International In-house Counsel Journal
Vol. 9, No. 36, Summer 2016, 1
Catching the White Whale —
Proving Insurance Bad Faith and Recovering
Punitive Damages at Trial in the United States
MARK VAN DE VOORDE
Chief Legal & Administrative Officer & Corporate Secretary, Victaulic Company, USA
JOSEPH D. JEAN, COLIN T. KEMP, Partners, &
G. ALLEN BRANDT, Senior Associate
Pillsbury Winthrop Shaw Pittman LLP, USA
Abstract
On the heels of their $55.3 million insurance litigation victory in Victaulic Co. v.
American Home Assurance Co. et al., Victaulic Company’s Chief Legal and
Administrative Officer Mark Van De Voorde and Victaulic’s outside trial counsel Joseph
D. Jean, Colin T. Kemp and G. Allen Brandt of Pillsbury Winthrop Shaw Pittman LLP,
review strategies for taking an “insurance bad faith” case to trial before a jury in the
United States. The article broadly outlines the importance of appropriate liability
insurance to multi-national corporations, and the means by which in-house counsel can
manage business risk through insurance and by working with their insurers. If and when,
however, the relationship with an insurer breaks down, in-house counsel must lead their
clients in preparing for trial. That takes planning and preparation, however. Based in
part on their experience in the Victaulic litigation, the authors explain how to get ready
for trial, outlining strategies for success, including utilizing the jury instructions and
applicable law as guides, using the discovery process to marshal the evidence, and
advancing themes and theories to tell a good, compelling story to the jury. Along the
way, the authors provide a primer on U.S. insurance jurisprudence, highlight useful
resources and identify pitfalls to avoid.
I.
Introduction.
This article provides a perspective on and strategies for taking an “insurance bad faith 1”
case to trial before a jury in the United States (“U.S.”), as well as some preemptive
actions that in-house counsel can take to potentially avoid the need to have to take an
insurance company to trial just to obtain the benefit of their company’s insurance
contracts.2 This article assumes that all the parties to the insurance contract want a fair
1
2
Bad faith has been variously described by courts and commentators, and as such, it has many possible
definitions that are often specific to the facts of the case. Some of the most common include: (1) an
unexplainable recalcitrance by the carrier to pay the insured’s claims; (2) reprehensible conduct in redirecting, reallocating, or re-slotting coverage of claims; (3) purposeful conduct by the adjuster or the insured
in refusing to pay a claim; (4) “malicious intent” or purposeful actions by the adjuster or carrier in
investigating and adjusting the claim; and (5) “conscious wrong doing” and “spite” towards the insured.
Daniel Asmat & Sharon Tennyson, The Law and Economics of Insurance Bad Faith Liability, in RESEARCH
HANDBOOK ON THE ECONOMICS OF INSURANCE LAW 413, 413 (Daniel Schwarcz & Peter Siegelman eds.,
2015).
Throughout this article we use “insurance company,” “insurer” and “carrier” synonymously and
interchangeably to refer to corporate entities that sell and provide insurance. Similarly, we use
“policyholder” and “insured” synonymously and interchangeably to refer to corporate entities that purchase
insurance.
International In-house Counsel Journal
ISSN 1754-0607 print/ISSN 1754-0607 online
2
Mark Van De Voorde , Joseph D. Jean, Colin T. Kemp & G. Allen Brandt
and honest marketplace for risk-transfer.3 The business of insurance and risk transfer 4 is
truly international, and as multi-national corporations (“MNCs”) and their large insurers
continue to grow their business across borders5, MNC’s expectations will increasingly
converge6 regarding the type of insurance they acquire, the innovations in policies,
coverages, and how those policies (and any underlying claims) are regulated 7 and
administered.8 Assuming that insurers are expected profit-maximizers, and the actual if
not expected return from an insurance contract and the investment of its proceeds less the
payouts are the random variables, insurance companies underwrite, price and sell policies
to their customers based on their demand to cover the probability of one or more
“insurable” events (known as “occurrences9” or “claims made10” depending on the type
3
4
5
6
7
8
9
Risk transfer can be by insurance or contractual indemnity; it generally involves four elements: (1) who
controls the risks; (2) who knows more about the risks; (3) legal limitations; (4) and bargaining capability.
For a detailed explanation and the history of various risk transfer techniques, see Georges Dionne, Risk
Management: History, Definition and Critique, 16 RISK MGMT. & INS. REV. 147 (2013).
A very actively changing area of the law involves the risk transfer or “insurance” provisions and supporting
documentation in M&A transactions. For an example from Turkey, see Bihter Bozbay & Mert Bülbül,
Representations and warranties insurance in M&A deals, INT’L L. OFF. (Mar. 9, 2016),
http://www.internationallawoffice.com/Newsletters/Corporate-FinanceMA/Turkey/Kolcuolu-DemirkanKoakl-Attorneys-at-Law/Representations-and-warranties-insurance-in-MA-deals, or for an example from the
U.K., see Will Pearce & William Tong, Private M&A on trial: penalty clauses and indemnities, INT’L L.
OFF. (Mar. 9, 2016), www.internationallawoffice.com/Newsletters/Corporate-FinanceMA/United-Kingdom/
Davis-Polk-Wardwell-LLP/Private-MA-on-trial-penalty-clauses-and-indemnities.
There is evidence that cross-border insurance consolidation, rather than decrease risk through diversification,
actually may be increasing insurance sector exposure to systematic risk. See Janina Mühlnickel & Gregor
N.F. Weiß, Consolidation and Systemic Risk in the International Insurance Industry, 18 J. FIN. STABILITY
187 (2015).
While convergence is increasing, there are country-specific environmental conditions that impact this trend.
See Wei Huang & Martin Eling, An Efficiency Comparison of the Non-Life Industry in BRIC Countries, 226
EUR. J. OPERATIONAL RES. 577 (2013) (discussing how size, profitability, solvency and ownership form
impact insurers operations); Dieter Farny, The Development of European Private Sector Insurance over the
Last 25 years and the Conclusions that Can be Drawn for Business Management Theory of Insurance
Companies, 24 GENEVA PAPERS ON RISK & INS.: ISSUES & PRAC. 145 (1999).
Ben Foat, The Modernisation of Insurance Law in the United Kingdom, 8 INT’L IN-HOUSE COUNS. J. 1
(2015) (discussing how new regulations are leveling the playing field between insureds and insurers).
Country regulators are actively seeking to keep up their regulatory schemes with the demand for ever
changing insurance products. For a few examples, see Celia Jenkins, Significant overhaul of file and use
procedure for general insurance products, INT’L L. OFF. (Mar. 15, 2016) (Discussing the significant changes
promulgated by Insurance Regulatory and Development Authority of India (IRDAI) Guidelines on File and
Use Requirements for General Insurance Products), http://www.internationallawoffice.com/Newsletters/
Insurance/India/Tuli-Co/Significant-overhaul-of-file-and-use-procedure-for-general-insurance-products;
Marta Viegas & Barbara Bassani de Souza, SUSEP clarifies rules for contractual formalisation of
reinsurance transactions, INT’L L. OFF. (May 10, 2016) (summarizing Brazil’s new rules for execution of an
enforceable reinsurance contract), www.internationallawoffice.com/Newsletters/Insurance/Brazil/
TozziniFreire-Advogados/SUSEP-clarifies-rules-for-contractual-formalisation-of-reinsurance-transactions.
Mexico recently addressed a number of its insurance and reinsurance structural, legal and regulatory issues
with the abrogation of the General Law of Insurance Institutions and Mutual Companies (Ley General de
Instituciones y Sociedades Mutualistas de Seguros) (“LGSIMS”) and the adoption of the new Insurance and
Surety Institutions Law (Ley de Instutuciones de Seguros y de Fianzas) (the “LISF”) and the Unified
Insurance and Surety Regulations (Circular Unica de Seguros y Fianzas) (“CUSF”).
Martin Strnad, International Insurance Programs - Legal Frictions and Solutions, 2 INT’L IN-HOUSE COUNS.
J. 1263 (2009) (outlining a few of the legal challenges global insurance programs are faced with and touches
upon some traditional and some new solutions generally applicable in the different countries where such
business is produced).
Generally, both homeowner’s and CGL policies have defined an occurrence as “an accident, including
continuous or repeated exposure to substantially the same general harmful conditions.” See generally
COUCH ON INSURANCE, (3d ed. 2016). An “occurrence” policy protects a company from any covered
incident that “occurs” during the policy period, regardless of when a claim is filed. An occurrence policy will
respond to claims that come in – even after the policy has been canceled – so long as the incident occurred
during the period in which coverage was in force. In effect, an occurrence policy offers permanent coverage
for incidents that occur during the policy period.
