Obstreperous is an adjective, meaning “noisy and difficult to control.”  Some key synonyms are disorderly, undisciplined and disruptive.

Defense counsel and claim professionals confront obstreperous adversaries every day.  So what is the best way to deal with uncivil conduct in litigated matters?  I can say for sure responding in kind only makes matters worse and lessens your chances of achieving your goals.  Worse yet, it risks creating a “record” that may prove embarrassing when your case is later judged by a jurist.  Virtually every legal publication, in every other issue, contains an essay stressing the importance of “Civility in the Practice of Law” – – and most judges take civility seriously.

But responding civilly to an obstreperous adversary is easier said than done.  But my general rule is this: Disarm with Charm.

The other day, for example, while attempting to conduct an Examination Under Oath – – and before my first question – – the policyholder’s attorney felt compelled to make a speech on the record, explaining what he viewed as the purpose of the proceeding.  I listened quietly to his diatribe which I viewed as wholly improper.  When he was finished, I began my questioning with a simple, “You stole my thunder.”  I then began to go through the preliminaries with the policyholder, giving credit to his attorney if he had rightly characterized the nature of the proceeding.  That simple beginning lowered the temperature in the room and allowed me to develop facts relevant and necessary to an ultimate coverage determination.

Likewise, at depositions, I like to think that all of my questions are proper (i.e., not compound, not confusing and the like).  But often the obstreperous attorney asserts ill-founded objections.  Rather than argue propriety with an adversary looking for a fight, I often say, “You’re right that question came out badly, let me re-frame it.”  By acknowledging potential merit in the objection, the adversary is thus disarmed and invariably the re-framed question is allowed – – and you get the information you want.

Disarming with charm is not akin to weakness.  Rather it calls to mind Napoleon who purportedly said that in order to rule, “You must put an iron hand in a velvet glove.”  It has since become a shorthand phrase for a person who appears civil but is determined, focused and has a hard fist of iron within.

And that’s it for this This and That.  If you have any strategies for dealing with the obstreperous adversary, please call or email Dennis.

In retirement, President Eisenhower commented one of the biggest mistakes of his presidency was the appointment of Earl Warren to the Supreme Court.  Ultimately, Warren led a liberal majority to expand civil rights, civil liberties and judicial power to the consternation of conservatives such as Eisenhower.

The fierce battle now being waged on Capitol Hill over President Trump’s recent appointment of D.C. Circuit Judge Brett Kavanaugh is driven by a concern that Kavanaugh’s confirmation will guarantee a conservative majority for years to come and threaten many of the liberties won during the Warren Court and later years.

I happen to believe that life time tenure, subject only to impeachment, has a profound influence on a jurist’s thinking, regardless of past history.  For example, perhaps to burnish his legacy as Chief Judge, Justice Roberts, to the surprise of many conservatives, has sided with the liberal wing in any number of key contests. But to assess Kavanaugh’s habit of mind, I decided to look for a Kavanaugh decision in a garden variety case, not involving life, liberty or the pursuit of happiness.  And, of course, I chose insurance.

While the D.C. Circuit where Kavanaugh now sits sees few insurance cases, I found Essex Insurance Company v. John Doe, a declaratory judgment action in which Essex sought a judicial declaration to enforce a policy sublimit for molestation “claims.”

It’s a sad case.  A youngster, deemed Doe, to protect his identity in the litigation, was sexually assaulted on four occasions by four different residents of the care facility in which he resided.  Essex afforded the facility CGL coverage with a sublimit for sexual abuse claims.  The wording provided that such coverage is subject to an “aggregate limit of $300,000 per year” and on “each claim” a limit of $100,000.

Noting that the insurance contract did not define a “claim,” Judge Kavanaugh had to decide whether each occurrence (where admittedly 4 occurrences took place) constituted a separate claim to reach the aggregate limit.  Essex contended that Doe submitted but one claim for damages, and thus the sublimit ought to apply–and the District Court agreed with Essex.

In reversing the District Court, and in ruling for Doe, Kavanaugh parsed the wording of the insurance contract finding, when read as a whole, the undefined term of “claim” was logically “tethered” to “occurrence” which was a defined term.  As such, that the victim was the same in each instance, Kavanaugh found, was wholly irrelevant under the contract as written.

