Claims And Issues

"THE CONSENSUS WAS" IGNORANT RE: AFGHAN COLLAPSE AND TALIBAN TAKEOVER.

The consensus was that the Afghan Security Forces and the Afghan Government would not collapse in 11 days.  This is what President Joe Biden said earlier in the afternoon on the day these words are written, Friday, August 20, 2021.

          Either this is true or it is not.  It cannot be both and it cannot be a little bit of each.  It is either all one, or all the other.

          But before we get to whether it is true or false, how is it an excuse for delayed response to the need to evacuate?

          I hesitated a long time before I wrote this column.  I do not want to give ammunition to those who seek to do harm to the Biden Administration.  The Biden Administration is a breath of fresh air after the former guy.  Before now, they have shown an ability to pull rabbits out of a hat, they have been so successful in my judgment.

          So what explains this apparent failure to get people out of harm's way?  We are not talking about 11 days.  We are talking about three, four, or five months.

                   

          Not acting during that time is only part of the problem.                         

• We have reports about the Department of State sending EMails to people in Afghanistan telling them to show up at the Kabul airport, but after these people risk life and limb to get to the airport passing through territory and checkpoints controlled by the Taliban, no-one is at the airport who will let them in and they are turned away.
•   Update And a Repeat:  President Biden told George Stephanopoulos of ABC News "that chaos was in fact always inevitable."   If this was known, why then was it not planned for?
• We have other reports of French and British military and police units rescuing their nationals by going out beyond the airport perimeter, finding the people, and successfully bringing them back to the airport to be evacuated. What is stopping the American military from doing the same thing?
•   Update:  The Pentagon reported that the United States military does not have the capacity to extract people from downtown Kabul like the French and the British.  This report may have been meant as a distraction for security purposes.  See the Update immediately below.
•   Update:  U.S. helicopters under the command of various agencies including the Department of Defense and the Central Intelligence Agency are operating like the French and the British to travel to downtown Kabul and to other parts of Afghanistan, piek up evacuees, and return to the Kabel airport for eventual evacuation.
• Worst of all, perhaps, we have reports of concerned private citizens in the U.S. contacting sources, raising money, and chartering aircraft to get their Afghan friends and former colleagues out of Afghanistan. Their conduct is inspirational, but why do they have to do it?
• Doesn't the U.S. Government know how to evacuate people?
• By rights, shouldn't it be the one to do them? What is "American exceptionalism" all about, if not that? 

If it is true that the consensus was that the Afghan Security Forces and the Afghan Government would not "collapse" so soon:  How was this the consensus view in the face of the facts? 

• FACT: The U.S.-built and U.S.-funded Afghan Government was incurably corrupt.  Few Afghans, and I mean very few, were willing to die for it.
• FACT: The U.S.-funded and U.S.-equipped Afghan Security Forces -- army, air force, and police -- were mostly unwilling to fight and die for the Afghan Government.  Some units were special.  In the end, they were nowhere near enough to stop the Taliban takeover.
• FACT: Reports are clear that there were rumors and hard evidence available that local officials and local commanders were cutting their own private deals with the Taliban.  The deals were that the Taliban would not kill them, and the local officials and commanders would not fight the Taliban.  With many rumors and a lot of hard evidence, why did the "consensus" fail to reflect them?  And why did the Administration fail to learn the truth?

If it is false that the consensus was that the Afghan Security Forces and the Afghan Government would not "collapse" so soon:  Why then would the U.S. Government be pretending otherwise?

          Why, indeed?

•   Update:  Unnamed "aides" of President Biden reportedly echo his view that Americans do not care about what is happening to people in the Taliban chaos of Afghanistan, so long as Americans are not the ones being injured and killed.  Well, of course they do.  They obviously do not know how to handle the current situation.  All they know is what they call "the bigger picture."  By that they mean the old, discredited failure of so-called "Centrists" who are more arrogant than competent, more failure than flexible.  If they were boxers -- a thought which makes many of them shudder -- they would be caught flat-footed.  They do not know how to get out of the way.

 

PHOTOS:    1.  Afghans with Afghan flag face Taliban fighters with guns in Kabul.  (Victor J. Blue / New York Times).

                    2.  (Jim Huyelbroek/New York Times).

Updated to reflect recent developments.

Please read the disclaimer.  ©2021 Dennis J. Wall.  All rights reserved.    

"THE CONSENSUS WAS" IGNORANT RE: AFGHAN CORRUPTION AND TALIBAN TAKEOVER.

 

The consensus was that the Afghan Security Forces and the Afghan Government would not collapse in 11 days.  This is what President Joe Biden said earlier in the afternoon on the day these words are written, Friday, August 20, 2021.

          Either this is true or it is not.  It cannot be both and it cannot be a little bit of each.  It is either all one, or all the other.

          But before we get to whether it is true or false, how is it an excuse for delayed response to the need to evacuate?

          I hesitated a long time before I wrote this column.  I do not want to give ammunition to those who seek to do harm to the Biden Administration.  The Biden Administration is a breath of fresh air after the former guy.  Before now, they have shown an ability to pull rabbits out of a hat, they have been so successful in my judgment.

          So what explains this apparent failure to get people out of harm's way?  We are not talking about 11 days.  We are talking about three, four, or five months.

                   

 

          Not acting during that time is only part of the problem.                         

• We have reports about the Department of State sending EMails to people in Afghanistan telling them to show up at the Kabul airport, but after these people risk life and limb to get to the airport passing through territory and checkpoints controlled by the Taliban, no-one is at the airport who will let them in and they are turned away.
• We have other reports of French and British military and police units rescuing their nationals by going out beyond the airport perimeter, finding the people, and successfully bringing them back to the airport to be evacuated. What is stopping the American military from doing the same thing?
• Worst of all, perhaps, we have reports of concerned private citizens in the U.S. contacting sources, raising money, and chartering aircraft to get their Afghan friends and former colleagues out of Afghanistan. Their conduct is inspirational, but why do they have to do it?
• Doesn't the U.S. Government know how to evacuate people?
• By rights, shouldn't it be the one to do them? What is "American exceptionalism" all about, if not that? 

If it is true that the consensus was that the Afghan Security Forces and the Afghan Government would not "collapse" so soon:  How was this the consensus view in the face of the facts? 

• FACT: The U.S.-built and U.S.-funded Afghan Government was incurably corrupt.  Few Afghans, and I mean very few, were willing to die for it.
• FACT: The U.S.-funded and U.S.-equipped Afghan Security Forces -- army, air force, and police -- were mostly unwilling to fight and die for the Afghan Government.  Some units were special.  In the end, they were nowhere near enough to stop the Taliban takeover.
• FACT: Reports are clear that there were rumors and hard evidence available that local officials and local commanders were cutting their own private deals with the Taliban.  The deals were that the Taliban would not kill them, and the local officials and commanders would not fight the Taliban.  With many rumors and a lot of hard evidence, why did the "consensus" fail to reflect them?  And why did the Administration fail to learn the truth?

If it is false that the consensus was that the Afghan Security Forces and the Afghan Government would not "collapse" so soon:  Why then would the U.S. Government be pretending otherwise?

          Why, indeed?

 

PHOTOS:    1.  Afghans with Afghan flag face Taliban fighters with guns in Kabul.  (Victor J. Blue / New York Times).

                    2.  (Jim Huyelbroek/New York Times).

                    3.  Taliban taking a rest last year in Afghanistan.  (Jim Huybroek/New York Times).

Please read the disclaimer.  ©2021 Dennis J. Wall.  All rights reserved.    

"LET'S MAKE A DEAL" WITH THE TALIBAN.

Mike Pompeo and Mullah Barradar, leader of the Taliban who was released from jail in order to make an agreement with the Americans in 2020.  (Patrick Semansky/Associated Press)

This is Part 3 in a series of articles looking at the Afghanistan "collapse" which is not really a collapse.  It is a contract.

The former guy and secretary of state Mike Pompeo negotiated a deal with the Taliban in Doha, Qatar in 2020.

