On April 3, 2018, I was called to jury service as a trial juror in Supreme Court, New York County. And, for a lawyer, being on the other side of the courtroom rail is a thought provoking experience. My chances of being chosen to sit on a civil tort suit, of course, were slim–former prosecutor, insurance defense and coverage attorney and an acquaintance with many of the plaintiff and defense practitioners in New York County.

Step one in the jury selection process is Voir Dire, an Anglo-French term which literally means: To see, to speak. But I prefer the Latin derivation of the phrase: Verum dicere, meaning “To say what is true.”  What the law wants is “fair and impartial” jurors who will decide the case on the facts disclosed at trial.

What advocates want is something else–jurors “open” to their view of the matter on trial. Jury selection has become a science, a practice featured on Bull, a popular TV drama featuring Michael Weatherly playing Dr. Jason Bull, a character modeled after Phil McGraw who began one of the most successful trial consulting firms in the country. Like all jury consultants, Bull purports to use everything from social media to neurolinguistics to discern what really makes a juror tick, and thus either a good or bad choice for counsel.

As I sat through my first voir dire in a medical malpractice action, I re-discovered, in a visceral way, what I always knew, the challenge for the lawyers is to judge whether the prospective juror is really saying what is true (verum dicere). Potential jurors who don’t want to serve, to be sure, know what answers to give. And all good advocates recognize these for what they are–polite fibs to avoid the trial time commitment. So, the real challenge begins when the fibbers fall away and the potential panel consists of those citizens prepared to give of their time to decide the contest.

I have used jury consultants and their insights are often valuable. The usefulness of their contribution depends in large measure on how well counsel has developed its trial themes and the overall narrative of the story counsel plans to tell at trial. But the reality is jury consultants are pricey and the cost often outweighs the potential benefit in the garden variety controversy.

So, how do you tell whether the juror is telling the truth about potential bias, about attitudes, about whatever issue matters to your trial themes. There are no magic answers. Go with your gut. And if you want a rationale for this tried and true advice, I urge you to read Blink by Malcolm Gladwell who had a simple but profound insight: We get into trouble when we try to talk ourselves out of a gut feeling. According to Gladwell, our brains are fabulous microprocessors that process information on many, many levels–levels well beyond our conscious awareness.

Say, for example, your gut tells you something is “off” about an engineer in the panel of prospective jurors; yet, your mind tells you a person trained to solve problems and think logically is ideal. What to do? Gladwell would urge you to follow your instinct and use a peremptory challenge to strike the engineer.

By now, after this musing, you’re wondering what became of my jury service. I was bounced from a panel in a medical malpractice “pre-qualification” panel because WCM had cases with defense counsel’s firm. And, at 4pm, the jury clerk dismissed everyone because so few cases were trial ready because of Spring Break Week.

But back to Gladwell, and another word of caution. A nurse excused from the same med-mal panel and I started chatting as we headed for the exit upon being excused from our term of service. But she, unlike me, sat through several hours of questioning. Bold, and thinking of Gladwell, I asked my new friend: “Based on what you saw during voir dire–and if you needed a lawyer–who would you hire?” “Easy call,” she said, “Plaintiff’s Attorney.”  Puzzled, I asked why, because, to my eye, defendant’s counsel seemed, well, more authentic and in command.

The answer? “Defendant’s counsel slouched and was sloppy in appearance. “

The moral of this tale is this: Stand straight and wear clothes that fit. To give my elevator friend due credit, defendant’s lawyer did look like he was wearing his older brother’s suit. And it was green, a poor color choice for an advocate unless, of course, you are Reaganesque.

And that’s it for this This and That.

Each Spring, the New York State Bar Association hosts a Continuing Legal Education Program dedicated to coverage issues. This year, Dennis, a sports maven (and a weekend warrior), will discuss how the judiciary addresses or balances the risks inherent in sport and recreational activity.  His written submission, with co-author Nicholas Schaefer, is entitled: Liability for Sporting and Recreational Activities.

If you care to attend live, here is a link to the program www.nysba.org/PremisesLiability.

In a matter a first impression certain to benefit art insurers everywhere, New York’s Appellate Division, First Department unanimously agreed with WCM’s argument that a fine arts dealer all-risk policy insuring against loss or damage to works of art does not provide coverage for defective title.  In DAE Associates, LLC v. AXA Art Ins. Corp. et al., the plaintiff, an innocent art gallerist, fell victim to a scheme perpetrated by an infamous thief, now convicted felon, James Meyer.