But of equal importance to bottoming his decision on strict interpretation of policy wording, Kavanaugh spent some time explaining that Essex, if they so choose, could have written the insurance contract to establish an “injured party” sublimit, and thus accomplish its goal of further limiting molestation coverage.

What does this insurance decision tell us about Kavanaugh’s habit of mind?  He construes wordings narrowly and demands precision in contract wording.

The ruling also signals Kavanaugh takes oral argument seriously, using a concession by Essex’s counsel during oral argument against the company’s position: “[W[hen pressed at oral argument, Essex could not identify a single insurance case in which a court interpreted the word “claim” to cover multiple torts by several individuals over a period of time.”

Politics is a full contact sport. But this upcoming battle, to be sure, will require helmets and Kevlar vests as shields against the arguments that will be shot like mortars across both sides of the aisle.  Stay tuned.

And that’s it for this This and That.

On June 6, 2018, I attended a CLE seminar sponsored by the Philadelphia Association of Defense Counsel.  The program featured Robert Zauzner, Chief of Appeals, for the United States Attorney’s Office for the Eastern District of Pennsylvania.  Zauzner is a busy lawyer because he edits all (and argues some) of the criminal and civil appeals coming from that office.

His topic focused on appellate strategy.  Zauzner shared the importance of framing the right issues; keeping the brief short and persuasive as possible.  But one insight Zauzner offered was this:  You never really know what facts an appellate court will seize upon to drive its decision.

By now, most readers of this blog know that writing for the majority (7/2), Justice Anthony Kennedy gave the Court’s judgment on First Amendment grounds to baker Jack Phillips in the Masterpiece Cake Shop case.   But the high court got to its result, which will have limited value as precedent, in a strange way – – a way that illustrates the wisdom of Zauzner’s advice on the facts.

The court based its decision, not on broad principles of the First and Fourteenth Amendment (or indeed whether a cake could be considered a work of art) but on the manner in which the Colorado Civil Rights Commission (CADA) dealt with Jack Phillips at the several hearings in which they considered the reasons Phillips gave for refusing to bake a cake for a same sex couple.  In essence, the court found that CADA failed to give due deference to what the Court characterized as Phillips’s deeply held religious beliefs.  The facts driving this outcome were literally baked deep into the record and were not really a focus in the briefs or during the cut and thrust at oral argument.

This narrow ruling proves Zauzner’s point about the care that ought to be given to telling the story behind any appellate controversy.

My feelings and that of many SCOTUS commentators is the Court focused on CADA’s conduct precisely because it wanted to avoid any broad pronouncements premised on a cake made of flour, yeast and sugar.  And so, Phillips won because the story, as told, revealed the animus of CADA towards Phillips’s claim of a strongly held religious belief.

And that’s it for this This and That.  If you have any comments or cake recipes that you would like to share, please call or email Dennis Wade.

Do personal pronouns matter?  You bet they do.  “How can we help you?”  It is the response customer-service workers utter more than any other.  And when I hear that generic “we,” I am tempted to respond, I want you to help me resolve my issue, not some “we.”  It is you I have on the phone.

According to a study recently reported in the Wall Street Journal, companies that trained employees to use “I” in responding to complaints realized much greater customer satisfaction and loyalty.

The importance of “I” carries over into the law.  Clients want to know who is behind the opinion whether it relates to a coverage issue; the economic value of a personal injury case; or, indeed, any recommendation concerning legal strategy.

Of course, the best opinions are rooted in objective fact and reasoned evaluation of data and legal precedent.  But the key component of any opinion is often the judgment of the author.  Yet all too frequently, lawyers fear using the phrases “I think,” or “My recommendation is.”  Sometimes the reluctance stems from law school training.  But sometimes it stems from the fear of being wrong–of making a bad call.

Yet the essence of what we do, claim professionals and lawyers, is make judgment calls.  And I, for one, resist standing behind the We pronoun unless, in fact, the decision taken was based on a consensus strategy developed between insurer and counsel, a practice I urge in all cases.

Thinking in terms of “I,” I find, frees you to use all your life’s experience to form judgments about credibility and the many intangibles that must be taken into account to predict an outcome.  Thinking “corporately,” on the other hand, inhibits the ability to assess what often resides just below the surface of awareness.

But now I sound a note of caution, heeding the wisdom of the ancient English proverb: “Two heads are better than one.”  I am a fan of collaboration–so long as it’s not used as an excuse for not speaking one’s mind.

