorney-Client Privilege on the part of an Insurance Company, under perhaps ambiguous circumstances.  On the one hand, the Ohio Courts have clearly ruled that the Attorney-Client Privilege does not attach under Ohio Law to any documents "containing evidence of bad faith on the part of an insurer".  In addition, however, the Ohio Supreme Court in particular announced this rule of law in a Bad Faith Case in which it ordered a Defendant Insurance Company to produce all materials made before the Denial of all Coverage.  Download In re Professionals Direct Insurance Co. (6th Cir. Opinion Filed August 24, 2009), at 11-12.

    However, in this particular case, Professionals had defended under a Reservation of Rights and had never formally denied Coverage.  Download In re Professionals Direct Insurance Co. (6th Cir. Opinion Filed August 24, 2009), at 12.

    In the absence of an outright Denial of all Coverage, let alone in the absence of any such actual date of Denial of Coverage, the United States Magistrate Judge identified the date that Professionals informed the Counterplaintiffs that it, Professionals, was going to seek a Declaratory Judgment that the underlying Claim was not covered.  All materials in the Insurance Company's Claim Files made before that date were deemed un-Privileged under the Attorney-Client Privilege prevailing in Ohio, and were thus discoverable in that case.

    The Magistrate Judge then issued an Order accordingly, and Professionals complained that the Magistrate Judge should have examined each document individually in order to determine whether they were Privileged or not under Ohio Law, such that the Order accordingly constituted "clear error".  Download In re Professionals Direct Insurance Co. (6th Cir. Opinion Filed August 24, 2009), at 12.  The District Judge denied Professionals Direct's motions to set the Order aside.

    On a proceeding for a writ of mandamus, the Sixth Circuit held that the Discovery Order in question was not clearly erroneous and it was similarly affirmed.  Download In re Professionals Direct Insurance Co. (6th Cir. Opinion Filed August 24, 2009) at 13.

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APPEAL IN Maldonado CASE: POSTED 07.23.09.

  The Maldonado decision of the Southern District of Florida, posted here on July 23, 2009, was affirmed by the Eleventh Circuit Court of Appeals in Download Maldonado v. First Liberty Insurance Corp. (11th Cir. Opinion Filed August 17, 2009).

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Health Plans, But No Dental Plan?

    Very few people have Dental Insurance.  Those that have Health Insurance Plans that Cover some Dental procedures have Coverage that just does not go very far.  See generally Walecia Konrad, "How to Manage Dental Costs, With or Without Insurance" p. B6, col. 1 (New York Times Nat'l ed., "Personal Business," Saturday, September 5, 2009).

     To find Dental Clinics and their locations as an alternative to trying to find Dental Insurance, the linked newspaper article identifies a possible resource for you and your clients at Oral Health America, www.oralhealthamerica.org.

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If Commercial Construction Loans Default, Insurance and Bond Claims May Follow.

    Fears continue of possible mass defaults on many Commercial Construction Loans.  Fear of Default has been embedded in the Commercial Construction Loan Market for months.  See generally Floyd Norris, "Off the Charts/Construction Loans Falter, a Bad Omen for Banks" p. B3, col. 1 (New York Times Nat'l ed., "Business" Section, Saturday, September 5, 2009).  As compared with the woes of loans for the construction of single-family homes, reportedly "[i]t is in commercial real estate construction -- be it stores or office buildings -- that the pain seems likely to rise."  Id.

    In particular, a research firm cited in the linked article predicts that "the biggest problems are in loans for condominium construction, with 38 percent of all construction loans troubled."  Id.  [Emphasis added.]

    If Commercial Construction Loans go into Default in large numbers, Insurance and Bond Claims will not be far behind.

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UPDATE to "Accountable Accounting ...."

    .... This is an UPDATE to a post here on August 21, 2009.

    In addition to blaming lawyers for the financial fiasco they made themselves, Wall Streeters are reportedly also blaming CPA's:  See Floyd Norris, "High & Low Finance/Accountants Misled Us Into Crisis" p. B1, col. 1 (New York Times Nat'l ed., "Business Day" Section, Friday, 911 2009).