For 26 years, Meyer was the trusted studio assistant of iconic American artist, Jasper Johns.  Between 2006 and 2012, Meyer stole a number of artworks from Johns and then sold them to unsuspecting gallerists and collectors on condition the buyers could not sell or display the works for seven years, or sooner if Johns died.  To make the curious caveat plausible, Meyer explained this proviso, telling the buyers the art was gifted from Johns and he would be embarrassed if Johns discovered the sale.

In 2010, the plaintiff, Danese, was approached by an intermediary claiming to have Untitled, 2002-2005, Acrylic on paper, 37 ¼ x 30 inches, by Jasper Johns, for sale.  As with other victims of Meyer’s scam, he was told the work was available on the condition the eventual buyer keep the work private and not sell or loan the work for seven years or until Johns died.

After finding a couple willing to buy the work, Danese bought the work and then sold it to the couple for $898,218.75.  In the contract of sale, Danese warranted he had marketable title to the work and agreed to rescind the purchase price in the event title proved defective.  Three years after the sale, the FBI visited the couple to report the Johns hanging in their home was stolen.  After returning the work to Johns, the couple sued Danese under the contract for a refund of the purchase price.

Faced with a lawsuit for a refund of the sale price, Danese sued AXA for coverage under his Fine Arts Dealers All-Risk policy.  That policy afforded coverage for “all loss or damage to insured property.”  Danese argued coverage existed because he suffered a loss; the policy did not use the word “physical” to modify the words “loss or damage;” and, the policy did not contain an exclusion for defective title.  AXA disagreed, arguing no coverage existed because there was no loss to the artwork itself; the plaintiff’s loss was purely financial, flowing from a simple breach of contract; and, to find coverage would effectively transform the all-risk policy into a title insurance policy, which Danese knew was a separate and more expensive product.

After Judge Oing, then a Justice of the New York Supreme Court, granted AXA’s motion to dismiss, Danese appealed to the First Department.  In opposition, WCM presented the issue before the court as follows:

Renato Danese, with a number or other intermediaries, brokered the sale of a stolen work of art, Untitled, 2002-2005, by Jasper Johns to Perry and Donna Golkin for $898,218.75.  Those sale proceeds were divided among the intermediaries, with $175,000.00 going to Danese.  In his written contract with the Golkins, Danese agreed to refund the full $898,218.75 sale price if title proved defective. After the FBI seized the stolen work, Renato Danese turned to AXA, requesting indemnity for the full $898,218.75 sale price of the stolen work.  Danese did so even with an admitted awareness that he did not have title insurance for such reimbursement.  Judge Oing properly found that there was no fortuitous loss of the work itself, but ruled the loss arose from a purely financial transaction:  Danese’s breach of the Golkin sales contract.  Under these circumstances, should Judge Oing’s decision be disturbed?

Earlier this week, the First Department unanimously answered that question with a resounding “No,” and ruled that “[t]he all-risk policy at issue, which covered insured property for ‘all loss or damage to insured property,’ did not apply to plaintiff art gallery’s contractual liability to purchasers of stolen artwork that was returned to its rightful owner.”  In doing so, the court accepted WCM’s argument that “[d]efective title is clearly not a physical loss or damage….from any external cause” and that “[d]espite the fact that the phrase ‘loss or damage’ in the policy was not qualified by terms such as ‘direct’ or ‘physical,’ [w]e may not, under the guise of strict construction, rewrite a policy to bind the insurer to a risk that it did not contemplate and for which it has not been paid.”

Today’s decision is a significant victory for art and title insurers everywhere.  By recognizing “[i]t is not reasonable to interpret a policy so broadly that it becomes another type of policy altogether,” the First Department provided assurance to art insurers that they will not be forced to pay title claims they never agreed to insure.  And title insurers may now take comfort in a ruling that refuses to undermine their market by transforming occurrence-based policies into something they are not.

AXA was represented by Dennis M. Wade and Michael A. Gauvin of Wade Clark Mulcahy, with Dennis arguing the matter before the First Department.  If you have any questions, please call or email Dennis at .

75 years ago, in 1933, Hitler came to power and soon Germany and then the whole of Europe descended into the long, dark night of Nazi terror. I have memories of asking my Dad about Normandy, the slog toward the Rhine and the final major contest in the Ardennes forest, in what became known as the Battle of the Bulge. And, like many others of his generation, my Dad said little, except that he made it home.