          This was the deal:  The Taliban would not kill Americans in Afghanistan and the Americans would withdraw from Afghanistan. 

          Unfortunately, very unfortunately, they famously excluded the Afghan Government (and its Security Forces) from their negotiations.  Being Afghans, the ones who were excluded made their own deals with the Taliban as a result.  The deals made by local officials of the Afghan Government, and local commanders of the army and the police, called for the Taliban not to kill them in exchange for withdrawing from power.

          So, they made little deals that mirrored the big deal with the Taliban.

          When the time came in early August of 2021, the little deals came due.  The Afghan Government officials and the Afghan army and police gave the Taliban the keys to their office buildings, equipment, and bases, and then they left power to the Taliban.  This came clear -- if it wasn't clear before -- with some remarkable reporting which is repeated here because it is so good:  See  Susannah George, Afghanistan's Military Collapse:  Illicit Deals and Mass Desertions, Washington Post online Sunday, August 15, 2021.

          That's the deal.  That's why the sudden "collapse" of Afghanistan is not a collapse at all.  It was planned last year.  It is not a collapse, it is a contract.

          The end of this Part 3 is once again the same as the end of Part 1 and the same as the end of Part 2:   The truth is different from what we were actually told.  Based on what we already know now, the difference determined the outcome.  There is more to come.

Please Read the Disclaimer.  ©2021 Dennis J. Wall.  All rights reserved.

AFGHANISTAN: WHAT SEEMED TO BE A COLLAPSE WAS A CONTRACT.

Captured Armored Personnel Carrier in Kabul.  (Jim Huylebroek/New York Times)

Afghanistan has fallen.  Or at least the Taliban have retaken control of Afghanistan.  Lots of commentators particularly in the media write that it was inevitable for the past 20 years that this would happen as soon as the U.S. withdrew.  They say they knew it all along.

I don't recall them saying that at all during the last 20 years.  I could be wrong.  I do recall them saying some things but it wasn't that.

New reporting also begins to provide some details about the deals that the Taliban made with the former guy and his secretary of state Mike Pompeo in 2020.  The former guy was notorious for making deals.  The new reporting also begins to provide some information about the deals that the Taliban made after that with Afghan officials.  See  Susannah George, Afghanistan's Military Collapse:  Illicit Deals and Mass Desertions, Washington Post online Sunday, August 15, 2021; Susannah George and Ezzatullah Mehrdad, Hundreds of Afghan Forces Surrender in Kunduz as Taliban Consolidates Hold on Country's North, Washington post online, Wednesday, August 11, 2021.

Making deals is what the Afghans do and have done for a long time.  The Afghans were cut out of deals between the Taliban and those in control of the U.S. government in 2020, which left the Afghans on their own against the Taliban.

And left whatever happened next to the next U.S. president to clean up.

Immediately after the deals between the Taliban and the people in control of the U.S. government in 2020, Afghans began making their own deals with the Taliban to literally turn over the keys as soon as the Taliban showed up.

What seemed to be a collapse was a contract.

But more about the deals later.

This is the first of four parts, one for the time of each person who was elected President of the United States in the past 21 years.

George W. Bush.  Then Barack Obama, followed by the former guy, and finally Joe Biden.

First up, George W. Bush.

They told us then that they were not nation-building.  George W. Bush, Dick Cheney, Donald Rumsfeld, et al.

For not the first time, the people in charge of the American Government lied to us.  We know now that they were nation-building.  The truth is that they were trying to build a democracy in Afghanistan that looked like the U.S.

The thing is, we knew that at the time.  Or at least that is what I recall was reported at the time.

I do not recall, however, it being reported at that time -- or at any other time during the past 20 years before now -- that the Afghanistan built by the U.S. would "collapse" once the U.S. withdrew.

Either the Bush people knew that Afghanistan would collapse as soon as the U.S. withdrew, or they knew that the regime they installed was incurably corrupt.  Either way, the Bush people didn't tell us those things.  They told us instead that their Afghanistan was coming together very nicely.

For its part, the media at the time reported that the regime in Afghanistan was incredibly corrupt.  I do not recall that they reported that the regime in Afghanistan would "collapse" the minute the last American left.

The truth is different.  Based on what we already know now, the difference determined the outcome.  There is more to come.

Please Read the Disclaimer.  ©2021 Dennis J. Wall.  All rights reserved.

Prompt: "I'm only staying sane during the pandemic because ..."

I'm staying sane during the pandemic because I remember how I got my first book contract. I wrote a letter in response to a call for topics. The publisher called me and asked me to write the book.

That was 37 years ago. I have been blessed that my contract includes writing supplements every year. And so every year since I have written supplements, including this year.  I am working on them now. 

That is how I'm staying sane. I'm staying sane because I can work like I have worked for years and because I recognize how blessed I am to be able to say that.

Please read the disclaimer. ©2020 Dennis J. Wall.  All rights reserved.

This is what they look like.

This is a photograph of the Republican head of the Wisconsin State Assembly.  He provided this photograph.

    His name is Robin Vos.  He is one of the powerful Republicans who forced people to expose themselves to Covid-19 in order to vote.  Except that he himself loaded up to vote with a mask, gloves, and a hospital gown.  He protected himself to vote with more Personal Protective Equipment than many healthcare providers have in hospitals.  (Which means, of course, that a healthcare worker had to do without the equipment Mr. Vos was wearing himself.)

    This is what they look like.  Here now is Robin Vos, in a photograph provided by Robin Vos:

(Photo:  Courtesy of Robin Vos in the Milwaukee Journal-Sentinel)

And think of this too:  Someone told him this would be a good look to share with Wisconsin and the world.

Please read the disclaimer. ©2020 Dennis J. Wall.  All rights reserved.

THESE ARE YOUR FEDERAL CONTRACTORS NOW.

Felipe Gomez Alonso was eight years old when he died.  He died in the custody of the United States.

After Border Patrol agents looked him over and found no cause to be alarmed.  Until later.  Until they heard or saw Felipe coughing.  And the agents say his eyes then glossed over also.

Then they sent Felipe to a Regional Medical Center that contracts with the Federal Government.  The care Felipe received there is reported in today's newspapers.  The newspaper accounts are based on what the Federal Government itself says happened next to this eight-year-old boy.  Recall that the child was in their custody before, after, and during the entire time they sent him to the Regional Medical Center:

    Hospital workers diagnosed Felipe with a cold and gave him Tylenol, but held him for observation after determining that he had a 103-degree fever. They released him with prescriptions for antibiotics and Ibuprofen that afternoon.

Miriam Jordan, Migrant Boy Died After 6 Days Adrift in Crowded U.S. System, N.Y. Times Print Edition, Dec. 27, 2018, at A1 (emphasis added), published online under the headline, 'A Breaking Point':  Second Child's Death Prompts New Procedures for Border Agency.

So the Federal contractor, the Regional Medical Center or its employees, "determined" that the child had a 103-degree fever.

And then they released him back to the Border Patrol.  Where the boy was sent to another border facility that had no provisions for a child.  Or for illness, for that matter.

What is the name of the Federal contractor?  It is reported in the linked article and you could look it up if you want to know it.

The point here is that these are your Federal contractors now.  That message cannot, should not be obscured by the name of one Federal contractor.

If you are reading this, you are also paying for the Federal contractor.  And you are paying for the current Federal Government too.

So, soon you will undoubtedly be paying for a settlement for the death of this poor man's child.

And for the settlements of many more deaths just like his.

Please Read The Disclaimer.  ©2018 Dennis J. Wall.  All Rights Reserved.

"They're not MY children." "But they're SOMEBODY'S children, Mr. Potter."

HUD is trying to change the employment contract it has with federal employees, including threats to evict the employees' union from space guaranteed by the contract, space which HUD itself negotiated.  Joe Davidson, "Social Security, HUD Act on Trump's Orders in Move to Emasculate Unions" (Washington Post Online, Friday, June 15, 2018).