    The linked report illustrates the importance of understanding the importance placed by Wall Streeters -- including Life and Health Insurance Companies, as previously posted here -- on debits and credits and hiding losses by keeping them off the ledger sheets, all in their own vision of generally accepted accounting principles, apparently.

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More Insurance Issues and not-so-Great Drywall of China: ...

   ... Property Insurance Policies and Their Pollution Exclusions.

    As was the previously posted situation concerning Commercial General Liability ("CGL") Insurance Policies, no reported cases have been found involving Chinese Drywall and Property Insurance Policies.  Similarly, in the absence of decided cases, general principles of Insurance Law must provide the only available guidance to predict the outcomes of Property Insurance Coverage Claims involving Chinese Drywall.

    In general terms, Property Insurance Policies are of two kinds.  By far the most prevalent is "all risks" Coverage.  It provides Coverage for "all risks" except to the extent that they are Excluded under the Policy.  The other type of Property Insurance Policy is "specified causes of loss" Coverage under which only specified causes of loss are covered.  The "specified causes of loss" Property Policy thus presents an additional set of Insurance Issues not present in cases involving "all risks" Coverage.  See generally Dennis J. Wall, "Property Insurance Coverage Issues:  Exclusions," Chapter 7 and in particular § 7:1 in "CAT Claims:  Insurance Coverage for Natural and Man-Made Disasters" (West Publishing Company 2008).  "All Risks" Policies were involved in all of the cases discussed in this post.

    After examining all of the available standard Exclusions in "all risks" Property Insurance Policies, the Pollution Exclusion stands out as the Exclusion most likely to be involved in Property Insurance Coverage Claims involving Chinese Drywall.

    The standard form of Pollution Exclusion in Property Insurance Policies which otherwise provide Coverage for "all risks," reads in pertinent part to exclude loss caused by:

    (e) discharge, dispersal, seepage, migration, release or escape of pollutants unless the discharge, dispersal, seepage, migration, release or escape is itself caused by a Peril Insured Against under Coverage C of this policy.

(Despite the reference to "a Peril Insured Against," an "all risk" Policy has never been found which provides Coverage for specified "Perils" instead of "all risks".  Perhaps as a result, there is never a Policy Definition of "a Peril Insured Against" under an "all risk" Property Insurance Policy.)

    "Pollutants" and "contamination" may be terms defined in another form in the Property Insurance Policy, or one or both may be defined as a part of the Pollution Exclusion, usually in the following words or in words like these:

Pollutants mean any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste.  Waste includes materials to be recycled, reconditioned or reclaimed.

Pollution Exclusions and Policy Definitions from Property Insurance Policies can be found in many reported cases, including Arnold v. Cincinnati Insurance Co., 276 Wis. 2d 762, 787, 688 N.W.2d 708, 720 (Wis. Ct. App. 2004)(subscription required), link to Official Slipsheet Opinion here; and Yale University v. CIGNA Insurance Co., 224 F. Supp. 2d 402, 421 (D. Conn. 2002), case closed following settlement and dismissal.

    In evaluating the potential outcomes of Property Insurance Coverage Claims resulting from the use and installation of Chinese Drywall, then, it is important to focus on whether the Court is or is not likely to determine that the case involves "pollutants" and "contamination," and, if so, whether such pollutants and contamination were discharged, were dispersed, seeped, migrated, were released, or escaped before they caused the damage complained of. 

If Settlement Offer (by Plaintiff) Refused Not Reasonable, ...

   ... Liability Insurer's Coverage conduct apparently held beside the point in California Case of alleged Bad Faith in Settlement--at least in terms of what a Bad Faith Plaintiff must prove in such a Case.

    In the case of Download Vaid-Raizada v. Lexington National Insurance Co. (C.D. Cal. Order Filed 08.12.09), attached Official Slipsheet Opinion at 6-7, a United States District Judge interpreted California Third-Party Bad Faith Law in the context of a Third-Party Bad Faith Claim involving an alleged failure to settle.  In particular, the Federal Court interpreted California's fairly and reasonably debatable defense and limited it to Coverage in that specific context.