But despite the passage of years, the darkness of that era is ever present. Among this year’s featured and award-winning films were Dunkirk and The Darkest Hour. And, so too, is the law is still grappling with Nazi atrocities, confronting the problem of title to Nazi-looted art and “forced sales” of art resulting from relentless persecution of Jewish collectors and dealers.  All of the reported decisions tug at the heart. But perhaps none more so than Judge Loretta A. Preska’s recent decision in Laurel Zuckerman, As Ancillary Administratrix of the Estate of Alice Leffman v. The Metropolitan Museum of Art (SDNY, 16 Civ.7665, February 7, 2018).

There, in stark and gripping prose, the Court described the flight of the Leffman family from Germany to Italy to Switzerland, and ultimately, to the United States, after losing their business, livelihood, home, and virtually all of their possessions because of Nazi persecution of Jews. Yet, despite the horrors endured by the Leffmans, the Court had to grapple with a narrow legal issue: Did The Metropolitan Museum of Art have good title to an iconic work of Pablo Picasso entitled “The Actor” (1904-1905) which the Leffmans owned from 1912 to 1938 until its sale that year by the Leffmans to a Paris dealer for U.S. $13,200?  Thereafter, in 1940, the Paris dealer consigned the work for sale to the Knoedler Gallery in New York. Ultimately, Thelma Chrysler Foy purchased the work in 1941 for U.S. $22,500 and later, in 1952, Foy donated the work to The Met, where it remains today.

Ms. Zuckerman, the great-grandniece of the Leffmans, as auxiliary administrator of their estate, brought a writ of replevin against The Met to recover the Picasso, as rightful owner, claiming that the work’s sale was “forced” under the duress of the Nazis in Germany and later Italy where the Leffmans first fled. As such, the Court had to grapple with the question of whether the work was sold under” duress” as a matter of Italian or New York law.

Finding no outcome determinative difference between the two jurisdictions in respect of this issue, the Court looked to the facts surrounding the actual sale of the work to determine whether a threat by another party trumped the exercise of free will by the Leffmans.  But the facts pleaded–and accepted by the Court–revealed the work itself was in safekeeping in Switzerland and the Leffmans had “shopped” the work to Paris dealers to leverage its sale value before finally making the deal. Beyond that, the pleading established that the Leffmans had other financial alternatives to raise cash for their continued flight from Nazi terror.

So, as a matter of pleading deficiencies, the action was dismissed. No doubt, an appeal will follow. But this decision reminds us the very difficult task jurists face–applying the law to the facts when, often, the heart wants to take us in a different direction.

And that’s it for this This and That.

Wade Clark Mulcahy takes pleasure in welcoming Vito (“Tony”) Pinto as Resident Partner of its Springfield, New Jersey, office.  Tony brings 25 years of litigation experience to the firm’s New Jersey litigation practice and possesses expertise in the defense of premises liability, property damage, construction defect and environmental matters in state and federal courts.  He has also handled many significant and sophisticated compliance and enforcement actions as well as private party cost recovery and multi-party cost allocation proceedings.  Tony is joining WCM upon the happy graduation of Denise Ricci from WCM partner to caregiver for her grandchildren and to pursue charitable works throughout New Jersey. 

Prior to joining WCM, Tony was a partner at a regional law firm where he served on that firm’s Management Committee and was in charge of recruitment.  Before entering private practice, Tony served as Law Clerk to the Honorable James J. Petrella, Presiding Judge of the New Jersey Appellate Division.  He received his law degree, with Honors, from the George Washington University National Law Center and his bachelor’s degree from Franklin and Marshall College.

As a student of appellate advocacy, I love to argue, attend, watch, and listen to oral arguments because I am convinced they do in fact shape the outcome of the ultimate decision.  The Supreme Court heard oral argument in Masterpiece Cakeshop, Ltd. v. Colorado Civil Rights Commission on December 5, 2017.  The argument lasted for more than an hour and consumed 108 pages of transcribed cut and thrust.

In my post of  November 9, 2017, I predicted that SCOTUS would somehow “ice over” the cake as art issue and affirm the ruling of the Colorado Civil Rights Commission which ruled that baker Jake Phillips’s refusal on religious grounds to create a specialty cake for a same sex couples’s forthcoming marriage violated Colorado’s anti-discrimination law.