The American Federation of Government Employees is the federal employees' union.  They are protesting conditions at one prison where we have a publicly available story.  There are many prisons, but this is a story of one of them.  The prison is receiving 1,000+ immigrant detainees but that is not the reason that the prison workers are protesting.  Rather, the prison workers are protesting because the prisons were subjected to budget cuts in the first place and now the prisons are receiving many immigrant detainees but the workers are not receiving any additional funding, no instructions,  and not one additional medical staff to treat any of the additional inmates.  Paloma Esquivel, "Federal Prison Workers Protest in Victorville, Saying the Transfer of Detainees Creates a Dangerous Situation" (Los Angeles Times Online, posted Friday, June 15, 2018).

It is a good bet that federal workers are also protesting the detention of children in prisons and in tents for that matter.  We do not need a published report to tell us that, in my judgment, nor do we need a published report to draw us a picture of how the current regime is reacting.

It is my understanding that HUD has custody of the immigrant children taken from their parents.  This would help explain why HUD is trying to evict the AFG from space the federal union occupies under the current federal employment contract, an agreement with the federal government that has months to go.

If you believe in the sanctity of contract, this would be a good time to say so.  The claims and issues here keep on coming.

Please Read The Disclaimer.  ©2018 Dennis J. Wall.  All Rights Reserved.

DISCOVERY BEHIND A DEFENSE IN ALABAMA.

In Hibbett Patient Care, LLC v. Pharmacists Mut. Ins. Co., No. CA 16–00231–WS–C, 2017 WL 4817992, at *1 (S.D. Ala. January 26, 2017) (Cassady, USMJ), the plaintiffs "bring three causes of action against PMIC, which include breach of contract, bad faith failure to investigate, and bad faith denial of a claim."  The plaintiffs requested production of all writings concerning a certain lawyer's evaluation of claims for an insurance company, after the defendant insurance company apparently raised advice of this counsel as a defense.

The Magistrate Judge granted production but limited it to the case before the Court:

Request for Production No. 17

    Plaintiffs’ Request for Production No. 17 asks Defendant to “produce all writings pertinent to [the lawyer in question] or his law firm’s evaluation of any Pharmacists Mutual claim” from the past ten years. (Doc. 36–1, ¶ 17).

Hibbett Patient Care, LLC v. Pharmacists Mut. Ins. Co., No. CA 16–00231–WS–C, 2017 WL 4817992, at *5 (S.D. Ala. January 26, 2017) (Cassady, USMJ).

          The Court's well-reasoned ruling on production in response to this request for production, is well worth quoting:

Accordingly, the motion to compel is GRANTED to the extent that Defendant shall produce for inspection all writings pertinent to [the  lawyer's] or his law firm's evaluation of claims involving Alabama insureds that were presented to PMIC within five years of the date of the evaluation that is relevant to this action. In addition, the evaluations and other writings responsive to this request are also limited to those involving policies of insurance that may be characterized as similar to the policy issued to the Plaintiffs.

    Therefore, the motion to compel with regard to Request for Production No. 17 is GRANTED IN PART AND DENIED IN PART. The production of information is limited to similar policies of insurance written to Alabama residents that were presented within five years prior to the evaluation by [the lawyer] that is relevant to this action.

Hibbett Patient Care, LLC v. Pharmacists Mut. Ins. Co., No. CA 16–00231–WS–C, 2017 WL 4817992, at *6 (S.D. Ala. January 26, 2017) (Cassady, USMJ).

Please Read The Disclaimer.  ©2017 by Dennis J. Wall.  All Rights Reserved.

KICKBACKS ARE GOOD AS LONG AS "FILED RATES," BUT ....

.... NOT a defense to claims NOT based on filed rates.

Another Federal Judge has ruled that so long as the defendant alleges that it included kickbacks in filed rates, then claims related to kickbacks are barred in Federal Courts.  Alpert v. Nationstar Mortgage LLC, 243 F. Supp. 3d 1176 (W.D. Wash. 2017) (applying Washington State's filed rate doctrine in case of first impression to insurance company's motion to dismiss mortgagor's complaint actually alleging that kickbacks were included in force-placed insurance premiums charged to mortgagor).

However, even in these cases Federal Judges also hold that other claims which are not based on kickbacks can still be "plausible" and so withstand a motion to dismiss alleging the filed-rate-doctrine.  For example, in the Nationstar Mortgage case itself the same Federal Judge held that the mortgagor's complaint stated a claim against a mortgage servicer for breach of contract and for alleged Washington State Consumer Protection Act (CPA) violations.

Please Read The Disclaimer.  ©2017 by Dennis J. Wall.  All Rights Reserved.

Related articles

Video Displays "Lender Force-placed Insurance Practices".

"IS YOUR GENERATOR WORKING?"

The first installment, "They Called But No-One Came: Liability Insurance Coverage Questions": Monday, 09.18.17. This is the second of three installments. This installment will address liability insurance coverage questions regarding the Florida power company. In the final installment, we will address liability insurance coverage questions concerning the Florida nursing home.

Here is the story behind our insurance coverage questions:

Eight people died in a nursing home in Hollywood, Florida during Hurricane Irma. The nursing home's air conditioning went out. It got hot. Very hot.

Eight people died from the heat.

A number of people and corporations played a role in this story. We addressed liability insurance coverage questions regarding the Florida governor on Monday, and today we address some liability insurance coverage questions surrounding the Florida power company. Our last installment will address liability insurance coverage questions involving the Florida nursing home. Their continuing stories will be featured here throughout the coming week, along with their related liability insurance coverage questions.

What follows is from the reporting so far on what happened.  The reporting is not complete even now. There are competing stories on lots of points. As yet, only some things have been finalized, enough to see the outlines of some important liability insurance coverage questions.

The focus of this series of articles is not on whether there may be any good claims of potential liability, but on whether there are claims to potential liability insurance coverage.

1. The Florida power company: Questions of Liability.

Eight people died in a nursing home in Florida when the air conditioning went out. "Survival also depended on phone tag between nursing-home administrators, state officials and utility providers." Aaron Davis, Katie Zezima & Mark Berman, "Officials at Nursing Home Where 8 Died Say They Called Florida Gov. Rick Scott 3 Times For Help" (Washington Post via Chicago Tribune posted on Friday, September 15, 2017), also available at http://www.chicagotribune.com/news/nationworld/ct-florida-nursing-home-deaths-rick-scott-20170915-story.html.

The nursing home called the power company when a transformer blew out and the air conditioning stopped. This was the first of several calls the Florida nursing home says it made to the Florida power company. "Report: Before Deaths, Nursing Home Called Rick Scott's Emergency Number Three Times, To No Avail" (Tampa Bay Times staff, posted online on Friday, September 15, 2017), also available at http://www.tampabay.com/news/politics/stateroundup/report-nursing-home-called-rick-scotts-emergency-number-three-times-to-no/2337665.

The Washington Post report via the Chicago Tribune linked above reflects that "[t]he nursing home provided ticket numbers for service requests that it had placed with" the Florida power company. "The Post was able to confirm two of the requests using state records and the utility's website." Id.

The same reporting further reveals what was not widely reported previously: The nursing home personnel were not the only ones who called the Florida power company. At least one relative of a nursing home resident, perhaps joined by others, "repeatedly called" the power company. "I told [the power company] the generators were going to give up soon. And it happened." Id. [Emphasis added.]

Finally, people also called 911, more than once, before anyone died. "'Red Flag' Calls Signaled Post-Irma Deaths at Nursing Home" (Associated Press copyrighted story published online in The New York Times on Saturday, September 16, 2017), also accessible at https://www.nytimes.com/aponline/2017/09/16/us/ap-us-hurricane-irma-nursing-home-deaths-.html.

The Associated Press story which has just been hyperlinked above, summarizes the calls to the Florida power company to restore power for the air conditioning in the sweltering heat: "The [nursing home] said the hurricane knocked out a transformer that powered the air conditioning. The center said in a detailed timeline of events released Friday that it repeatedly was told by [the Florida power company] that it would fix the transformer, but the utility did not show up until Wednesday morning, hours after the first patients began having emergencies."

For its part, before it stopped issuing statements or answering questions the Florida power company said that the nursing home "was supposed to have an operational generator."