Punitive Damages at Trial in the United States
3
of policy). By purchasing insurance, companies can engage in risk transfer as follows:
Exchange a fixed loss at present (i.e., in the form of a premium) for a carrier’s promise to
bear an uncertain—and potentially greater—loss in the future (i.e., in the form of defense
costs and indemnity claims paid). In a fair and competitive marketplace, the carrier’s
promise at the heart of this bargained-for exchange can and will promote economic
growth11 and stability12; it also can be profitable, efficient, and self-enforcing for all
involved. Conversely, where inefficiencies, “unfairness” or “unreasonable” actions occur
regarding the promise (e.g., when the promise made is not the promise delivered),
litigation generally ensues, including litigation for “bad faith. 13”
The U.S.
parties in
insurance
dispute.15
10
11
12
13
14
15
is somewhat unique in that, like a criminal defendant in many countries 14,
different types of U.S. civil proceedings, including commercial disputes over
coverage, have the right to have a jury determine the outcome of their
Thus, just as a person accused of robbery has the right to have a jury of his
Claims-made policies provide coverage for claims only when BOTH the alleged incident AND the resulting
claim happen during the period the policy is in force. Claims made policies provide coverage so long as the
insured continues to pay premiums for the initial policy and any subsequent renewals. Each succeeding year
the policy is continuously renewed, the “coverage period” is extended. Once premiums stop the coverage
stops. Claims made to the insurance company after the coverage period ends will not be covered, even if the
alleged incident occurred while the policy was in force. A claims-made policy will cover claims after the
coverage period ONLY if the insured purchases extended reporting period or “tail” coverage. For an early
examination on claims made policies and their application to manufacturers and distributors, see Sol Kroll,
“Claims Made”—Industry’s Pay as You Go Products Liability Insurance, 637 INS. L.J. 63 (1976). For an
opportunity to compare the basis of “occurrence” policies in North America with the validity and
enforceability of “claims made” type policies in jurisdictions like Italy, see David Marino, Claims-made
clauses:
much-awaited Supreme Court judgment, INT’L L. OFF. (May 17, 2016),
http://www.internationallawoffice.com/Newsletters/Insurance/Italy/DLA-Piper-Italy/Claims-made-clausesmuch-awaited-Supreme-Court-judgment; and for an example from Switzerland, see Alexandra Bösch &
Markus Dörig, Supreme Court rules on liability policies and claims-made principle, INT’L L. OFF. (Jan. 19,
2016),
http://www.internationallawoffice.com/ Newsletters/Insurance/Switzerland/BADERTSCHERRechtsanwlte-AG/Supreme-Court-rules-on-liability-policies-and-claims-made-principle; and for an example
from Greece, see Konstantinos S. Issaias et al., Supreme Court interprets ‘claims made’ clauses, INT’L L.
OFF. (May 12, 2015), http://www.internationallawoffice.com/ Newsletters/Insurance/Greece/KG-Law-Firm/
Supreme-Court-interprets-claims-made-clauses.
There is empirical and anecdotal evidence that a robust insurance market is statistically correlated to
economic growth. See, e.g., Peter Haiss & Kjell Sümegi, The relationship between insurance and economic
growth in Europe: a theoretical and empirical analysis, 35 EMPIRICA 405 (2008); Marco Arena, Does
Insurance Market Activity Promote Economic Growth? A Cross ‐Country Study for Industrialized and
Developing Countries, 75 J. RISK & INS. 921 (2008); Damian Ward & Ralf Zurbruegg, Does Insurance
Promote Economic Growth? Evidence from OECD Countries, 67 J. RISK & INS. 489 (2000).
For the stabilizing impact of insurance on an economy after a catastrophe, see Howard Kunreuther, Reducing
Losses From Catastrophes: Role of Insurance and Other Policy Tools, 58 ENV’T: SCI. & POL’Y FOR
SUSTAINABLE DEV., Jan.–Feb. 2016, at 30; Porntida Poontirakul et al., The role of commercial insurance in
post-disaster recovery: Quantitative evidence from the 2011 Christchurch earthquake, (Victoria Univ. of
Wellington, Working Paper No. ISSN 2230-2603, 2016); Chia-Ling Ho, Ownership Structure and
Reinsurance Decisions: Evidence from the Property Casualty Insurance Industry in China, 49 CHINESE
ECON. 14 (2016). For the challenges with insurer instability and the economic repercussions, see GUILLAUME
PLANTIN & JEAN-CHARLES ROCHET, WHEN INSURERS GO BUST: AN ECONOMIC ANALYSIS OF THE ROLE
AND DESIGN OF PRUDENTIAL REGULATION (Princeton Univ. Press 2007).
BARRY R. OSTRAGER & THOMAS R. NEWMAN, HANDBOOK ON INSURANCE COVERAGE DISPUTES (15th ed.
2009).
Jury systems did in fact evolve in countries where common law was applicable and were less common in
countries following civil law. However, it is a common misconception that juries are a peculiarity of
common-law countries such as America and Britain. For example, citizens’ juries are widely used in Islamiclaw countries, too. Even in civil-law ones in continental Europe lay jurors preside alongside professional
judges where they act to help reach verdicts in serious criminal cases. See, e.g., WORLD JURY SYSTEMS
(Neil Vidmar ed., Oxford Univ. Press 2000); Brent T. White, Putting Aside the Rule of Law Myth:
Corruption and the Case for Juries in Emerging Democracies, 43 CORNELL INT’L L.J. 307 (2010).
For a comparative discussion, see Valerie P. Hans, Jury Systems Around the World, 4 ANN. REV. L. & SOC.
SCI. 275(2008); Ethan J. Leib, A Comparison of Criminal Jury Decision Rules in Democratic Countries, 5
4
Mark Van De Voorde , Joseph D. Jean, Colin T. Kemp & G. Allen Brandt
peers determine his guilt, a business sued for breach of contract as the right to have a jury
determine whether it, in fact, committed breach and, if so, then what might be the
appropriate remedy.16
Applying this to the insurance context under U.S. law, the insurer has a duty to act
reasonably17 and with proper justification when handling insurance claims policyholders
submit for coverage.18 If an insurer fails to do so—i.e., it acts unreasonably in denying
an insurance claim—it can be said to have acted in “bad faith. 19” Thus, insurance bad
faith litigation generally arises after an insurer denies a claim. The policyholder whose
claim is denied sues the insurer, alleging the insurer wrongly denied the claim in bad
faith20 (i.e., the insurer broke the promise in the bargained-for exchange of risk transfer).
If the policyholder proves bad faith, then—in a small percentage of the cases—it may
also be entitled to an award from the jury of exemplary (or “punitive”) damages—a
monetary award intended to punish21 and deter22 a wrongdoer.23 Empirical evidence
shows that the potential for an insurer to face a verdict for “bad faith” in resolving claims
reduces the likelihood that the claim is underpaid; in essence, the risk of a bad faith
judgment should work to increase the integrity of the insurance industry.24
But in-house counsel know that proving bad faith and demonstrating to a jury that your
company, as a policyholder, is entitled to punitive damages, is not easy. In fact, it is an
exceedingly rare outcome in U.S. courts, 25 and perhaps even more so in other countries. 26
OHIO ST. J. CRIM. L. 629 (2008); Nancy S. Marder, An Introduction to Comparative Jury Systems, 86 CHI.KENT. L. REV. 453 (2011).
Juries perform an essential duty to society. Any function so essential is also subject to criticism and
commentary. Mark Twain, the American humorist, commented, inter alia, that trial by jury may be “the
most ingenious and infallible agency for defeating justice that human wisdom could contrive.” MARK
TWAIN, ROUGHING IT 341 (Hartford, Conn., Am. Publ’g Co. 1873).
17
RANDY MANILOFF & JEFFREY STEMPEL, GENERAL LIABILITY INSURANCE COVERAGE: KEY ISSUES IN
EVERY STATE (3d ed. 2015) (providing a state by state perspective on U.S. law on the insurer’s obligations).
These duties or obligations are not unique to U.S. law and insurance carriers. For a discussion on similar
principles in the U.K., see Md. Yasin Khan Chowdhury, In Terms of Utmost Good Faith, the Law of
Insurance Imposes Strict Obligation on the Insured as Compared to the Insurer: A Literature Review (Nov.
2, 2014) (unpublished paper), http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2518069.
18
Throughout this article we use “policyholder” and “insured” synonymously and interchangeably to refer to
corporate entities, such as MNCs, that purchase insurance. Similarly, we use “insurance company,”
“insurer” and “carrier” synonymously and interchangeably to refer to corporate entities that sell and provide
insurance.
19
Compare the views in Alan O. Sykes, “Bad Faith” Breach of Contract by First-Party Insurers, 25 J.L. STUD.
405 (1996), with Richard B. Graves III, Comment, Bad Faith Denial of Insurance Claims: Whose Faith,
Whose Punishment? An Examination of Punitive Damages and Vicarious Liability, 65 Tulane L. Rev. 395
(199).
20
Coverage litigation between an insured and its insurer is nothing new. For an interesting analogy to coverage
litigation to literary dependency on the power of protection, see the opening discussion of how insurance can
be compared to King Lear and King Richard III in Tom Baker, Constructing the Insurance Relationship:
Sales Stories, Claims Stories, and Insurance Contract Damages, 72 TEX. L. REV. 1395 (1993).
21
Samuel A. Rea, Jr., Efficiency Implications of Penalties and Liquidated Damages, 13 J.L. STUD. 147 (1984).
22
For an open discussion of both sides of the deterrence argument, see Anthony J. Sebok, Normative Theories
of Punitive Damages: The Case of Deterrence, Philosophical Foundations of the Law of Torts (Cardozo
Legal Studies Research Paper No. 431, 2014).
23
Gary T. Schwartz, Deterrence and Punishment in the Common Law of Punitive Damages: A Comment, 133
S. CAL. L. REV. 56 (1982); David G. Owen, Punitive Damages Overview: Functions, Problems and Reform,
363 VILL. L. REV. 39 (1994). There also is a wide array of research on the issue, economics, and efficacy of
punitive damages. See, e.g., Gregory Klass, To Perform or Pay Damages, 98 VA. L. REV. 143 (2012).