The argument, with sharp questions coming from both liberal and conservative justices, I believe, proves the accuracy of my prediction.  Phillips’s lawyer was asked to draw fine distinctions between, for example, a baker, a florist, a make-up artist, and a chef.  But I thought the most telling question came from Justice Alito, followed by Justice Breyer.  And it was a question central to the warning I give to all of my colleagues who are preparing for oral argument: Be Wary Of The Concessions You Are Asked To Make. Because Justice Alito’s question with its implicit request for a concession is so telling, I quote it in full below.

“Justice Alito: What would you say about an architectural design; is that entitled to – – not entitled to First Amendment protection because one might say that the primary purpose of the design of a building is to create a place where people can live or work?

Ms. Waggoner: Precisely.  In the context of an architect, generally that would not be protected because buildings are functionable, not communicative.

Justice Alito: You mean an architectural design is not protected?

Ms. Waggoner:  No. Architect – – generally speaking, architectural would not be protected.

Justice Breyer: So in other words, Mies [van der Rohe, a famous modernist architect] or Michelangelo or someone is not protected when he creates the Laurentian steps, but this cake baker is protected when he creates the cake without any message on it for a wedding?  Now, that – – that really does baffle me, I have to say… “[bracketed reference, mine].”

With one question – – and with the concession made, it seems to me that Phillips’s lawyer revealed, albeit unintentionally, that his client’s refusal to bake a specialty cake for a same sex couple had to do with the identity of the same sex couple – – and not the artistry or the message in the cake he was asked to create.  In other words, having conceded that an architect under Colorado’s law could not refuse to create a design for a same sex couple, the credibility of the argument collapsed like a cake for want of the proper amount of yeast, especially when the Court baked Michelangelo and Mies van der Rohe into the cleverly designed query.

In sum, having read all of the briefs and having studied the argument, I do not think SCOTUS is going to use this controversy to decide what constitutes a protected message under the First Amendment or indeed whether a cake may qualify as art.

And that’s it for this This and That – – and for 2017.  Best wishes for a Joyous Holiday Season and a Happy & Healthy New Year.

Of late, insurers who write crime and fidelity coverage have been “spooked” by “spoofing” scams in which bad guys use spoofed emails to trick company executives to wire transfer funds to phony accounts.

Curious about this phenomenon, I Googled “How do you spoof an email?”  It’s shockingly easy as I learned from watching You Tube how-to videos and reading scores of articles that popped from my simple query.  And the very ease of spoofing is at issue in Medidata Solutions, Inc. v. Federal Insurance Company, a matter about to be heard in the Second Circuit.

In that case, Federal wrote “Funds Transfer Fraud” and “Computer Fraud” coverage.  In 2014, Medidata sustained a loss when it wire transferred close to $5 million dollars from its account at Chase Bank to an account in a Bank in China that proved to be the account of a fraudster and not the party that Medidata thought it was paying.

In the coverage contest in the District Court, both sides agreed that spoofed emails, seemingly coming from the plaintiff’s CEO, tricked authorized employees to trigger the wire transfers. Federal argued its coverage was limited to third party hacking or otherwise a physical intrusion into the company’s computer system or bank account. But Federal contended that simple spoofing scams – – resulting in authorized transfers by the insured itself – – did not fit within the embrace of its coverage.  The District Court disagreed with Federal’s reading of the coverage grant, finding the wording wide enough to embrace a scheme in which a spoofed email prompted an employer to trigger a wire transfer.

That this issue is central to Crime and Fidelity insurers is made plain by the amicus brief submitted by The Surety & Fidelity Association of America (SFAA), an organization that drafts fidelity and crime insurer policy forms.  See, Medidata Solutions, Inc. v. Federal Insurance Company, Brief of Amicus Curiae Supporting Reversal.

In essence, SFAA argued that if the Circuit accepts the ruling below – – that a simple spoofed email scam triggers computer fraud coverage – – the availability of such coverage will likely either become too expensive or too burdensome because of cyber security requirements likely to be imposed by insurers.

The outcome of this contest, whether for against Federal, will no doubt prompt wording revisions in crime and fidelity policies – – and so it is a case well worth following.  But as I reflect on this post, I find it a bit scary that a simple Google search explained in great detail how to perpetrate a fraud.  I thought more “phishing” would be required.  Look that term up if you are curious or if you want more information on how to commit a cyber-crime.

And that’s it for This and That.”