As noted, the reporting is not complete even now. However, not one report has recorded that the power company ever asked this question to anyone at the nursing home:

Is your generator working?

The power company said in a statement using the passive voice, that "'other critical facilities were identified as higher priorities.'" Tampa Bay Times, supra.

"The utility refused to answer any specific questions about the nursing home case." Associated Press, supra. While the Florida power company conveyed "'our deepest sympathies,'" the power company "did not answer questions regarding the calls the nursing home said were made." Washington Post via Chicago Tribune, supra.

"'At the time this incident occurred, you have to remember when the first patients were dying, there were 150 nursing homes across the state that did not have power.'" Jim Defede, CBS4News, Miami, quoted in Tampa Bay Times, supra.

 

2. Liability Insurance Coverage Questions and the Florida power company.

The questions that follow are not all the questions that can or will be raised concerning the Florida power company's liability insurance coverages. Some of these questions may not apply. Answers, if any, may be forthcoming in newly filed lawsuits. See Tampa Bay Times, supra ("On Friday, a Miami law firm filed a complaint against the Hollywood facility ....); Associated Press, supra (reporting that a family member of a surviving resident "hired an attorney after her 93-year-old mother became severely dehydrated on Wednesday.").

Depending on the type of policy involved, including whether it is a "claims made and reported" policy or an "occurrence-based" policy, the foremost question of liability insurance coverage regarding the power company may involve this one:

"Occurrence": Was there an accident neither expected nor intended from the standpoint of the insured, in this instance, neither expected nor intended from the standpoint of the Florida power company?

Like unto it, the question arises in the context of Directors and Officers coverage if any: Is there any covered conduct at issue on the part of any of the power company's directors and officers? Or is such coverage excluded by the availability of liability insurance coverage, if any, under other liability insurance policies available to the directors and officers?

Is there potential liability of the Florida power company here only for breach of contract, which is ordinarily excluded under standard liability insurance policies? Or is the power company's potential liability the kind that it would have even if there had been no contract?

Finally, now a very significant question from the outset: the number of occurrences, if any. Was there one or were there 8 or more "occurrences," if any? Was there one occurrence (if any) because for example there was one practice and procedure at the power company which resulted in the damages that might be complained of here? Or were there 8 occurrences (again, if any) because 8 people died? Or if there were any occurrences under the insurance policies at issue, were there more than 8, counting all the people who were injured but who did not die?

Time will tell, and over time the answers to liability insurance coverage questions like these will likely be given by the Florida courts.

Please Read The Disclaimer. ©2017 by Dennis J. Wall. All Rights Reserved.

 

BREACH OF A CONDITION BARS "BAD-FAITH" INADEQUATE DEFENSE CLAIM …

But breach of which condition?

 

In Doe v. Onebeacon Am. Ins. Co., 639 F. App'x 627 (11th Cir. 2016), a panel of the Eleventh Circuit was confronted with many issues of Florida law surrounding a liability carrier's duty to defend and an insured's settlement without the carrier's consent.  The panel side-stepped all of those issues.

The Court held both that the insured breached a policy condition and also that there was insufficient evidence that the carrier provided a legally inadequate defense in the underlying case.  For either reason, the claim of a "bad-faith" or legally inadequate defense could not stand.  (In Florida, an inadequate defense is a breach of contract and cannot really be called "bad faith," although given the outcome in this case, the panel never had to reach this or any similar issue.)

It is difficult to determine from this brief opinion which condition the Eleventh Circuit panel was addressing.  The panel appeared to equate the policy prohibition on the insured's settlement without the carrier's consent, with the insured's duty to cooperate:

    As a matter of law, the insured—at the time it settled the case in advance of trial—breached its duty to cooperate with its insurer in the investigation and defense of the underlying tort claim.  So, the insurer has no duty to indemnify the insured in this case.

Doe v. Onebeacon Am. Ins. Co., 639 F. App'x 627, 628 (11th Cir. 2016).

In the final analysis, it does not matter which condition the insured breached in this case.  It may have breached one of them or it may have breached both of them.  In any case, there was no coverage and so there was no claim here, the Eleventh Circuit effectively held.

Please Read The Disclaimer.  © by Dennis J. Wall.  All Rights Reserved.

E&O COVERAGE FOR MORTGAGE SERVICERS?

The first known case to address lender force-placed insurance practices in Orlando, Florida also reveals the answers to two important questions:  Why there is probably no E&O coverage for mortgage servicers in these LFPI cases, and what is the only fact in these cases that successfully supports a multitude of claims?

Here are some noteworthy facts behind the seminal decision in Sekula v. Residential Credit Solutions, Inc., No. 6:15-cv-2104-Orl-31KRS, 2016 WL 1559142, at *1 (M.D. Fla. April 18, 2016):

• The homeowners' mortgage was for $282,400.00.
• The mortgage servicer force-placed a policy for $485,900.00 at a premium -- to be paid in increments by the Sekulas as a part of their monthly mortgage payment -- of $10,544.00 per year.
• The homeowners put the replacement value of their home at $300,000.00 and obtained a different insurance policy in that amount with a far lower annual premium of $785.00.

These facts are noteworthy in this case because they did not affect the outcome.

The Court in this case was of the view that the mortgage servicer acted within the terms of the mortgage both by force-placing an insurance policy with limits much higher than the value of the home insured, and by force-placing an insurance premium in an amount that was 13 times greater than what the homeowners found for themselves.

The essential alleged fact was instead that the mortgage servicer allegedly "exceeded the authority provided in [the mortgage agreement] to force-place insurance" by inflating the premium that the homeowners had to pay by including the amount of kickbacks allegedly paid by the insurance carrier to the mortgage servicer.   Sekula v. Residential Credit Solutions, Inc., No. 6:15-cv-2104-Orl-31KRS, 2016 WL 1559142, at *3 (M.D. Fla. April 18, 2016).

That is the single most important fact in lender force-placed insurance practices cases filed across the United States:  The lender or its agent the mortgage servicer imposed unauthorized charges and hid them in the force-placed insurance premium, not that the lender or servicer charged a lot of money.  That essential fact has successfully supported a multitude of claims against lenders' and servicers' motions to dismiss.  In this case, that fact allegation successfully supported the homeowners' claim for breach of contract.

Similarly, "an undisclosed kickback would be a violation of that implied duty [of good faith]."   Sekula v. Residential Credit Solutions, Inc., No. 6:15-cv-2104-Orl-31KRS, 2016 WL 1559142, at *4 (M.D. Fla. April 18, 2016).  For this reason, the homeowners' alleged claim of a breach of the implied covenant of good faith also successfully withstood the servicer's motion to dismiss in the Sekula case.

The nature of the successfully alleged claims in this seminal case reveals that there are strong arguments against E&O coverage for mortgage servicers on account of their conduct in LFPI practices.  Mortgage servicers simply are not held liable because they charged too much, but instead they have been held subject to liability only when they are alleged to have force-placed unauthorized charges.

Please Read The Disclaimer.  ©2016 by Dennis J. Wall, author of "Lender Force-Placed Insurance Practices" (American Bar Association 2015).  All rights reserved.

Related articles

An Insurance Policy That Replaces Force-placed Insurance Policies & Practices?

No "Lender Force-Placed Insurance Practices" Cases Have Gone to Trial.

STANDARD MORTGAGE CLAUSE A CONTRACT BETWEEN HOMEOWNER'S INSURER AND MORTGAGEE?

  

 

Image Copyright Dennis J. Wall.

I did not know that there is apparently support in more than one jurisdiction for the proposition that the standard mortgage clause is a separate and distinct contract between the homeowner's insurance company and the homeowner's mortgagee.  My quick and earnest research disclosed that courts in other States say the same thing that I read to this effect in the case of Avila v. Citimortgage, Inc., 801 F.3d 777, 780 n.2 (7th Cir. 2015)(case involved Illinois substantive law).