    As the Federal Judge read California Insurance Law, "tort recovery for breach of the implied duty to settle does not require Plaintiff to prove that Defendant's coverage position was unreasonable; rather, it requires Plaintiff to prove that Defendant refused a reasonable settlement offer."  Download Vaid-Raizada v. Lexington National Insurance Co. (C.D. Cal. Order Filed 08.12.09) at 7.  [Emphasis by the Court.]

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Reliance on Preexisting Case Law Since Rejected, Held Not Unreasonable.

    Accordingly, California's Second District Court of Appeal was of the opinion that there could be no First-Party Bad Faith for that reason, "[f]irst and foremost".

    There was one and only one reported judicial decision available on the legal issue involved.  Although the Second District expressed its clear disagreement with that sole available decision, the fact that the only available decision was relied on by the Disability Insurance Company Defendant was not unreasonable.  Therefore there was a "genuine dispute" regarding the physical disability at issue in the case recently decided by the Second District.  Download Bosetti v. United States Life Insurance Co. (Cal. 2d DCA, Div. 3 Opinion Filed July 17, 2009), attached Official Slipsheet Opinion at 40, 44-45.

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"Property Damage" and the Not-So-Great Drywall of China: ....

   ....  The Coverage Issues Continue.

   Commercial General Liability or "CGL" Insurance Policies are the main kind of Liability Insurance Policies issued to general contractors and to subcontractors on construction projects.  They are then the main kind of Liability Insurance Policies that are likely to be involved in Chinese Drywall Claims, if at all.

    "Property Damage" in or under a CGL Policy generally includes physical injury to tangible property.  It can also include resulting loss of use of that tangible property, in basic and general terms.

    Like "Bodily Injury" Liability Coverage, "Property Damage" Coverage is ordinarily limited in a CGL by a requirement that there be a covered "Occurrence" within the Policy Period.  That time is often held by the Courts to be when the Property Damage manifested itself.  Cf. Download Mancini v. Insurance Corporation of New York (S.D. Cal. Order of Stormes, United States Magistrate Judge, Filed June 18, 2009), attached Official Slipsheet Opinion at 7 (Interrogatories which inquired into types of Damages, and into types and costs of Repairs held relevant where stated legal standard of Insurance Coverage was manifestation of the Property Damage).

    An alternative measure of when the Property Damage first Occurred is when the injury happens, not when someone sees it.  As in the case of "'cracks in the walls and ceilings'" of a home in Texas that were "allegedly caused by the faulty foundation" at issue in Download Wilshire Insurance Co. v. RJT Construction, LLC (5th Cir. Opinion Filed August 26, 2009), attached Official Slipsheet Opinion at 3-4, which were the alleged Property Damage and "not merely a warning of prior undiscovered damage," so the chemical degrading of other work caused by the fumes of Chinese Drywall is arguably the Property Damage itself and not merely a warning of prior undiscovered damage, either.

    

Calling All Mediators: Help Lenders, Borrowers in Foreclosure Mediations, Avoid Evictions.

    A Task Force assembled by the Supreme Court of Florida recently recommended that all of Florida's Trial Courts adopt a policy to require Mediations in Foreclosure Cases.  This is part of an effort to avoid evicting people from their homes whenever eviction can be avoided by mutual agreement between the Lender-Plaintiff and the Borrower-Defendant in the Foreclosure Case.  Report of the Florida Supreme Court Task Force on Residential Mortgage Foreclosure Cases, August 17, 2009:  Download Filed_08-17-2009_Foreclosure_Final_Report.  Foreclosure Mediations may be ordered in Foreclosure Cases, but Mediator participation at greatly reduced rates is voluntary.

    This policy is already in effect in many if not all Florida Circuit Courts.  Mediators who are willing to volunteer their time and services in this effort in the Ninth Circuit in the Orlando, Florida area only have to link to the Orange County (Florida) Bar Association here to volunteer.