And that’s it for this This and That.  If you have any pronouncements on pronoun use, please email or call Dennis.

Not murder, not drugs, not loansharking.  So, what is the life blood of Organized Crime?  It is bookmaking, accepting illegal wagers on sporting contests in amateur and professional arenas.  I learned this lesson first hand in the Rackets Bureau of the Manhattan D.A.’s Office.  But on Monday, May 14, 2018, the United States Supreme Court may have mowed down more mobsters than any prosecutor of the modern era.

Writing for the majority in Murphy, Governor of New Jersey v. National Collegiate Athletic Assn., et al. Justice Alito struck down a 1992 federal law that banned commercial sports betting in most states, effectively allowing states to compete with the mob for an estimated $150 billion in illegal wagers and professional and amateur sports.

At issue was a federal statute known as PASPA–the Professional and Amateur Sports Protection Act.  This law prohibited states from authorizing sports gambling.  Its chief sponsor was then New Jersey Senator Bill Bradley, a former college and professional basketball star, who argued the law was necessary to safeguard the integrity of sports.

In fact, the majority recognized the legalization of sports gambling was controversial and held the potential to “corrupt professional and college sports.”  But what struck me about the decision was the conservative majority, while recognizing the perils of striking down PASPA, believed the virtue of strictly adhering to constitutional jurisprudence outweighed the perils of its decision.  As stated by Justice Alito in conclusion:

The legalization of sports gambling requires an important policy choice, but the choice is not ours to make. Congress can regulate sports gambling directly, but if it elects not to do so, each State is free to act on its own.  Our job is to interpret the law Congress has enacted and decide whether it is consistent with the Constitution.  PASPA is not.  PASPA “regulate[s] state governments’ regulation” of their citizens, New York, 505 U.S., at 166. The constitution gives Congress no such power.

On its face, this decision does not speak to insurance defense or coverage work.  But often–and it is the case here–study of monumental SCOTUS decisions yields key insights on how best to position and argue motions and appeals in coverage and defense cases.

The challenge faced by two New Jersey governors, first Christie and then Murphy, was to persuade the high court that, while the purpose behind PASPA had merit, it ran afoul of the wording of the Constitution.  Equally, coverage and defense lawyers face similar challenges–getting jurists to focus on applying the law or the wording of the insurance contract to the facts without regard to the “expectations” of the other side, whether reasonable or otherwise.

If you would like to put down a “line” or this case, discuss bookmaking or insurance, please email or call Dennis.  And that’s it for this This and That.

In coverage litigation, policyholder attorneys cite cases that reside in every jurisdiction for the proposition that policy language susceptible to more than one reasonable interpretation creates an ambiguity which must be construed in the insured’s favor.  Often, it is an easy argument to make because the general coverage grant in most CGL policies is broadly worded.  But that wide wording is subject to policy exclusions which take away coverage from the general coverage grant for specifically delineated circumstances.

In some cases, policyholder attorneys argue that the limitation contained in the exclusion, when compared to the broad coverage grant, creates “illusory coverage” because it undermines what the insured sees as a broad coverage grant.

Facing these arguments daily, I was struck by an eminently sensible ruling from the 11^th Circuit in which the Circuit upheld a win by Travelers in a coverage contest in the District Court for the Southern District of Florida.

Travelers v Salt ‘N Blue, LLC, et al., involved a tragic mishap in which a recreational diver became ensnared in net and drowned for want of air in his tank (before the divemaster could return to assist the diver).

The diver’s estate sued the vessel owner (Salt ‘N Blue), the Captain (Wranovics) and the divemaster (Barkley).  Having gone through classes in and out of the water to get my own diving certification, I have little doubt that divemaster Barkley was negligent because he allowed the ill-fated diver to go back down–without a “buddy”–to retrieve a tagged lobster trap.  The mantra of all diving schools is simple: Never, never, dive without a buddy.  But the obvious negligence of the divemaster did not drive the coverage contest.

Barkley was a named insured under the policy Travelers issued to Salt ‘N Blue and he demanded to be defended and indemnified under that policy.  Travelers agreed to defend Barkley under a Reservation of Rights.  But while the underlying litigation was pending, Travelers brought an action seeking a declaration that it was neither obligated to defend nor indemnify Barkley because of a Diveboat Limitation Endorsement in the Travelers’ policy, which excluded from coverage. “[B]odily injury, loss of life, an illness of any person while in the water or arising as a consequence of being in the water.”