That came as a surprise.  I always thought that in order to form a contract the law requires two contracting parties.  Here one of the contracting parties seemingly has no interest in an insurance contract for which that party paid a premium, i.e., gave consideration for the contract.  That missing contracting party in the case of the standard-mortgage-clause-as-separate-contract situation is of course the policyholder who is here also the homeowner with a mortgage.

So, the mortgagee which gave no consideration to the insurance company is a party to a contract with the insurance company even though no consideration passed between them?

I can understand if the courts label the mortgagee as an "incidental beneficiary" capable of enforcing the contract under a standard mortgage clause.  But is it correct as a matter of contract law to say in this situation bereft of consideration, that there is a separate and independent contract aside from the insurance policy?

And if there is such a separate and independent contract, what is this agreement all about other than the payment of insurance proceeds to the mortgagee under an insurance contract paid for by someone else, namely, the homeowner?

This whole thing bears a closer look.  Parenthetically, when Judge Sykes wrote the opinion upholding Mr. Avila's complaint for breach of contract against Citi in this case, she carefully pointed out that "[w]e do not, of course, express any view on the ultimate merits of Avila's claim."  Then she proceeded to suggest at least three defenses potentially available to Citi on the ultimate merits of Avila's claim.

Apparently, Judge Sykes was under the impression that Citi and its lawyers needed her help, perhaps thinking that they might overlook those defenses if she did not point them out.

Judge Sykes did not offer any advice at all to Mr. Avila or his lawyers, however.

Please Read The Disclaimer.  ©2015 by Dennis J. Wall, author of "Lender Force-Placed Insurance Practices" (American Bar Association 2015).  All rights reserved.

WHEN DISCLOSURE IS NOT ENOUGH.

               In many lender force-placed insurance cases, lenders and mortgage servicers argue that they “disclosed” their unearned commissions, and that as a result homeowners cannot sue them for breach of the mortgage contracts.  This argument was addressed in the case of Longest v. Green Tree Servicing LLC, No. 2:14-cv-08150-CAS (RZx), 2015 WL 546095, *4-*5 (C.D. Cal. February 9, 2015).

               The Court rejected this argument in that case, following a long line of holdings in similar cases.  Just because the contract documents may have authorized the defendants to force-place insurance does not mean that the contract documents authorized the defendants to force-place charges for “unauthorized kickbacks” as a part of the insurance premiums.  [Emphasis added.]

Please Read The Disclaimer.  ©2015 by Dennis J. Wall.  All Rights Reserved.  No Claim to Original U.S. Government Works.

Related articles

No "Lender Force-Placed Insurance Practices" Cases Have Gone to Trial.

FTC and CFPB settle charges against Green Tree Servicing

"THROWN OUT OF COURT" IN INSURANCE COVERAGE DISPUTES TOO?

          The newfound rage in corporate contracts is the mandatory arbitration provision.  In basic and simple terms, this provision mandates that any disputes related to, arising out of or concerning the contract must be arbitrated and not litigated.

          The purchaser gives up the right to class action litigation.

          The purchaser also gives up the right to a jury trial in any dispute covered by the provision.

          A current five-person majority on the U.S. Supreme Court favors these provisions.  Corporations are being encouraged to insert these provisions into a variety of contracts.  The story is skillfully told by Lina Khan, How Corporate America Shut the Courthouse Doors to Average People" posted online at Bill Moyers & Company, previously published as "Thrown Out of Court" in the Washington Monthly.

          Will insurance companies and insurance contracts be far behind?

 

© 2014 by Dennis J. Wall.  All rights reserved.  No claim to original U.S. Government works.

Please Read The Disclaimer.

Related articles

Experts in Arbitration Unreviewable in Federal Appellate Court.

How Corporate America Shut the Courthouse Doors to Average People

Thrown Out of Court--How corporations became people you can't sue

NO COMMERCIAL BAD FAITH IN PHILADELPHIA INSURANCE BAD FAITH CASE.

          In a case against an insurance company for bad faith denial of a claim, a Federal Court in Philadelphia faced a claim alleged against an insurance company under Pennsylvania's Unfair Trade Practices and Consumer Protection Law, the Pennsylvania UTPCPL.  The Federal Court effectively extended the intentional conduct requirements of insurance bad faith causes of action under Pennsylvania law to commercial bad faith causes of action.

          The Court in that case held that a claim under the UTPCPL for 'commercial' bad faith does not reach denial of an insurance claim under an insurance contract, unless the denial is accompanied by more than simply a breach of the contract.    In line with established Pennsylvania law, a simple breach of contract may be actionable at Pennsylvania common law, see Post v. Liberty Mutual Group, Inc., 2014 WL 2777396 (E.D. Pa., June 17, 2014), but it is not actionable under the Pennsylvania UTPCPL any more than an outright claim for insurance bad faith is actionable under 42 Pa. C.S.L. § 8371, Pennsylvania's 'Insurance Bad Faith Statute,' which it is not. 

 

© 2014 by Dennis J. Wall.  All rights reserved.  No claim to original U.S. Government works.

Please Read The Disclaimer.

Related articles

Late Notice Coverage Defense: Recent Florida Cases, New York Law.

No Coverage, No Bad Faith Under Pennsylvania Law.

HOMEOWNER STATES COVERAGE CLAIMS UNDER FORCE-PLACED INSURANCE POLICY.

Federal Court denies Balboa Insurance Company's motion to dismiss for failure to state a claim.

           In a ground-breaking decision, a landowner's/homeowner's claims under a force-placed insurance policy will be allowed to proceed in Paulino v. Balboa Insurance Co., 2013 WL 4845919 (M.D. Fla. September 10, 2013).

          The plaintiff homeowner, Ms. Sagrada Paulino, alleged two claims:  Breach of contract and declaratory judgment.  The claims are "against Defendant Balboa Insurance Company related to a lender-placed policy of insurance.  Count I of the complaint alleges a breach of contract claim for Balboa's failure to pay damages related to loss and damage to the subject property arising from sinkhole activity, a covered loss."  Paulino v. Balboa Insurance Co., 2013 WL 4845919 *1  (M.D. Fla. September 10, 2013).

          Until now, a homeowner has had no recognized legal rights under a force-placed, lender-placed policy of insurance.  FPI is not substitute homeowner's insurance protecting the homeowner.  The interests protected by FPI are the interests of the lender exclusively.  The total premium for an FPI policy, however, is paid by the homeowner.

          Balboa accordingly argued that Ms. Paulino "does not have third-party standing to assert her breach of contract claim because the subject policy was placed with the lender."  Paulino v. Balboa Insurance Co., 2013 WL 4845919 *1 (M.D. Fla. September 10, 2013).  The Federal Court in this case denied Balboa's motion and ordered Balboa to file an answer within 14 days of the date of the Order, Paulino v. Balboa Insurance Co., 2013 WL 4845919 *2 (M.D. Fla. September 10, 2013), or by Tuesday, September 24, 2013.

          The Court also denied Balboa's motion to dismiss Paulino's second alleged claim, her declaratory judgment claim.  She based that claim on what the Court called "an actual controversy," contrary to Balboa's argument in favor of dismissal that there was no controversy and the declaratory claim was "subsumed by the breach of contract claim" according to Balboa.  Paulino v. Balboa Insurance Co., 2013 WL 4845919 *1 (M.D. Fla. September 10, 2013).  The "actual controversy" ripe for declaratory judgment is Paulino's alleged claim that Balboa should have "meaningfully consulted" with her "on the selection of the expert to perform subsidence testing and remediation recommendations."  Paulino v. Balboa Insurance Co., 2013 WL 4845919 *1 (M.D. Fla. September 10, 2013).

          The Court addressed this claim as raising a question for the Court to declare an answer, "is she bound by Balboa's expert to determine the extent of the damages? ...  This issue is not subsumed by the breach of contract claim," the Court held, "because it must be separately determined before the extent of any breach can be determined.  In other words, the extent of Balboa's obligation under the subject policy to meaningfully consult with Paulino in the selection of the expert is a separate issue from the issue of whether Balboa breached the subject policy by failing to pay damages."  Paulino v. Balboa Insurance Co., 2013 WL 4845919 *1 (M.D. Fla. September 10, 2013).