24
Daniel P. Asmat & Sharon Tennyson, Does the Threat of Insurer Liability for “Bad Faith” Affect Insurance
Settlements?, 81 J. RISK & INS. 1 (2014); Daniel P. Asmat & Sharon Tennyson, The Law and Economics of
Insurance Bad Faith Liability, in RESEARCH HANDBOOK ON THE ECONOMICS OF INSURANCE LAW 413
(Daniel Schwarcz & Peter Siegelman eds. 2015).
25
The U.S. Department of Justice, Bureau of Justice Statistics, reports that in 2005, in the 12% of the 25,000
civil trials concluded to verdict where punitive damages were sought, punitive damages were awarded in
16
Punitive Damages at Trial in the United States
5
Indeed, in the U.S., punitive damages are something of a “white whale”—they are rarely
seen; one merely reads about them. The authors, however, have seen a white whale, in
the form of a jury’s verdict in a case they tried last year on behalf of Victaulic Company,
a manufacturer of mechanical pipe-joining solutions (e.g., fittings, couplings and
valves).27 The Victaulic lawsuit involved claims by Victaulic against its insurer that the
insurer did not act reasonably when handling insurance claims Victaulic submitted for
coverage under applicable insurance policies. After hearing four weeks of evidence, the
jury returned a verdict in favor of Victaulic totaling $55.3 million. 28 Most notably, of the
$55.3 million, $46 million was the jury’s punitive damages award.
Based in part on examples and insights from the Victaulic case, this article discusses
ideas for approaching and conducting a bad faith jury trial—that is, how to “catch the
white whale.” First, Section II outlines certain basic principles and obligations of the
bargained-for-exchange in an insurance contract. Section III focuses on the need for
policyholders to carefully review their existing policies and coverages. That is, how and
why policyholders (via their in-house counsel) should ensure they understand their
existing coverages, thereby hopefully preventing disputes with insurance companies in
the first place.29 Sections IV-VII, discuss some key steps in preparing for and
prosecuting a bad faith insurance jury trial, with each section offering specific ideas on
only 5% (700 of 14,359 trials) where the plaintiffs prevailed. U.S. DEP’T OF JUSTICE, PUNITIVE DAMAGE
AWARDS IN STATE COURTS, 2005 (2011), http://www.bjs.gov/content/pub/pdf/pdasc05.pdf. The legal
profession, including legal researchers, are not well known for embracing statistical and quantitative
methods, but the advent of the internet and other reporting mechanisms have made the probabilistic outcome
examination of damage awards significantly easier. In tort cases in state court, bench trials appear to be
slightly more likely to involve punitive damage awards at 3.9% of outcomes compared to jury trials at 2.9%
of outcomes. Michael Heise, Empirical analysis of civil litigation: Tort trials in state courts, in RESEARCH
HANDBOOK ON THE ECONOMICS OF TORTS 11 (Jennifer Arlen ed., 2013). Awards over $1 million USD
occurred in only 15.3% of this small sub-set of cases. For a detailed analysis on the statistical distribution of
large punitive awards and their correlation with natural disasters, see W. Kip Viscusi & Benjamin J.
McMichael, Shifting the Fat-Tailed Distribution of Blockbuster Punitive Damages Awards, 11 J. EMPIRICAL
LEGAL STUD. 350 (2014); For a California specific analysis over a defined time period, see J. CLARK KELSO
& KARI C. KELSO, AN ANALYSIS OF PUNITIVE DAMAGES IN CALIFORNIA COURTS, 1991–2000 (2001).
26
Saisiri Siriviriyakul, The Imposition of Punitive Damages: A Comparative Analysis, (2012) (J.S.D.
dissertation, University of Illinois at Urbana-Champaign), https://www.ideals.illinois.edu/bitstream/handle/
2142/32075/Siriviriyakul_Saisiri.pdf (with a comparative study on the implication of punitive damages in
other countries including, the United States, the United Kingdom, Australia, New Zealand, Canada,
Germany, Switzerland, France, Italy, Japan, Hong Kong, The People’s Republic of China and Thailand);
Adam Liptak, Foreign Courts Wary of U.S. Punitive Damages, N.Y. TIMES, Mar. 26, 2008, at A1 (discussing
the difficulties in enforcing a punitive judgement from the U.S. in foreign courts).
27
Victaulic Co. v. Am. Home Assurance Co., Case No. RG12642929 (Cal. Super. Ct.). Victaulic is the world’s
leading producer of mechanical pipe joining solutions and grooved pipe joining systems. Founded in 1915
and incorporated in New Jersey in 1919, during World War I, Victaulic created the “Victory Joint,” a
mechanical coupling that enabled the Allies to rapidly and reliably bring water and oil to troops at the
frontline. The Victory Joint played a significant role in the Allies’ victory. Today, Victaulic has a vast,
international manufacturing and distribution network, making 60 million products a year that are used in hot
and cold water systems, fire suppression systems mining oil and gas, compressed air and a variety of other
applications around the world. With products used in over 160 countries, there may be Victaulic products all
around you without you even knowing—they are in residential and commercial buildings; in sports stadiums
and events centers; and the complexes of the energy, transportation, military, education and healthcare
industries. For more about Victaulic Company, see http://www.victaulic.com.
28
The National Law Journal recognized it as one of its “top” verdicts of 2015. See Chart: The 2015 Top
Verdicts, NAT’L L.J. (Apr. 25, 2016), http://www.nationallawjournal.com/id=1202755502233/Chart-The2015-Top-Verdicts?slreturn=20160509155647.
29
For an additional practical perspective of the types of things General Counsel should be on the watch for with
their insurance carrier’s handling of their claims, see DAVID SKIPTON, THE CLAIMS GAME: THE TRICKS AND
DECEPTIVE TACTICS INSURANCE COMPANIES USE TO UNDERPAY OR DENY YOUR CLAIM (2015).
6
Mark Van De Voorde , Joseph D. Jean, Colin T. Kemp & G. Allen Brandt
how one might develop and present evidence to a U.S. jury in a bad faith case. 30 The
article concludes with Section VIII highlighting the importance of in-house counsel’s
involvement in and knowledge of their company’s insurance program and, if and when
the time comes, the insurance coverage trial.
II.
The Insurance Contract: a Bargained-for Exchange.
In basic legal terms, an insurance policy is a bargained-for exchange—a contract.31
While this principle is largely the same across the globe 32, in the specific context of U.S.
liability insurance,33 the following describes the exchange: The policyholder pays
premiums to the insurer34; in return, the insurer makes two related promises 35—(i) to
defend the policyholder against potentially covered claims (e.g., lawsuits) alleging the
policyholder’s conduct or products caused harm or damage, and, (ii) to pay for
settlements or judgments awarded against the policyholder in connection with covered
claims.36 Because of the well-recognized fact that insurers generally enjoy a stronger
position in contract negotiations, U.S. case law and regulations generally favor and
protect policyholders (e.g., insurance policies are generally construed in favor of finding
a coverage for a claim).37
These two duties—to defend and to indemnify—are viewed by MNCs and their in-house
counsel as the essential terms of the bargained-for exchange: the carrier’s promise to
defend and promise to indemnify. Like all contracts, there are a variety of other
important provisions that impact these duties (particularly the exclusions 38), and as
30
31
32
33
34
35
36
37
38
While this article is written from the policyholder’s perspective, it is not written for policyholders. Rather,
the authors are agnostic as to the reader’s perspective. Indeed, the insurer can derive great value from the
teachings in these pages, perhaps more so than the policyholder.
JEFFREY W. STEMPEL, INTERPRETATION OF INSURANCE CONTRACTS: LAW AND STRATEGY FOR INSURERS
AND POLICY HOLDERS (1994); Leah Wortham, The Economics of Insurance Classification: The Sound of
One Invisible Hand Clapping, 47 OHIO ST. L.J. 835 (1986) (noting the relative “unfairness” in policy pricing
across different groups for the same degree of “coverage”).
See Mark J. Browne, et al., International Property-Liability Insurance Consumption, 67 J. RISK & INS. 73
(2000); Chao-Chun Leng & Ursula B. Meier, Analysis of Multinational Underwriting Cycles in PropertyLiability Insurance, 7 J. RISK FIN. 146 (2006).
Although very similar to the U.S., and driven by insurance industry consolidation, insurance contracts in the
U.S. can differ dramatically across the member states. See Jürgen Basedow, Towards a European Insurance
Contract Law? The Commission Expert Group, its Antecedents and Consequences, 20 CONTRATTO E
IMPRESA/EUROPA 1 (2015).
To achieve success in the policyholder / insurer relationship, both parties must understand the risks in
question—what is the policyholder’s business; how it works; the dangers, problems, and risks (big and
small, remote and common); and so on. The policyholder and insurer must also understand and price the
insurer’s promise—in what circumstances must the insurer respond, and what will that cost in premiums?
But it must be remembered that the “promise” is found in the insurance contract. Put differently, simply
because a policyholder suffers a loss, it does not necessarily mean an insurer’s obligations under the
applicable policy(ies) has been triggered.
This contracting relationship is generally known as first party insurance or first party coverage. For a good
explanation of the law and economics of insurance using two contrasting islands with different types of
insurance coverage (one only with first party coverage and the other only with third party coverage), see
Ronen Avraham, The Economics of Insurance Law—A Primer, 29 CONN. INS. L.J. 19 (2012).
Mark A. Geistfeld, Interpreting the Rules of Insurance Contract Interpretation 68 RUTGERS UNIV. L. REV.