    Volunteer Mediators in the Seminole County, Florida area may send their resume, a copy of their Mediator Certificate, and a cover letter to:

Seminole County Circuit Court

Mediation Department

301 N. Park Avenue

Sanford, FL  32771

Re:  Seminole County Fixed Fee Foreclosure Mediation Panel.

     If there is a program of Foreclosure Mediation in your jurisdiction, and if you are a Certified Mediator, please consider volunteering your time and services, too.

    If there is no program yet in your jurisdiction, please consider starting one.  Then be among the first volunteer Mediators in the Mediation Foreclosure program in your Court.  Without you, it cannot be done nearly as well.

To rephrase an insight penned by Albert Camus:

This may be a world in which people are evicted from their homes.  We may not be able to do anything about that.  But we can lessen the number of people who are evicted from their homes.  If you do not help in this effort, who will?

An identical call to Mediators is posted on this same date on Insurance Claims and Bad Faith Law Blog at www.insuranceclaimsbadfaith.typepad.com.

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"Do Overs" Do Not Avoid Accruing Prejudgment Interest!

   Prejudgment interest on a loss payable under a First-Party Insurance Policy like a Homeowners Policy is governed by this general rule:  Prejudgment interest on the loss is recoverable from the date payment is due under the provisions of the Insurance Policy, with  one well-known exception.  The exception applies once the First-Party Insurance Company denies all Coverage.  Once it has denied all Coverage, the First-Party Insurance Company is treated by Insurance Law as though it had affirmatively waived the Policy's provision governing deferred payment.  Thereafter, any payment of the loss by the First-Party Insurance Company attracts Prejudgment Interest accruing from the Date of the Loss.

    In Download North Pointe Insurance Co. v. Tomas (Fla. 3d DCA Opinion Filed August 26, 2009), Mr. and Mrs. Tomas claimed Homeowners Insurance Coverage under their Homeowners Policy with North Pointe for a replacement of their marble kitchen floor.  North Pointe denied all Coverage based on an Exclusion.  Mr. and Mrs. Tomas "filed a petition to compel appraisal under the terms of the homeowners' policy....  North Pointe withdrew its previous denial of the claim, admitting coverage ...."  Download North Pointe Insurance Co. v. Tomas (Fla. 3d DCA Opinion Filed August 26, 2009), attached Official Slipsheet Opinion at 2.  The matter went to Appraisal, and a month after North Pointe paid the claim, "an appraisal award was entered in the amount of $115,899.52, including prejudgment interest from the date of the loss."  Id.

    The Florida Appellate Court recited the prevailing law which is summarized at the beginning of this post.  Download North Pointe Insurance Co. v. Tomas (Fla. 3d DCA Opinion Filed August 26, 2009) at 3.  The conclusion was not hard for the Appellate Court thereafter to reach:

    North Point [sic] denied coverage for the claim.  Even though it later agreed to appraisal and paid the appraisal award, it is deemed to have waived the policy provision allowing deferred payment and is responsible for prejudgment interest from the date of the loss.

Download North Pointe Insurance Co. v. Tomas (Fla. 3d DCA Opinion Filed August 26, 2009) at 4.

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Contentious Contention Interrogatories Modified, Only Then Compelled.

    Contention Interrogatories "seek all facts that support a particular contention."  When modified "to seek 'the material or principal facts' instead of 'all facts'" they may be appropriate for a Motion to Compel.  See Download Mancini v. Insurance Corporation of New York (S.D. Cal. Order of Stormes, United States Magistrate Judge, Filed June 18, 2009)(modifying otherwise potentially impermissible "contention interrogatories" accordingly and, as modified, granting Motion to Compel "these interrogatories as modified," reasoning that "[w]hile contention interrogatories are proper, they can impose a large burden.  Contention interrogatories are often overly broad and unduly burdensome when they require a party to state 'every fact' or 'all facts' supporting identified allegations or defenses."), attached Official Slipsheet Opinion at 4-5.

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