The general coverage grant obligated Travelers to “pay sums [when]…a covered person under this policy become[s] legally obligated to pay as a result of the ownership, operation maintenance of the insured’s vessel because of bodily injury or loss of life.”

To be sure, on its face, the diver’s death, in a general sense, arose from the “operation of the vessel” but the District Court (and later the 11^th Circuit) ruled that the Diveboat Exclusion was unambiguous and limited the general coverage grant in Travelers policy, ruling “[s]imply because one provision gives a general grant of coverage and another provision limits coverage does not mean there is an ambiguity.”  The court went on to explain it is the very nature of insurance coverage exclusions to limit and modify the general coverage grant.

Beyond that, the Circuit found that limiting coverage for a subset of claims that would ordinarily fall within the general coverage grant, standing alone, did not create “illusory coverage,” pointing out that Travelers coverage extended to claims arising from negligence in the vessel’s operation.

The take away from this well-reasoned decision is never fall into the lobster trap (ouch!) of false comparisons between the general coverage grant and specific policy exclusions,.  And, of course, never dive without a buddy.

If you would like to discuss this case further, please call or email me.  And that’s it for this This and That.

What does porn star Stormy Daniels, a/k/a Stephanie Clifford, and her battle with President Donald Trump have to do with insurance litigation?  More than you may think.

The connection stems, not from the steamy and sordid allegations of adultery against a candidate and now President of the United States.  Rather it arises from the Department of Justice and its quest to review the files (emails, correspondence, bank records, etc.) of Attorney Michael Cohen who, purportedly, acted as president Trump’s firebrand “fixer” for many years.

What is at issue? It is the sanctity and scope of attorney-client privilege–an important concept in first party insurance litigation.  The attorney-client privilege is ancient.  Its roots may be traced back to the Romans.  But it was firmly established in Anglo-American jurisprudence before the dawn of our Republic.

The privilege ensures that one who seeks advice from a lawyer should be free of any fear that secrets shared with counsel will ever be revealed. With the protection of that privilege, the client may speak freely and openly to counsel, disclosing all relevant facts behind a private door that may be broken down only under exceptional circumstances.

To sustain the attorney-client privilege, four basic requirements must be met: (1) A communication; (2) made between client and lawyer; (3) in confidence; and, (4) for the purpose of obtaining legal assistance in a controversy, whether civil or criminal.

Shortly after the search warrant was executed on Cohen’s residence and law office, President Trump tweeted: “Attorney-client Privilege is now a thing of the past.” But that bold statement is now being litigated before S.D.N.Y. Judge Kimba Wood who is tasked with how best to decide what documents may qualify as privileged and what documents fall outside the zone of that privilege.  At the moment, it looks as if Judge Woods herself will undertake a review with the assistance of an appointed Special Master.  The stakes are high because much of Cohen’s activities on behalf of his best client may not qualify as confidential communications between attorney and client, and thus may be revealed.

And now back to insurance. I do not have enough space in this post to delve into the many cases across the country where the attorney-client privilege has been attacked in an insurance context.  So, I take my cue from Shakespeare’s Polonius who gave his son Laertes a few “precepts” to hold close as he embarked on his journey back to France:

• Remember that claim information flowing through an attorney’s hands does not become cloaked in privilege simply because counsel has touched it.  Every fact that forms the basis for a disclaimer is discoverable.
• Remember that any discussions with counsel seeking advice or claim guidance should be clearly denominated as such in claim notes.
• Remember that counsel’s role is to give advice and guidance in respect of the application of policy wording to the facts developed during the claim investigation.  If counsel becomes the “investigator,” counsel’s reports in respect of the facts may be discovered.

On this latter precept, my preference is to let the transcript of the Examination Under Oath speak for itself; while I convey my mental impressions and legal advice in a separate report.

These three precepts just scratch the surface of what must be done to secure the sanctity of attorney-client privilege in first party contests.  So, as and when you take a decision to employ counsel, it helps to have a clear understanding of what will be later disclosed and what may be lawfully shielded from scrutiny.

If you would like to discuss this important issue further, please call or email me.  And that’s it for This and That.