371 (2015) (noting that the plain meaning of a policy term can be the product of insurer practices that exploit
policyholders who do not read or otherwise adequately understand the contract. Departing from the plain
meaning of a term, therefore, yields interpretations that can provide the amount of coverage that would be
expected by policyholders if they were well informed — the principle of reasonable expectations); see also
Andrew Taylor, A Comparative Analysis of US and English Contract Law Interpretation and Implied Terms,
9 INT’L IN-HOUSE COUNS. J. 1 (2015).
The exclusion language is often a matter of dispute in a variety of cases involving, inter alia, construction
defects, product liability, mold, asbestos, pollution, and other items. This can actually place the defense of
the underlying liability case at odds with the efforts to obtain insurance coverage. For an introduction, see
Ellen S. Pryor, The Economic Loss Rule and Liability Insurance, 48 ARIZ. L. REV. 905 (2006); Clifford J.
Punitive Damages at Trial in the United States
7
discussed in the next section, in-house counsel and others involved in risk-management
must have a thorough grasp on the insurance contract, the case law, and their insurer’s
business practices.
III.
The Fine Print: The Importance of Understanding the Coverage Your
Policies Provide.
While this article focuses primarily on the coverage litigation, it is important for in-house
counsel to advise its management team and the company—the corporate policyholder—
on understanding the scope of coverage its insurance policies provide. Quite simply, a
prudent and responsible business should know how it is 39 (and is not) protected by its
insurance.40 From this point forward, this article utilizes some select examples from the
Victaulic litigation to provide the framework for a more detailed discussion of some key
issues for in-house counsel.
As with all MNCs, Victaulic faces both business-specific and systematic risks. Even
recognizing that Victaulic products have an extremely low rate of failure 41, the products
are ubiquitous and are deployed in a wide array of applications world-wide.
Consequently even the very rare product failure may be statistically unavoidable and
could lead to an alleged loss and thus a claim being brought against the company,
potentially triggering coverage under the insurance policies. Product liability and product
defect litigation are not unique to North America, but it is far more prolific than in the
rest of the world.42
As a responsible company and to protect itself against these types of claims, Victaulic
maintains a robust insurance program with over $1 billion in coverage per year. 43 For the
years 2000 to 2012, of that over $1 billion in coverage, the insurer and its member
companies provided over $340 million of Victaulic’s primary and excess coverage.
39
40
41
42
43
Shapiro, Point/Counterpoint: Inadvertent Construction Defects Are an “Occurrence” Under CGL Policies,
22 CONSTR. LAW. 13 (2002).
David Mayers & Clifford W. Smith Jr., On the Corporate Demand for Insurance, in FOUNDATIONS OF
INSURANCE ECONOMICS 190 (Georges Dionne & Scott E. Harrington eds., 1982).
It is, of course, equally important for insurers to know precisely what they cover under their policies. In a
perfect world, there is complete harmony between what the parties believe is and is not covered by a given
policy. The extent of “coverage litigation” (disputes over whether a given claim is covered or not) in the US
is one indication of the lack of such harmony.
This is due to high standards in Victaulic’s manufacturing and quality control (a point emphasized at trial).
Mathias Reimann, Product liability, in COMPARATIVE TORT LAW: GLOBAL PERSPECTIVES 250 (Mauro
Bussani & Anthony J. Sebok eds., 2015) (utilizing reports and articles from forty-five countries on the
number of cases filed each year).
MNCs like Victaulic generally have three layers or types of liability policies: primary; excess; and umbrella
policies. The primary policy provides the insurer’s “duty to defend” the insured against claims that, if
proven, then trigger a “duty to indemnify” (i.e., the obligation to pay covered claim against the insured). The
excess or umbrella insurers supplement the dollar amount of coverage afforded by primary policies by
providing coverage above the limits of the primary coverage. This additional coverage is typically in several
successively higher layers of coverage. Excess or umbrella insurers may have obligations to defend the
insured or to pay defense costs, depending on the particular language in the policy and the governing law.
8
Mark Van De Voorde , Joseph D. Jean, Colin T. Kemp & G. Allen Brandt
At least, Victaulic believed that it has purchased $340 million worth of coverage from the
insurer in exchange for its premium payments. Instead, after a strong 20-plus year
business relationship, things suddenly changed. In 2012, the insurer advanced an
interpretation of the insurance policies that, if applicable and enforceable, would have
precluded coverage for products liability claims against Victaulic. Without any prior
notice or even the courtesy of a business discussion, the insurer then took the
extraordinary and proactive step of suing Victaulic in U.S. court, asking the judge to
declare that the policies did not, in fact, require the insurer to defend Victaulic against
product liability claims. In short, the insurer wanted to revoke its promise.
In-house counsel in any jurisdiction are likely to think that this interpretation of the
bargained-for-exchange and the insurance contract might be somewhat surprising.
Indeed, a MNC purchases liability insurance specifically for protection against the
financial impact of product liability claims. Victaulic’s coverage had, until 2012, been no
exception: The insurer had covered these sorts of claims for years, defending Victaulic
when it was sued for damages and paying settlements and judgment accordingly.
In the U.S., insurers and the insured generally have the legal right to seek a declaration as
to the interpretation of the insurance contract. 44 As explained below, the insurer’s legal
basis and business reasons for how and why it sought the declaration might be open to
question, but it sought a declaration as to its “promise” nonetheless. While cases like the
Victaulic example may not be entirely avoidable, the very emergence of the disagreement
over coverage highlights an important lesson: in-house counsel and its policyholders
must review and analyze their insurance policies to ensure they know and understand the
coverages provided, as well as the coverages not provided, and any gaps in and limits of
coverage. The importance of this exercise grows with the MNC’s risk profile, including
the global proliferation of the products, platform and operations. The exercise needs to
be annual, and in advance of the actual policy renewal process to ensure the MNC’s
insurance program continues to meet the potential needs and risks.
IV. U.S. Insurance Jurisprudence.
Si vis pacem, para bellum is a Latin adage translated as, "If you want peace, prepare for
war."45 Even the well-advised and prepared in-house counsel with a deep, clear
understanding of their MNC’s coverages cannot always avoid the fatal terrain of
litigation. To be truly prepared also requires a basic understanding of U.S. insurance
recovery jurisprudence and what actually happens in insurance litigation. This section
provides the fundamentals for such an understanding, including preparing for the
eventuality of an insurance bad faith case.
A. Basic Principles.
When a claim against the policyholder is first made (e.g., when it is sued by a third
party), the policyholder must provide notice to the insurer under any insurance policy that
could potentially be implicated and should do so promptly to preempt any argument by
the insurer that the policyholder did not provide proper notice. 46 Depending on the size
and nature of the claim, it may be worthwhile to seek advice from outside insurance
coverage counsel to assist in navigating what is often a complicated and confusing
44
Samuel L. Bray, The Myth of the Mild Declaratory Judgment, 63 DUKE L.J. 1091 (2014).
Plato, 1 Laws sec. 628, available at http://www.perseus.tufts.edu/hopper/text?doc=Perseus
%3Atext%3A1999.01.0166%3Abook%3D1%3Apage%3D628.
46
This “notice requirement” is an express contractual obligation under most liability policies. For a general
discussion on this, see Tom Baker & Kyle D. Logue, Mandatory Rules and Default Rules in Insurance
Contracts (Univ. of Penn. Faculty Scholarship Paper No. 582, 2015), http://scholarship.law.upenn.edu/
faculty_scholarship/582, and BARRY R. OSTRAGER & THOMAS R. NEWMAN, HANDBOOK ON INSURANCE
COVERAGE DISPUTES (15th ed. 2009).
45
Punitive Damages at Trial in the United States
9
process and thereby maximize recovery. Moreover, because the attorney-client privilege
protects confidential communications between and attorney and the client, engaging
counsel will allow for the full and frank exchange of information between attorney and
client, without the risk of discovery by others. 47 Conversations with the insurance broker
do not receive the same protection, and can be a trap for unwary in-house counsel in the
event that these early conversations are not privileged and then disclosed during
litigation.
If the insurer refuses to defend against or cover the claim after submission, the
policyholder is faced with several options. First, it might consider trying to resolve the
claim outside of litigation. This might involve direct conversations and negotiations
between the policyholder and insurance company – an area where retaining coverage
counsel is invaluable. It might also involve a process of alternative dispute resolution,
such as mediation or arbitration. In fact, some insurance policies purport to require
policyholder and insurer to engage in one of these processes before either party is
allowed to file suit. If the parties fail to resolve the dispute, the policyholder should
consider litigation.
In the U.S., insurance disputes arise under and are governed by state law, 48 just as
insurance law and regulation is unique to each E.U. member state. 49 So, while there are
narrow circumstances in which an insurance case can be brought in a U.S. (federal)
district court, most insurance cases are brought in state court. Regardless of whether the
case is brought in federal or state court, in all instances the substantive law of one of the
fifty U.S. states will govern the dispute.
The importance of this “governing law” issue cannot be overstated—it is critically
important. This is because state laws can vary, sometimes dramatically. The laws of
some states strongly favor policyholders, while other states’ laws tend to favor insurers. 50
Some states have a robust body of bad faith law; in sharp contrast, other states do not
even allow a policyholder to bring a bad faith claim, no matter how egregious the conduct
in question.51 Quite simply, which state law applies or which “jurisdiction” you are in
can have dramatic consequences.52
47
See FED. R. EVID. 501, 502; see also, e.g., CAL. EVID. CODE § 912.
The U.S. Constitution provides only a limited set of areas in which Congress may pass laws. U.S. CONST.
art. I & amend. X. Thus, there is no federal law of contracts applicable to insurance disputes. See, e.g., 15
U.S.C. § 1012.