          The Paulino case bears close watching, I think.  I will be monitoring it from here on out.  Beyond September 24, 2013 when Balboa's answer is due to be filed, I have no doubt.

Please Read The Disclaimer.

NO COVERAGE, NO BREACH, NO BAD FAITH.

     In Lewis & Clark Bank v. Stewart Title Guar. Co., 2012 WL 2946717 (D. Or. July 17, 2012)(Acosta, U.S.M.J.), Download Lewis & Clark Bank v. Stewart Title Guaranty Co. (D. Or. Opinion and Order of USMJ by consent to jurisdiction, 07.17.12) PUBLIC ACCESS, a Federal District Court applied a rule similar in its consequences to the rule applied by Courts holding that where there is no Coverage, there can be no Bad Faith.

     In the Lewis & Clark Bank case, the Bank sued its Title Insurance Company for alleged Breach of Contract, and for Attorney's Fees.  The Bank filed a motion to amend its complaint to include a claim "to allege a claim for breach of the contractual duty of good faith and fair dealing in addition to" those alleged claims.  Lewis & Clark Bank v. Stewart Title Guar. Co., 2012 WL 2946717 *10 (D. Or. July 17, 2012).  [Emphasis added.]

     The Federal District Court viewed the alleged contractual duty of Good Faith and Fair Dealing under Oregon State law as potentially an independent claim of alleged Breach of Contract.  However, in this case the motion for leave to amend was denied as "futile".

    The reason the proposed amendment would be futile in this case, was that the contract breaches alleged and the damages claimed as a result of them, were identical, and the Court had already held that there was no Breach of Contract because the Title Insurance Company had performed its obligations under "the express provisions of the contract".  Following from that holding, the Court further held that "the proposed amendment is futile in that the Bank is unable to recover the lost profits based on a claim for breach of the covenant of good faith and fair dealing."  Lewis & Clark Bank v. Stewart Title Guar. Co., 2012 WL 2946717 *10 (D. Or. July 17, 2012).

 

The rule applied by Courts holding that where there is no Breach of Contract, there can be no Bad Faith, is examined in Third-Party Cases in Dennis J. Wall, "Litigation and Prevention of Insurer Bad Faith" § 3:105 (Third Edition, West, 2011 with 2012 Supplement in process), and the rule is examined in First-Party Cases in id., § 9:25.

 

Please Read The Disclaimer.

Condominium Carrier's Negligence Claims, Owner's Subro Rights Waiver No Bar.

    Waverly Woods owned a plot of land it wanted developed for condominiums.  Waverly Woods retained Rhodes Development Group as the general contractor for the project.  The owner-contractor construction contract contained a waiver of subrogation against the contractor and all subcontractors for damages caused by fire.

    Waverly Woods formed a condominium association, Park View, sometime after the construction contract was reached.  Waverly Woods turned the condominiums over to Park View, which purchased an unspecified "insurance policy" from Community Association Underwriters of America or "CAUA".

    Then a fire broke out while a drywall contractor was putting up drywall.  Park View made a claim for fire damage to the condominium units.  CAUA paid the claim.  CAUA filed suit, as Park View's subrogee, against the drywall contractor and others it claimed were negligent and caused the fire which caused the damage which caused CAUA to pay Park View's insurance claim.  Community Ass'n Underwriters of Am. v. Rhodes Dev. Grp., 2012 WL 2861272 *1 (3d Cir. July 12, 2012)(Pennsylvania substantive law), Download Community Assn Underwriters of Am. v. Rhodes Dev. Grp. (3d Cir. July 12, 2012) PUBLIC ACCESS.

    The Defendants raised the waiver of subrogation as a defense to CAUA's negligence claim against them.  The District Judge granted their Motion for Summary Judgment on that ground.  On appeal, the Third Circuit reversed.  Under Pennsylvania law, the Third Circuit held, if Park View was an intended third party beneficiary of the construction contract (and two judges were pretty clearly convinced that it was), still Park View and thus its subrogee, CAUA, were not barred from pursuing negligence claims, only claims under the construction contract:

It is established law in this Circuit that “a third party beneficiary will only be bound by the terms of the underlying contract where the claims asserted by that beneficiary arise from its third party beneficiary status.” E.I. DuPont de Nemours & Co. v. Rhone Poulenc Fiber & Resin Intermediates, S.A.S., 269 F.3d 187, 197 (3d Cir.2001). As a consequence, the waiver of subrogation clause only applies to CAUA (a non-party to the contract) to the extent that it asserts claims arising under that contract.

 

Id. at *2.

 

The decision drew a strong concurrence from Judge Rendell, based on the Restatement of Contracts (Third)'s treatment of intended third party beneficiaries.  The Restatement has been adopted in Pennsylvania.

 

Please Read The Disclaimer.

 

HURRICANE DAMAGE IN FLORIDA, INSURANCE CONTRACT IN NEW JERSEY: DISMISSED.

   Property Damage was claimed as a result of damages inflicted by Hurricane Wilma in Florida.  However, the insurance contract under which the Property Damage claim was made, was itself made in New Jersey.  The claimant is a Condominium Association in Florida who filed suit against its Insurance Company for alleged breach of contract, Declaratory Judgment, and "to compel an appraisal on damages".  Club Caribe Condominium Ass'n v. Travelers Excess & Surplus Lines Co., 2012 WL 529972 *1 (S.D. Fla. February 17, 2012), Download Club Caribe Condo. Assn v. Travelers Excess and Surplus Lines Co. (S.D. Fla. Case No. 11.62673.CV, Order Filed Feb. 17, 2012) PUBLIC ACCESS.

   New Jersey provides for a two-year Statute of Limitation for alleged breach of contract; Florida provides a four-year Statute and applies the law of the place where the contract was made to determine which State's law to apply.  Here, the Court ruled that the State where the insurance contract was made, is New Jersey.  Accordingly, the Court granted the Motion to Dismiss based on the applicable -- New Jersey -- Statute of Limitation.  Id. at *4 - *5.

   However, in this case, the Court did more than that.

   The Court granted leave to file a Second Amended Complaint and after it is filed, also granted leave to the parties to "conduct limited discovery up until April 17, 2012 on the issues related to lex loci contractus and equitable estoppel related to the statute of limitations."  Id. at *5.

 

Please Read The Disclaimer.

Title Insurance Lawyer's Legal Conclusions Not Admissible Expert Opinions.

   In an opinion nearly as long as the Texas Panhandle, a Federal Magistrate Judge in Texas held that a Title Insurance Lawyer could not testify to legal conclusions, not even as an Expert Witness offering 'Opinion' testimony.  Fidelity Nat'l Title Insurance Co. v. Doubletree Ptrs., L.P., 2011 WL 4715174 *6-*7 (E.D. Tex. October 5, 2011), Download Fidelity Nat'l Title Insurance Co. v. Doubletree Ptrs., L.P. (E.D. Tex. Case No. 4.08 CV 243, Memorandum Opinion and Order Filed October 5, 2011) PUBLIC ACCESS.  This holding is consistent with the overwhelming majority, perhaps universal view, that an Expert Witness is not permitted to testify to legal conclusions.

   Another consistent holding in this case came after a finding (or holding) of no Insurance Coverage.  Under Texas law, there could be no actionable breach of the implied Duty of Good Faith and Fair Dealing without a breach of the Insurance Contract.  Id. at *18.

Please Read The Disclaimer. 

Title Insurance Company Breaches Contract in California: ...

FDIC Sues For Alleged Nondisclosure, Summary Judgment Granted.

    An "escrow officer" of First American Title Insurance Company became the "closing agent" for IndyMac Bank in California.  IndyMac lent money to one Steven Darling for the purchase of "a single family home".  IndyMac provided certain Closing Instructions to First American Title in connection with the purchase, to which FAT put its corporate name.