49
EUROPEAN COMM’N, FINAL REPORT OF THE COMMISSION EXPERT GROUP ON EUROPEAN INSURANCE
CONTRACT LAW (2014) (a report examining the impact of differences between national contract laws on
cross-border insurance business under the freedom to provide services and the freedom of establishment),
http://ec.europa.eu/justice/contract/files/expert_groups/insurance/final_report.pdf.
50
Richard D. Milone et al., It’s Only Forum Shopping When It’s Coming From the Other Side! Sparring Over
Forum Selection in Insurance Coverage Actions 1-2 (Am. Bar Ass’n, Mar. 3, 2015),
http://www.americanbar.org/content/dam/aba/administrative/litigation/materials/2015_inscle_materials/
written_materials/
13_1_its_only_forum_shopping_when_its_coming_from_the_other_side.authcheckdam.pdf.
51
And in what is a significant departure from the “American Rule” (i.e., that all litigants bear their own costs),
some states allow a policyholder to recover its attorney’s fees if they prove bad faith. ROBERT H. JERRY II &
DOUGLAS S. RICHMOND, UNDERSTANDING INSURANCE LAW 161 (2d ed. 1996); see United Policyholders, 50
State Survey of Bad Faith Laws and Remedies (Oct. 23, 2014), http://uphelp.org/sites/default/files/
publications/Final%20-%20Bad%20Faith%20Survey.pdf .
52
This is particularly true in North America, and some U.S. states and Canada are leading the way to reforms.
See Qifu Li, What America Can Learn from Canada’s Progressive Decision in Commercial General
Liability Policy Coverage Litigation over Construction Defects, 23 CARDOZO J. INT’L & COMP. L. 165
(2014); Poss & Halfnight, Duty to defend: getting to the true nature of the claim, INT’L L. OFF. (Aug. 7,
2001),
http://www.internationallawoffice.com/Newsletters/Insurance/Canada/Poss-Halfnight/Duty-toDefend-Getting-to-the-True-Nature-of-the-Claim (analyzing Canadian Supreme Court decisions clarifying
the broad scope of the duty triggers in Canada); Hartley Lefton, Ontario courts interpret insurers’ ‘duty to
48
10
Mark Van De Voorde , Joseph D. Jean, Colin T. Kemp & G. Allen Brandt
Coverage litigation involving CGL policies (such as the Victaulic litigation) often
concerns one or both of the core duties of the insurer outlined above: the duty to defend
(i.e., if the policyholder is sued, the duty to handle the defense);53 and, the duty to
indemnify (i.e., the duty to pay settlements of and judgments for covered claims). Most
U.S. courts hold that the duty to defend is broader than the duty to indemnify and is
implicated so long as there is potential for coverage.54 To determine if there is the
“potential for coverage,” courts will compare the allegations in the underlying complaint
against the policy’s coverage obligations. As long as one cause of action in the
underlying litigation potentially falls within coverage, then the insurance company’s duty
to defend is triggered. Triggering the duty to defend does not necessarily mean the claim
or claims will be indemnified. The duty to indemnify—to reimburse the policyholder for
the money it spends in resolving the underlying litigation, which could be by a settlement
or by a judgment—is narrower and will be evaluated to ensure that the policy provides
coverage for that type of loss.55
B. Organizing Your Insurance Bad Faith Litigation.
The “jury instructions” are the single most effective tool for not only outlining your bad
faith claim but for also organizing your case and the evidence necessary to win. The jury
instructions are just that—the instructions that, if a case goes to trial, the judge reads to
the jury to inform them of the law and the rules 56 that they must follow when deciding a
case.57 Jury instructions succinctly set forth the specific jurisdictional rules that
determine coverage and other insurance issues. By reviewing the jury instructions early
and often, the policyholder can determine what ultimately needs to be proved at trial and
focus time and effort accordingly.
In California, where the Victaulic case was tried, the jury instructions on bad faith are
very clear. For example, Judicial Council of California Civil Jury Instruction (“CACI”)
2336 provides that proving bad faith requires, among other things, the following: (i) the
insurer must have unreasonably or without proper cause failed to defend the policyholder;
(ii) the policyholder was harmed; and (iii) the insurer’s failure to defend was a substantial
53
54
55
56
57
defend,’ INT’L L. OFF. (Nov. 10, 2010), http://www.internationallawoffice.com/Newsletters/Insurance/
Canada/Lang-Michener-LLP/Ontario-courts-interpret-insurers-duty-to-defend (contrasting two Canadian
cases on the trigger of the duty).
The reader will not be surprised to learn that the obligations the “duty to defend” imposes on the insurer can
vary from state to state. Suffice it to say, however, the duty requires, among other things, the appointment of
counsel, the payment of defense costs, oversight and management of the claim (including assistance with
experts, settlement and, if necessary, trial). See, e.g., 22-136 APPLEMAN ON INSURANCE LAW & PRACTICE
ARCHIVE § 136.1 (2d 2011); see also ROBERT E. KEETON & ALAN I. WIDISS, INSURANCE LAW: A GUILD TO
FUNDAMENTAL PRINCIPLES, LEGAL DOCTRINES AND COMMERCIAL PRACTICES 988–95 (1988).
See, e.g., Scottsdale Ins. Co. v. MV Transp., 36 Cal. 4th 643, 654 (2005) (insurer’s duty to defend triggered
when the facts alleged in the complaint create a potential for coverage).
Emphasizing the importance of a clear understanding of your coverages, it bears ensuring the following is
clear: The carrier’s “promise” is, in fact, the policy language. The promise is to defend potentially covered
and covered claims and indemnify for covered claims. This article is not anti-insurer, and it would be
improper for policyholders to read the insurer’s promise to be more than it is. Quite simply, an insurer does
not breach an insurance policy by refusing to cover a loss the policy does not require it to cover.
The jury instructions also explain the policyholder’s burden of proof for punitive damages: “Malice,
oppression or fraud” must be proved by “clear and convincing” evidence. This is a higher standard than the
customary “preponderance of the evidence” standard, which merely requires the jury to find something
“more likely than not” (i.e., 50.1% likely).
Each member of the jury must follow the judge’s instructions. In fact, in the process known as voir dire or
jury selection, potential jurors are questioned by the judge and trial counsel to determine if they would be an
appropriate juror for the given case. It is always made clear that jurors will be required to follow the judge’s
instructions; if the court or counsel identified that a prospective juror will not follow the judge’s instructions,
then he may not serve on the jury.
Punitive Damages at Trial in the United States
11
factor in causing the policyholder harm.58 Instructions such as CACI 2336 can guide the
distillation of the key question for the case: How does the policyholder show the insurer
was unreasonable and prove harm?
Jury instructions also provide the essential roadmap for proving punitive damages. In
California, CACI 3946 is the policyholder’s guide. It states that an officer, director, or
managing agent of the insurer must have acted with “malice, oppression or fraud,” which
the instruction defines as including “despicable conduct.” Despicable conduct is not a
mere disagreement about coverage, or even an arbitrary decision from the insurer
denying coverage because an adjuster did not feel like paying. Rather, it is a failure to
pay the claim with the intent to do harm to the policyholder. Thus, the instruction
describes the type of evidence one must pursue and obtain in discovery.
C. The Evidence “Tiers:” Breach of Contract, Bad Faith and Punitive Damages.
To make sense of the varying standards that apply in bad faith cases, it is useful to think
of the evidence necessary to prevail in terms of “tiers.” An insurance bad faith case is, at
its core, a breach of contract case: The insurer did not do something it was required to do
under the insurance policy (such as provide coverage for a given claim). This bottom
“tier” is satisfied if the preponderance of the evidence demonstrates: (i) a contract exists,
(ii) it was breached and (iii) the policyholder was damaged.59
At the next “tier” is the evidence necessary to prove bad faith. As CACI 2336 instructs,
bad faith requires proof that the insurer’s breach was unreasonable. This is more than the
insurer merely failing to do something required under the policy. But what does that
mean? Here again, the instructions provide important guidance. CACI 2337 lays out a
plethora of factors the jury can consider to make that determination, including whether
the insurer failed to respond reasonably promptly, made unreasonable demands, failed to
settle the claim for a reasonable amount or required the policyholder to sue for coverage.
The third and final tier is the evidence necessary to prove punitive damages. This tier
requires evidence of “malice, fraud or oppression,” which CACI 3946 defines as conduct
a reasonable person would conclude is “despicable,” “base” and “vile.”
The “tier” approach also makes sense when we consider the potential damages a U.S.
jury can award the successful policyholder. First, for breach of contract, the jury award
generally will puts the policyholder in the position it would have been in but for the
breach, which often is not a dramatic recovery. 60 Second, to the policyholder prevailing
in a bad faith case, the jury may—in certain jurisdictions—be permitted to award the
costs of bringing the lawsuit to secure coverage, including attorney’s fees. 61 Such an
58
59
60
61
The Judicial Council of California, comprised of California judge and justices, professors of law and
distinguished practitioners, review, propose and approve the award winning and plain-English CACI
(pronounced “Casey”) instructions. Most California judges will use nothing but CACI instructions at trial,
which contain instructions for virtually every procedural and substantive issue that might arise during civil
trials in California. See Civil Jury Instructions Resource Center, CAL. COURTS: JUDICIAL BRANCH OF CAL.,
http://www.courts.ca.gov/partners/311.htm (last visited June 9, 2016). The Judicial Council also has issued
the “CALCRIM” series of instructions, which are the analogous gold standard instructions for criminal trials
in California. See Criminal Jury Instructions Resource Center, CAL. COURTS: JUDICIAL BRANCH OF CAL.,
http://www.courts.ca.gov/partners/312.htm (last visited June 9, 2016).
See, e.g., Judicial Council of California Civil Jury Instructions CACI 303 (Breach of Contract—Essential
Factual Elements) (2016), http://www.courts.ca.gov/partners/documents/caci-2016-complete-edition.pdf.
See, e.g., Judicial Council of California Civil Jury Instructions CACI 350 (Introduction to Contract Damages)
(2016), http://www.courts.ca.gov/partners/documents/caci-2016-complete-edition.pdf (explaining that “[t]he
purpose of such damages is to put [name of plaintiff] in as good a position as [he/she/it] would have been if
[name of defendant] had performed as promised.”).
See, e.g., Brandt v. Superior Court, 37 Cal. 3d 813, 815 (1985) (holding that, under California law, attorney’s
fees—reasonably incurred to compel the insurer’s payment of the policy benefits—are recoverable as an
element of the damages resulting from the insurer’s tortious conduct).
12
Mark Van De Voorde , Joseph D. Jean, Colin T. Kemp & G. Allen Brandt
“attorney’s fee award” is a marked departure from U.S. tradition: Unlike many other
countries, the U.S. follows (unsurprisingly) the “American Rule,” under which parties
pay their own attorneys’ fees, regardless of whether they win or lose at trial. Therefore,
attorney’s fee awards necessarily are the exception to the traditional rule. Nevertheless,
attorney’s fee awards rarely are windfalls; after all, the policyholder is, at most, simply
repaid what it already paid its attorneys. Third and finally, for malicious, fraudulent or
oppressive conduct—that is, for punitive damages—a jury can award the policyholder the
amount to punish the insurer. Thus, each increasing “tier” of evidence corresponds to the
increasing potential recovery.62 This, of course, makes sense: The more culpable the
conduct, the greater the potential recovery; or, put differently, a more significant award
must be supported by more significant evidence of wrongdoing.
V.
The Discovery Process: To Build—Not Hide—the Evidence.
There is no shortage of scholarly work on the good, the bad and the ugly of the discovery
process,63 or how the process should ideally work in today’s digital age. 64 But we are not
here to write a Magna Carta65 on discovery; rather, as concerns preparing to win at trial,
the section simply highlights three key points in-house counsel must appreciate about the
discovery process: (i) parties are obligated to act truthfully in the discovery process and
in accordance with two fundamental ethical obligations (i.e., the duty not to suppress
evidence and the duty of candor); (ii) there are dire consequences of noncompliance with
the discovery obligations; and (iii) success in the discovery process is essential to success
at trial. In the final analysis, if the discovery process is undertaken with anything less
than complete attention and honesty, or if it is misused, then a party may be sanctioned. 66
Without diminishing the deleteriousness of sanctions, however, perhaps the greatest harm
to a policyholder that discovery abuse would cause is not a “remedy” or “rule” expressed
in statutes and regulations: Destruction of credibility.
In U.S. legal proceedings, “discovery” is the process by which parties demand, produce
and exchange information (such as document and sworn pre-trial (deposition) witness
testimony). Discovery can be time-consuming and tedious. Given the enormous number
of paper and electronic documents in an insurance coverage dispute, it also can be
expensive. Many MNCs might pressure in-house counsel to cut corners for budgetary
reasons. Reject those efforts—the discovery rules and their ethical obligations cannot be
62
63
64
65
66
In California, entitlement to punitive damages must be shown by clear and convincing evidence which is a
higher burden of proof than the preponderance of the evidence standard mentioned previously. The laws
across the U.S. and internationally differs and must be carefully reviewed at the outset.
See, e.g., William Hopwood et al., Fighting Discovery Abuse in Litigation, 6 J. FORENSIC & INVESTIGATIVE
ACCT. 52 (2014). And there are entire “benchbooks” (i.e., resources written by judges for judges) devoted to
the management and oversight of the discovery process. See, e.g., CALIFORNIA JUDGES BENCHBOOK, CIVIL
PROCEEDINGS—DISCOVERY (2d ed. 2015); see also JUDICIAL COUNCIL OF CAL., CAL. CTR. FOR JUDICIAL
EDUC. & RESEARCH, CALIFORNIA JUDGES BENCHBOOK, BENCHGUIDE 3, COURTROOM CONTROL:
CONTEMPT AND SANCTIONS (rev. 2010).
See, e.g., Scott A. Moss, Litigation Discovery Cannot be Optimal But Could be Better: The Economics of
Improving Discovery Timing in a Digital Age, 58 DUKE L.J. 889 (2009); Betsy Barry et al., The Big ESI:
Going from Big to Better in E-discovery, 10 I/S: J.L. & POL’Y FOR INFORMATION SOC’Y 721 (2015).
The Archbishop of Canterbury drafted the original Magna Carta (Latin: “The Great Charter”) to bring peace
to England and, in particular, between the unpopular King John of England and a group of land barons. See,
e.g., DANNY DANZIGER & JOHN GILLINGHAM, 1215: THE YEAR OF MAGNA CARTA (2003).
For a discussion and examples of actions and remedies when one party abuses the attorney-client privilege
during discovery, see Steven Susser, Abuse of Privilege: Withholding “Privileged” Documents, Mar. 2012,
MICH. BAR J., at 26. In California, section 2023.010 of the Code of Civil Procedure outlines various
“misuses” of the discovery process that are sanctionable, including causing “undue burden and expense,”
asserting “unmeritorious objections,” and answering with “evasive responses.” These penalties range from
monetary sanctions (compensating the aggrieved party for the time spent forcing the other side to fulfill its
obligations) all the way to terminating sanctions (ending the case with a judgment for the aggrieved party)
and contempt of court.
Punitive Damages at Trial in the United States
13
ignored.67 Moreover, the discovery process is the tool for amassing the evidence
necessary for scaling each evidentiary “tier” of the case, as outlined in Section IV.C.,
above.
Corner-cutting would reflect an error in judgment about how to approach the discovery
process. It would also be an error in judgment to believe in-house counsel need not have
a role in discovery. To the contrary, in-house counsel will know their company’s records
systems and persons with relevant information, and understand the company’s operations
(and bureaucracies and politics). Quite simply, they will know how to get things done,
and efficiently. And when it comes to the sources and location and accuracy of relevant
information, in-house counsel know how important it is to use their intuition: If
something does not “feel” right (e.g., because records appear missing, because a
document production seems smaller than it should, or because written discovery
responses do not capture information properly or worse), then it probably is not right.
Explore these issues with focused determination. As we are about to read, your client’s,
your trial counsel’s and your credibility (i.e., the case) depend on it.
There are two examples from the Victaulic litigation that are instructive to in-house
counsel on how the misuse of the discovery process can create problematic and
potentially devastating issues in coverage litigation. In the first example, the insurer
redacted (i.e., covered up) a portion of an email exchange between several employees
and, on its privilege log68, explained the redacted information was simply “irrelevant.”
That designation—standing alone—is not remarkable or necessarily improper.
As it came out, however, the “cover-up” was worse than “the crime.” The redacted text
was, in fact, highly relevant to the parties’ dispute. Concerned with the reliability of the
insurer’s approach to its discovery obligations, the court appointed a Special Master69 to
review each and every document the insurer withheld and identified on the privilege log.
After a thorough and impartial review, the Special Master determined that 37% of the
documents the insurer withheld should have been produced, resulting in the insurer’s
production of over 600 pages of additional evidence, some of which became critical trial
exhibits that turned out to be detrimental to the insurer.
The second example concerns a common discovery device, requests for admissions
(“RFAs”). RFAs are intended to streamline litigation, whereby one party asks the other
to admit—under oath and subject to penalty of perjury—certain facts or other
information.70 Victaulic submitted RFAs to the insurer, with one of the requests directed
67
68
69
70
For more on the means and methods of challenging another parties’ discovery responses, see William
Hopwood et al., supra note 63.
Federal Rule of Civil Procedure 26(b)(5) states that a party withholding otherwise discoverable material
under a claim that it is privileged must describe the nature of the documents in a manner that, without
revealing information that is itself privileged, will enable other parties to assess the claim. To comply with
Rule 26(b)(5), a privilege log typically describes basic information about each document including the date,
author and all recipients (along with their capacities), subject matter, and an explanation for why it is
privileged. The question of what documents are in fact privileged in insurance bad faith litigation has become
an active area of the litigation process, and as such, an area of examination by commentators. See Steven
Plitt & Joshua D. Rodgers, The Battle to Define the Scope of Attorney-Client Privilege in the Context of
Insurance Company Bad Faith: A Judicial War Zone, 14 UNIV. N.H. L. REV. 105 (2015).
Compare CAL. R. PROF. CONDUCT 5-200 (Duty of Candor), 5-220 (Duty Not to Suppress Evidence) with
International Bar Association, IBA International Principles on Conduct for the Legal Profession 16 (May 28,
2011) (“A lawyer shall at all times maintain the highest standards of honesty integrity and fairness towards
the lawyer’s clients, the court, colleagues and all those with whom the lawyer comes into professional
contact.”).
See, e.g., FED. R. CIV. P. 33.
14
Mark Van De Voorde , Joseph D. Jean, Colin T. Kemp & G. Allen Brandt
to an important evidentiary issue: that there was an “occurrence” (i.e., an accident)
during the policy period.71 In response, the insurer denied the “occurrence” RFA.