   Among the Closing Instructions to which FAT subscribed, was one which "required First American Title to inform IndyMac if its escrow agent knew of a transaction involving the same borrower taking place within 180 days of the closing."  Download FDIC v. First American Title Insurance Co. (C.D. Cal. Case No. SACV 10.0713, Order Filed August 24, 2011) PUBLIC ACCESS, also published as 2011 WL 3737435 *1 (C.D. Cal. August 24, 2011)(authorized password required to access Westlaw).  FAT allegedly knew of two other Mortgage Loans to Mr. Darling for the purchase of two other properties through its escrow officer, one Bushway,

   IndyMac and the Mortgage Loan in question both collapsed in the face of the financial winds howling across California -- and the rest of the United States --  once the Great Credit Collapse began.  The Federal Deposit Insurance Corporation put IndyMac into Receivership.  Among other actions as IndyMac's Receiver, the FDIC filed suit for alleged breach of contract against First American Title for alleged breach of the Closing Instructions in question.

   First American Title defended itself by contending that it sent IndyMac a letter which "modified" the requirement to disclose material information.  FAT did not, however, annotate any objection to the disclosure provision in the Closing Instructions signed by FAT including the provision which required First American Title to disclose certain information.  Instead, it was undisputed that FAT simply signed the Closing Instructions and sent a letter.   Id. at *7.  The Federal Court in California granted the FDIC's Motion for Summary Judgment against First American Title.

   According to PACER, the Federal Court's Online Docket, on September 7, 2011 First American filed a Notice of Settlement in this case, Download FDIC v. First American Title Insurance Co. (C.D. Cal. Case No. SACV 10.0713, Notice of Settlement Filed September 7, 2011) PUBLIC ACCESS.

 

Please Read The Disclaimer. 

Amending the Bad Faith Complaint.

   In Download Ajax Paving Industries, Inc. v. American Home Assurance Co. (M.D. Fla. Case No. 8.10cv2508, Order Filed March 30, 2011) PUBLIC ACCESS, also published as 2011 WL 1188699 (M.D. Fla. March 30, 2011)(authorized password required to access Westlaw), the Plaintiff was Ajax, a Florida corporation.  It filed suit over a Workers Compensation and Employers Liability Policy it received from American Home Assurance Company.

   Ajax filed a Complaint in four counts:  (1) Breach of contract; (2) Declaratory Relief; (3) a Count left unspecified by the Court in this opinion; and (4) alleged "breach of an implied duty of good faith and fair dealing."  Ajax Paving Industries, Inc. v. American Home Assurance Co., 2011 WL 1188699 at *1.  (American Home filed a motion to dismiss all but the third claim, which was certainly the reason it went unidentified in the Court's opinion.)

   Ajax's response to a motion to dismiss from American Home in this case was to request leave to cure the deficiencies in its complaint which American Home had pointed out in its motion.  It is unclear with respect to Count 4 in particular whether Ajax wanted to allege a bad faith claim or not, but it was apparently clear to the Court that in this case Ajax conceded that "Ajax 'has not asserted a bad faith claim'".  Id.

   The Plaintiff's request for leave to amend in response to the Defendant's motion to dismiss in this case was granted.  The reasons that amendment was allowed by the Federal Court are potentially instructive to practitioners and clients alike:

1. The request to amend was timely.
2. It was Ajax's first request to amend in the case.
3. Amendment would not be futile "because the purpose of amendment is to cure deficiencies identified by American Home."
4. The following factors which result in denial of a request for leave to amend were not present here, in sum and in substance:  undue delay; bad faith or dilatory motive; repeated failure to cure past deficiencies; undue prejudice to the opposing party, and futility of amendment.

Id.  The bottom line in this decision, quite literally, was this:

It is preferable to allow amendment than to decide the present dispositive motion based upon Ajax's concessions and assumptions.

* * *

American Home may reassert its arguments after Ajax has amended the complaint, if necessary.

Id. at *2.

   Here is a copy of Ajax's Amended Complaint which it filed as of April 8, 2011:  Download Ajax Amended Complaint Filed 04.08.11 in Ajax Paving Industries, Inc. v. American Home Assurance Co. (M.D. Fla. Case No. 8.10cv2508).  You should take a look for yourself.  It appears however that Ajax has now clearly alleged a bad faith claim; whether its claim has legal merit will not be known for certain unless and until the Court rules on that question.

Please Read The Disclaimer.

California Bad Faith Stampede: First-Party, Third-Party Summary Judgment ...

... in Same Case.

   In Download Gaylord v. Nationwide Mut. Ins. Co. (E.D. Cal. Case No. 1.10.CV.620, Order on Defendants' Motion for Summary Judgment Filed March 4, 2011) PUBLIC ACCESS, also published as 2011 WL 836459 (E.D. Cal. March 4, 2011) (authorized password required to access Westlaw), the Court was confronted with claims both for First-Party Bad Faith and for Third-Party Bad Faith.   The Court granted the Insurance Companies' motion for summary judgment on all the Bad Faith Claims.

   The Federal Court listed many hornbook rules of law in a lengthy opinion, including these rules of California Insurer Bad Faith law:

 If a loss is not covered and no benefits are due, there can be no tort liability for breach of the implied covenant, even if the investigation was negligent. Benavides v. State Farm General Ins. Co., 136 Cal.App.4th 1241, 1250-51 (2006). The “ultimate test” in bad faith liability claims is whether the insurer's denial/conduct was unreasonable. See Nieto, 181 Cal.App.4th at 86. Where there is a “genuine issue” or “genuine dispute” as to the “insurer's liability under the policy for the claim asserted by the insured, there can be no bad faith liability imposed on the insurer for advancing its side of that dispute.”

Id. at *17.  Most if not all Courts in other jurisdictions also apply these rules to Insurer Bad Faith claims; however, while "reasonableness" is a hallmark of First-Party Bad Faith exposure, Third-Party Bad Faith does not depend on "reasonableness" for its "ultimate test".  The Federal Court apparently applied these rules to both sets of claims in this case, those based on assertions of First-Party Bad Faith and those involving alleged Third-Party Bad Faith.

   It is also significant to Insurer Bad Faith Law that this case involved reliance on Expert opinions which the Insurance Companies received in connection with their denial of a First-Party Claim and in connection with their refusal to defend a Third-Party Claim against the insured.  In this case, their reliance was reasonable in the eyes of the Federal Court, in fact, so reasonable that it was part of the reason that the Court granted the motion for summary judgment.

Please Read The Disclaimer.

 

$84,000 Attorney's Fees Award, $42,000 Breach of Insurance Contract.

   The case of Download Storfer v. Guarantee Trust LIfe Insurance Co. (S.D. Fla. Case No. 10.60400, Order Filed January 21, 2011) PUBLIC ACCESS, also published as 2011 WL 213461 (S.D. Fla. Order Filed January 21, 2011)(authorized password required to access Westlaw) presented issues surrounding a Plaintiff's Motion to Determine Attorneys' Fees Lodestar and Entitlement to a Multiplier.  This case involved questions of reasonable hourly rates for legal services in South Florida.  The Plaintiff was represented by Attorneys from South Florida and the Defendant's Counsel of record are from Atlanta, Georgia.

   This is an Insurance Coverage case.  The Plaintiff sued for Breach of Contract of a Long Term Care Insurance Policy.  Coverage was held to exist.  The Federal Court granted Plaintiff's Motion for Summary Judgment finding it undisputed, for example, that one "God's V.I.P." contracted to provide covered "custodial care" in an assisted living factility to Mr. Sheldon Storfer.  The Plaintiff is his wife and best friend, Mrs. Adele Storfer.

   The parties to the Insurance Coverage case stipulated that Damages were $42,000.00, "plus reasonable attorney's fees," in the event that Mrs. Storer prevailed.  Id. at *1.  After Mrs. Storfer prevailed, she presented her Motion to Determine Attorneys' Fees Lodestar and Entitlement to a Multiplier.

   The Federal Court held that her two Attorneys were entitled to two different hourly rates to determine an Attorneys' Fees Lodestar.  One had 25 years of legal experience, and the other 26.  Between them, the attorney "who has the record of being an expert in the area of log term care insurance litigation, thus justifying a higher rate" in this long term care insurance litigation, was held to a "reasonable hourly rate" in that case of $350.00 per hour.  The other attorney was held to a rate of $315.00 per hour.  Their Paralegal was held to a rate of $100.00 per hour.  Id. at *2 - *3, *5.