In discovery, however, Victaulic obtained a document demonstrating that the insurer had,
in fact, internally concluded that there was an “occurrence,”72 and had reached that
conclusion months before submitting the sworn RFA denial. Exacerbating the
inconsistency, the very same person who had concluded for the insurer that there was an
“occurrence” also verified the RFA denials under oath. When pressed on crossexamination how she could possibly have verified the denials when she knew they were
untrue, the insurer’s employee had only one explanation: when preparing the insurer’s
RFA denial, the insurer’s lawyers told her the “facts don’t matter in this litigation.”
Gasps echoed throughout the courtroom, including in the jury box, following the
insurer’s startling admission. The next day of trial, that witness uttered five words you
would never want hear from your own witness: “I plead the Fifth Amendment.” 73
For in-house counsel and their MNC clients that view discovery as an expensive
nuisance, these two examples should be instructive for teaching the error of such a view.
But the costs of not engaging in comprehensive and thoughtful discovery are even
greater. Monetary sanctions can be high, but a loss of credibility with the court or with
the jury can lose the entire case. Discovery can be managed. Knowing each tier of proof
is the first step to prioritizing discovery. Again, start with the law and the jury
instructions. What evidence do you need? Where is it? Then, determine what is missing
and go after it with more discovery requests and discovery motions. Success at trial will
require success, beforehand, in discovery.
VI. Preparing for Trial: Developing Your Themes and Theories.
Treatises, seminars and articles overflow with advice on trial strategies. In-house counsel
know that most MNCs prefer to avoid trial, and if this is not possible, there should be a
compelling reason for the costs and distractions of complex litigation. Explaining the
compelling reason to the Board and the management team is often not so dissimilar to
presenting the trial theme and theory to a judge or jury. In a single, unified narrative, inhouse counsel needs to be able to articulate the theme and theory of the case. The theme
is a short, powerful phrase that evokes an emotion and connects the listener to the case. A
theory is more complicated. It is the explanation that connects everything—all the
exhibits, all the trial testimony, all the argument—together. The inability to put together
a cohesive, yet simple, reason or explanation would be fatal in a management meeting or
the boardroom; life is no easier in the courtroom.
71
Common CGL wording provides that the insurer will pay those sums that the insured becomes ‘‘legally
obligated to pay’’ as damages because of ‘‘bodily injury’’ or ‘‘property damage’’ caused by an
‘‘occurrence.’’ CGL wordings also obligate the insurer to defend its insured against any suit seeking such
damages. An ‘‘occurrence’’ is commonly defined as an ‘‘accident, including continuous or repeated exposure
to substantially the same general harmful conditions.’’ CGL policies do not define ‘‘accident,’’ or the
specific attributes of an ‘‘accident’’ in the construction context, thereby leaving more precise definition to the
courts, which have issued diverse pronouncements.
72
There are even debates as to whether there is one or more occurrence. That determination is not always easy
or straightforward. Disagreements about how many occurrences there were can arise, e.g., where the facts
present numerous causes; where the insured committed numerous tortious acts; where there are numerous
claimants, events occurring over several consecutive policy periods, or multiple layers of coverage; or some
combination of all of the above. For a detailed discussion on this topic, see Tred Eyerly et al., Determining
the Number of Occurrences and its Impact on Coverage (Feb. 20, 2016) (unpublished paper),
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2734437.
73
The Fifth Amendment to the United States Constitution provides that a person cannot be compelled to
incriminate themselves. Thus, a witness cannot be forced to admit to a crime such as perjury (lying under
oath). A witness “taking the Fifth” in criminal cases is common for obvious reasons. But it is exceeding rare
in US civil cases.
Punitive Damages at Trial in the United States
15
In the Victaulic litigation, the theme was “broken promises.” To set that up, the trial
team first explained “insurance 101” to the jury—that insurance companies are in the
business of selling promises; that insurance companies take money in the form of
premiums and, in return, insurers promise that they will protect the policyholder in the
event something occurs. The challenge with arguing an insurance case to a jury is
explaining complicated policies and dry insurance topics in a way that emphasizes the
human dimension. To overcome that challenge, counsel must use the themes and
theories consistently from the moment the trial opens until the verdict is announced.
Clarity and simplicity should guide the team throughout the trial. In-house counsel,
admittedly less conversant in the nuances of insurance contracts, case law, and statutes,
should be the crucible by which the complex policy and coverage issues are reduced to
their most basic components.74
Returning to the example of the Victaulic case, the use of everyday phrases in the policies
like “we will pay” and “we will have the right and the duty to defend” reinforced the
established theme: “we promise to pay and protect you if something happens.” The
“promise” was further emphasized with four simple, straightforward principles for how
an insurer should handle claims.
PRINCIPLE 1:
An insurance company must treat its policyholder’s interests at
least equal to its own interests – it must be fair and honest in its
dealings with its policyholders.
PRINCIPLE 2:
The insurance company must promptly and thoroughly investigate
and pay claims.
PRINCIPLE 3:
In the claim settlement process, an insurance company must not
misrepresent facts, policy language, or the law to the policyholder
and must fairly consider all evidence, including that which supports
claim approval and denial.
PRINCIPLE 4:
If an insurer denies a claim, it must promptly state why, in writing,
citing to all of the facts, the law and the policy provisions that
support its denial.
Those four principles were (and are) basic, well-recognized and undisputed rules that
insurance claims personnel must follow when handling claims. They are established in
the law, in the regulations governing insurer claims handling and in the internal manuals
and guidelines of virtually every insurer. Quite simply, those are “rules of the road” for
claims handlers.75 These rules formed the thematic backbone or foundation for the case,
as all of the insurer’s witnesses agreed with them, verifying they were accurate. And so
did every expert. Every aspect or example of how the insurer handled Victaulic’s claims
was measured against these principles—did it treat Victaulic fairly, did it act promptly,
74
This in-house counsel gives full credit to William Blake for this idea based on the stanza from his poem, The
Tyger – What the hammer? What the chain? In what furnace was thy brain? Be the Tyger not the Lamb once
litigation commences. That includes managing your external counsel.
75
See RICK FRIEDMAN & PATRICK MALONE, RULES OF THE ROAD: A PLAINTIFF’S GUIDE TO PROVING
LIABILITY (2d ed. 2012).
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Mark Van De Voorde , Joseph D. Jean, Colin T. Kemp & G. Allen Brandt
was it forthcoming, and so on. The fact that, as it would turn out, the insurer failed to
follow these rules—rules that even its employees agreed with—was at the core of
Victaulic theory of the case.
Of course, the themes and theory of your case only truly work if they (i) are consistent
with the facts and (ii) are aligned with your company’s style and ethos. Given in-house
counsel’s knowledge of the company and its culture, they must be involved in developing
and choosing them carefully. The process requires significant time and effort to develop
the right mix to prove the facts and situation in a coverage case. 76
VII. Trial: Tell a Good Story, Connecting the Evidence to the Themes.
To the jury, trial is a story. So, as a litigant, you must tell a compelling one. 77
This is an important aspect of good storytelling by a plaintiff (the protagonist): keep it
simple. One of the easiest ways to do this is to tie everything together by systematically
relating each piece of evidence back to the jury instructions and the previously introduced
theory of the case and the rules. Because the jury primarily hears and sees the story
through the testimony of witnesses, how you organize the presentation of testimony is one
of the most important organizational issues you will face when deciding how to try the
case.
Questions related to the organization of the trial witnesses are much more diverse and
complex than simply “what evidence do we need to present to prove our case?” To write
a great novel, an author does not scribble text on paper, shuffle the paper like a deck of
playing cards, pile them up and then call it a book. Instead, each word is part of a
sentence, which is part of a paragraph, which is part of a page, and so on. So too is the
testimony of every witness, each of whom is a character in the story that is the trial. So,
the trial team must think through not only the “substance” of the story, but (i) the
sequence of the information, and (ii) which witnesses should deliver which parts. Then
counsel must answer each of these questions (especially the “who” question) candidly
and honestly. Not all people are charming, innately believable, persuasive or speak is a
clear, pleasant voice.78 All lawyers know well that they may not have the luxury of using
only the ‘best” of several witnesses, but often must critically evaluate how they should
tell their MNC clients’ story, who should be part of it, and in what way. Finally, the trial
team must develop a clear plan to address any weaknesses, whether evidence or
personality driven.79
76
77
78
79
Rarely are trial themes and theories developed in a single sitting. Rather, they take shape through a process
of creation, revision, re-creation, re-revision, and so on. It is advisable—at some point early in the
development process—to take the trial team out of the office, out of their comfort zone, and brainstorm about
themes and theories. Moreover, because trial teams are vulnerable to “groupthink,” all themes and theories
should be tested on people who are not on them. Indeed, mock trials and other practice sessions should be
used as barometers of the effectiveness of proposed themes and theories. Jettison those that prove
ineffective, no matter how attached one becomes.
This is something all authors know well. For example, even the characters inside a story want to listen to a
compelling story themselves -- “No, no! The adventures first, explanations take such a dreadful time.”
LEWIS CARROLL, ALICE’S ADVENTURES IN WONDERLAND AND THROUGH THE LOOKING-GLASS 69 (Cosimo
Classics 2010) (1865 & 1872)
Not sure how a particular witness will perform at trial? Consider this: Increase whatever weaknesses they
have in everyday conversation by a factor of at least two, and there you have an approximation of how they
are likely to perform in the witness box, under oath and with the jury, the judge and a courtroom full of
counsel and observers fixated in their every word and movement.
Ideally you will have done an honest assessment of trial counsel well before you are approaching trial.
Regardless, no one on the trial team (trial counsel, client representative, witnesses, or anyone else who the
judge and the jury will see and associate with the policyholder) should be excused from a candid review of
their strengths and weaknesses, and how eliminate or limit the latter at trial.
Punitive Damages at Trial in the United States
17
In the Victaulic litigation, because a basic understanding of liability insurance would be
essential, we started with an “insurance 101” expert to explain basic insurance principles,
the purpose of insurance (e.g., risk reallocation) and core bargained-for exchange. We
next presented Victaulic’s CFO, who explained the company’s business, its commitment
to excellence and safety, and the importance of its insurance program to it overall
success. In the preceding paragraph we discussed the importance of thinking through and
designing the sequence of information presented to the jury; well, here, the CFO’s
testimony was consistent with and confirmed the “insurance 101” expert’s testimony
about the importance and purposes of liability insurance. A cohesive story is a
persuasive one.
Sixteen further witnesses testified over the course of the month-long trial, each witness—
or small group of witnesses—providing testimony that amounted to a chapter of the
“broken promises” story. First, we presented all of the insurer’s underwriter witnesses
(i.e., the personnel that made the insurer’s promises). Hence, the jury saw and heard
from the “promise makers.” Second, a regulatory expert, who explained the need for and
importance of the four claims handling principles rules, followed the “promise makers.”
The stage was set for our third category of witnesses—the insurer’s claims handlers.
Through careful cross-examination we were able to demonstrate the claims handlers
failed to comply with the principles and rules. Thus we presented the “promise
breakers.” In theory, our “broken promises” theme was taking shape and coming to life
right in front of the jury.
Key documents obtained in discovery also supported our theme. For example, in a 2010
email, a senior insurance executive explained that, although Victaulic had been a “loyal
and profitable” account, the insurer had too much exposure on the account. We argued
this internal email revealed the motive for the insurer’s willingness to walk away from
the bargained-for exchange, something most jurors can imagine or relate to: Money. 80
Similarly, the insurer’s internal claim notes revealed a strategy of refusing to make
settlement payments to Victaulic for product liability claims because of a lawsuit the
insurer would soon be launching against Victaulic in a “favorable venue.” Thus, we were
able to show that, instead of defending Victaulic and forthrightly explaining its
position—instead of following the basic principles that had been set before the jury—the
insurer decided to proactively “handle” Victaulic’s claims by suing without warning.
These are just two examples from a trial that involved hundreds of exhibits. But they
illustrate the larger point: Every piece of evidence you put before the jury has to advance
your theme and theory. A complicated case can be simplified by using evidence and
testimony that ties everything back to the fundamental narrative and a few core points.
Visual aids also help tell the story. For example, the trial team used timelines that
organized many pieces of evidence into single, splashy visuals. One such timeline
presented the acts of the insurer that Victaulic knew about above the timeline against acts
that about the insurer took internally amongst itself (and thus, Victaulic didn’t know
about) below the timeline. Putting the events below the timeline implied that they were
concealed from Victaulic, taking place below the surface. The trial team also paid
attention to small details: each of the bad acts attributed to the insurer was represented in
red. Small touches can have a large impact as the jury absorbs everything before them.
Demonstratives are also effective tools for highlighting—or creating—a weakness in
your opponent’s story. The following is a good example of this. We believed that one of
80
Was “motive” an essential element of any of the relevant CACI instruction? No. Does showing a potential
motive help make for a compelling story and pique the jury’s interest? The authors believe so.
18
Mark Van De Voorde , Joseph D. Jean, Colin T. Kemp & G. Allen Brandt
the insurer’s claims handlers might present well to the jury, so we needed to develop a
simple and clear way to challenge his testimony and credibility. By looking closely at the
documents and evidence, we found one. The team discovered that this particular claims
handler had made twenty diary entries in a seven hour period that reflected a three month
period of time, with notes written in the present tense, giving the appearance that they
had been made contemporaneously with the events described therein. As it happened,
Victaulic’s counsel had sent a letter demanding coverage the day before those twenty
notes were created. The inescapable conclusion, which we methodically developed noteby-note during the lengthy cross-examination of the witness, was that he had created
three months of history in a seven hour window of time. When confronted (at the end of
cross-examination) with this full sequence of events, the claims handler had no
reasonable explanation for what appeared to be his efforts to “cook the books.”
The trial team emphasized these events by using the following demonstrative.
Fundamentally, the demonstrative was a timeline, with each claim note entry appearing
as a simple red dot. The twenty dots on November 27, 2013 were a towering mass—
clearly something had happened when one considered the other dates with only one or
two dots. This visual representation drove the point home for the jurors. We then tied
what the demonstrative revealed about the insurer’s conduct back to the themes of the
case: referencing the four claims handling principles, we could ask “is this being truthful,
being prompt, being accurate” and so on.
The final demonstrative the trial team used was also the single most important: an
enlarged version of the verdict form itself on a poster board. As part of Victaulic’s
closing argument, counsel walked through the actual verdict form, explained the
questions, referenced the law and jury instructions, and made the case for the jury finding
in our favor on each part of the form. The trial team made it simple for the jury, and the
jury responded by awarding everything the team requested, down to the penny.
VIII. Conclusion: Hope for the Best, but Prepare for the Worst.
All in-house counsel—including those at the legal helm of a MNC with business
spanning the globe and those steering a small business through regional operations—
must ensure their corporate clients take steps to have the appropriate liability (and other)
insurance in place. To do so, one must consider and understand their corporate business
risks—known and unknown—and then work with the insurers to create the best risk
Punitive Damages at Trial in the United States
19
transfer mechanisms possible. Developing a strong, stable relationship with your insurers
is essential; they are, after all, one of your company’s business partners and advisors.
You can hope for the best, but you must prepare for the worst. One of the ways the
“worst” happens is you suffer a loss, and then you and your insurer do not agree on the
proper resolution or next steps. At that moment, you face the likelihood of coverage
litigation; and you must be prepared.
If that litigation will be in the U.S., you must act quickly, as the jurisdiction in which any
coverage or bad faith action proceeds will dictate your rights and obligations. To prepare
your case, you must be guided by the jury instructions, and use the discovery process to
marshal the evidence essential to proving your case. When you turn to preparing for the
jury trial, you must always remember you case is presented to a collection of individuals
(the jury), most if not all of whom will know nothing about insurance law, about the
nuances of your business or, truth be told, care to. You must develop your themes and
theories accordingly: Keep them simple, approachable and jargon-free; and, most of all,
tell a good, compelling story.
At the end of the day, jury trials are often, if imprecisely, called “popularity contents.”
Your company—its witnesses, its in-court senior management81 and its trial counsel—
must be genuine and credible. It takes months of consistent action to build credibility
with the judge and the jury. It, however, only takes one misstep to lose it all. A clear
presentation, a resonant theme, and, above all, honesty are the essential to success at trial.
Good luck.
***
Mark Van De Voorde is the Chief Legal and Administrative Officer and Corporate
Secretary of Victaulic Company, Victaulic LLC and Victaulic International Sarl
(“Victaulic”). In this role, Mark deals with a wide array of legal and compliance issues
around the world including but not limited to commercial law, litigation and dispute
resolution, import-export, antitrust and fair trade, environmental, health and safety, SRO
and regulatory approvals, anti-corruption and anti-money laundering as well as corporate
development projects. Mark holds a B.B.S. in Finance from the University of Iowa, a
J.D. with high distinction from the University Of Iowa College Of Law, and an M.B.A.
with honors from the University of Chicago.
Victaulic is the originator and world’s leading producer of mechanical pipe joining
solutions and grooved pipe joining systems. Used in the most demanding markets,
Victaulic innovative pipe fitting technologies and services put people to work faster while
increasing safety, ensuring reliability and maximizing efficiency. Victaulic grooved
couplings, grooved fittings and pipe connectors are at work in more than 140 countries
across diverse business lines. The company’s pipe fitting solutions meet specific business
needs such as accommodating thermal movement, providing seismic solutions, safer
system installations, pipeline maintenance and installation, fire protection piping and
noise and vibration attenuation. For details and more, see http://www.victaulic.com/
Joseph D. Jean and Colin T. Kemp are Partners, and G. Allen Brandt a Senior
Associate, in the Insurance & Recovery and Advisory practice at Pillsbury Winthrop
81
While your trial attorneys will, of course, be present in court every day, you also must have a senior officer
attend the trial every day. This is not a legal requirement but a credibility requirement. Jurors sacrifice their
time and money to perform their fundamental U.S. civic duty: jury service. The presence of a senior officer
shows the jury that the case matters to the company, and that the company also values the time the jurors are
sacrificing for the case. This senior officer becomes and embodies the company. There is no other way to
build that credibility with the jury.
20
Mark Van De Voorde , Joseph D. Jean, Colin T. Kemp & G. Allen Brandt
Shaw Pittman LLP (“Pillsbury”), and were Victaulic’s trial counsel for the litigation
discussed herein. Pillsbury’s market leading Insurance Recovery & Advisory practice is
focused exclusively on representing insurance policyholders against insurance
companies. From major disasters like Superstorm Sandy and Deep Water Horizon, to
complex D&O liability disputes, to devastating cyber-attacks like the Sony Pictures
Entertainment hack, the group has represented companies in a wide array of industries on
virtually every kind of coverage issue. The dedicated team of more than 30 lawyers in
New York, Washington D.C., Houston, Los Angeles and San Francisco has recovered
more than $1 billion in insurance proceeds for clients every year since 2013. It is
consistently lauded by Chambers USA, Legal 500 and Best Lawyers in America and was
recognized by Law360 as a 2015 Insurance Practice Group of the Year.