   Further, the Federal Court applied a multiplier of 1.5 in this case.  Id. at *5.  The net result was an Attorneys' Fees Award of $83,781.00.  Id. at *6.  Parenthetically, this amount is about $19,000.00 less than the amount originally sought by the Plaintiff as her opening demand for her Attorneys' Fees Award.

   It is also almost twice the amount of Mrs. Storfer's Insurance recovery.  This case is a recent example of a long-standing truth:  The amount of an Insurance recovery does not necessarily bear an exact relationship to the amount of an Attorneys' Fees Award in Court when the Insured has to hire Legal Counsel to represent her in a contested case which, like the Storfer case, "could only have been brought on a contingent basis," and where "success at the outset ... was approximately even".  See id. at *6.

Please Read The Disclaimer. 

 

Determination of Coverage in Florida Not Final Until Appeal Determined.

   It is almost always a given that when there is a Count I for breach of contract, and a Count II for alleged Bad Faith, that the Bad Faith Claim will be awaited until the Breach of Contract Claim is final.

   In the case of Download Illinois National Insurance Co. v. Bolen (Fla. 5th DCA Case No. 5D10.2856, Opinion Filed February 4, 2011) PUBLIC ACCESS, also published as 2011 WL 3355555 (Fla. 5th DCA Case No. 5D10.2856, Opinion filed Friday, February 4, 2011)(authorized password required to access Westlaw), that is exactly what happened.   The Count I Claim proceeded to Trial and resulted in a verdict of $870,366.90.  A "partial final judgment" was entered on the Verdict and Illinois National Insurance Company, the Defendant, appealed.

   The appeal is apparently still pending.  Ms. Bolen's attorneys filed a motion to dissolve the abatement of Count II.  The Florida Trial Court agreed.  The Florida Appellate Court did not agree.

   Instead, the Florida Appellate Court, in a unanimous Opinion, agreed on this issue with the Defendant.  "We agree that the bad faith claim may not proceed until the UM carrier's appeal has been finally determined."  Id. at *1.  [Emphasis added.]

Please Read The Disclaimer.

Self-Insureds' Insurance Contract Suit Against Guaranty Fund Allowed, Prevails.

   In a very long written decision in the case of Alabama Insurance Guaranty Ass'n v. Association of General Contractors Self-Insurers' Fund, 2010 WL 4777547 (Ala. November 24, 2010)(authorized password required to access Westlaw; stated NOT YET RELEASED FOR PUBLICATION), the Alabama Supreme Court affirmed a Circuit Court's Summary Judgment in favor of a group of employers.  The Employers joined the Plaintiff AGCSF and qualified as "self-insurers" under Alabama Statutes then in effect.  The AGCSF sued the Guaranty Association on a Claim arising out of an Insurance Policy issued by Reliance National Indemnity Company, and prevailed on Summary Judgment against AIGA in the Circuit Court, which Summary Judgment was affirmed on appeal to the Alabama Supreme Court in this Case.

Please Read The Disclaimer.

Indiana Public Adjusters Held Not Personally Liable For Various Torts.

   In the case of Meridian Security Insurance Co. v. Hoffman Adjustment Co., Download Meridian Security Insurance Co. v. Hoffman Adjustment Co. (Ind. Ct. App. Case No. 45A03.0911CV538, Opinion Filed August 18, 2010) PUBLIC ACCESS also published as 2010 WL 3250173 (Ind. Ct. App. August 18, 2010)(Westlaw subscription required to access Westlaw), the Indiana Trial and Appellate Courts held that the Plaintiff Homeowner's Insurance Company did not have available to it the independent torts it alleged against the Public Adjusters in that Case.  The Indiana Court of Appeals held:

(1)  A Public Adjusting Agency could not be personally liable as the Insured's agent, for Tortious Interference with a Preexisting Contractual Relationship because, as the Insureds' agent for presenting their Homeowner's Insurance Claim, its acts were their acts and they could not tortiously interfere with their own contractual relationship, and similarly there was no basis for imposing independent Tort Liability on the Public Adjusting Agency for other torts allegedly committed in the presentation of the Homeowner's Claim, such as actual or constructive Fraud, Breach of Contract, or Failure to Act in Good Faith (even if Indiana Insurance Law were to recognize a reciprocal duty of Good Faith from an Insured to the Homeowner's Insurer, which it does not).  Meridian Security Insurance Co. v. Hoffman Adjustment Co., 2010 WL 3250173 at *4-*5 .

(2)  A Public Adjuster's alleged destruction of evidence did not provide the basis for a Spoliation of Evidence Claim against the Public Adjuster in that case, because Indiana Law had not recognized an independent cause of action for Spoliation of Evidence in a First-Party Case, and further, since a defense based on the alleged Spoliation was available, Equity did not mandate the fashioning of a remedy in that case.  Id. at *5-*6.

Please Read The Disclaimer.

 

In Camera Inspection by U.S. Magistrate Judge: Held, All Documents Privileged.

   The case of Carter v. Ozoeneh, Download Carter v. Ozoeneh (W.D.N.C. Case No. 3.2008cv614, Memorandum and Opinion Filed July 22, 2010) FREE ACCESS TO THIS OFFICIAL REPORT also published as 2010 WL 2889582 (W.D.N.C. July 22, 2010)(Westlaw subscription required to access Westlaw) is unique.  At least, it is not in the garden variety of most Federal Cases that is certain.

   Plaintiff Ronald Carter sued over a patent.  He claimed to be the sole inventor of certain technology involved in the patent.  He and his corporation sued his lawyers, the Clements Walker Law Firm, and various persons (apparently almost all but not quite all of whom are lawyers who represented him regarding the patent), for alleged malpractice in connection with the patent.  It is confusing, but apparently there is another Defendant, one Emmanuel Ozoeneh, who may have been "either the sole inventor or co-inventor of the invention."  It is clear, however, that Lawyers Mutual Liability Insurance Company of North Carolina issued a Professional Liability Insurance Policy to the Defendant Law Firm and a separate such Policy to one of the individual Defendants (not Mr. Ozoeneh).  Carter v. Ozoeneh, 2010 WL 2889582 at *1.

   Mr. Ozoeneh had a difficult time obtaining defense counsel.  Lawyers Mutual undertook to pay Mr. Ozoeneh's legal fees "through summary judgment".  Id.  When Plaintiffs found out about this arrangement, they filed an Amended Complaint "asserting state law claims against Lawyers Mutual for tortious interference with contract, maintenance, and unfair and deceptive trade practices.  Plaintiffs also allege bad faith, malice, and officious intermeddling by Lawyers Mutual."  Id. at *2.

   Thereafter, the Plaintiffs propounded Interrogatories and Requests for Production, the nature of which is not entirely clear from the Magistrate Judge's Opinion, and the Defendant Lawyers Mutual responded and produced privilege logs as to certain withheld materials, the identity or description of which is not entirely clear, either.  However, it is clear that at least some of the withheld materials were delivered to the Magistrate Judge for an In Camera Inspection.   Id. at *2-*3.  The Magistrate Judge held that all of the materials inspected In Camera are privileged from discovery and do not need to be made available to the Plaintiffs.  Some of the items are protected by the Attorney-Client Privilege, and two items -- one an attached Memorandum and the other an Expert Witness's Invoice -- are protected from discovery as Work Product, the Court held.  Id. at *3.

The results in decided cases with reported In Camera Inspections of contested discovery materials are addressed by Dennis J. Wall, "Litigation and Prevention of Insurer Bad Faith" throughout Chapter 8, "Discovery From Insurers Concerning Their Handling of Third-Party Claims," and Chapter 12 concerning "Discovery From Insurers" in First Party Cases (Shepard's/McGraw-Hill First Edition, West Publishing Company Second Edition and 2010 Supplement).

Please Read The Disclaimer.