Depositions in Insurance Coverage and Bad Faith Litigation: 30(b)(6) - - PowerPoint PPT Presentation

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Depositions in Insurance Coverage and Bad Faith Litigation: 30(b)(6) and Fact Witnesses

Taking and Representing Fact Witness and Corporate Representative Depositions, Navigating Ethical Issues in Witness Preparation

Today’s faculty features:

1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific TUESDAY, FEBRUARY 23, 2016

Tarron Gartner-Ilai, Principal, Amy Stewart, Dallas Alan P . Jacobus, Principal, APJ Legal, San Francisco

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Ethical Advocacy: Taking and Defending 30(b)(6) Depositions in Insurance Bad Faith Cases

Tarron Gartner-Ilai Amy Stewart tarron@amystewartlaw.com Alan P. Jacobus APJ Legal alan.jacobus@apjlegal.com

Introduction to the Topic

 Corporate representative deposition (Fed. R. Civ. P. 30 (b) (6))  Insurance companies  Corporate policyholders  Third parties  Goals of deposition  Obtain information  Prepare for dispositve motions, settlement, trial  Bind party  From policyholder perspective it potentially shows

ratification by the company for the acts of its agents and employees

 Development of case themes

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Why is This Topic Important?

 A 30 (b) (6) deposition is the opportunity to

• btain the overall knowledge of a corporate

party

 Failing to prepare to take or defend a 30 (b) (6)

deposition may irreparably harm a client’s case

 Often the 30 (b) (6) deposition plays a crucial

role at trial

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Use of the 30 (b) (6) Deposition In Further Proceedings

 Admissions  Making the most of “I don’t know . . .”  Demonstrative exhibits  Impeachment

 Of deponent  Of other witnesses  Of corporate statements in documents

 Entity’s use of deposition at trial may be limited

 Foundation and hearsay issues

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Special Considerations in Insurance Coverage and Bad Faith Claims

 Underwriting versus claims handling functions

at insurance companies (two witnesses?)

 Familiarity with the policy and all available

underwriting / claims materials

 Familiarity with all relevant procedures  Bad faith claim may create an implied waiver of

some privilege and work product protections

 Protection of other policyholders’ information

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The Rule: Fed. R. Civ. P. 30 (b) (6)

Notice or Subpoena Directed to an Organization:

 The Party Taking the Deposition  Name the Corporation;  Describe with reasonable particularity the matters for

examination;

 Advise nonparty organization of its duty to make the

designation.

 The Party Defending the Deposition  Must designate one or more officers, directors, or managing

agents, or other persons who consent to testify on the company’s behalf;

 Person designated must testify about matters known or

reasonably available to the organization.

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Key Characteristics of the Rule

 Entity is to be protected against serial,

cumulative, or duplicative depositions;

 Provides remedy for the “run-around”;  Binds the company.

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Procedure and Mechanics: The Deposing Party

 The noticing party must “describe with reasonable

particularity the matters for examination . . . .”

 With respect to properly and clearly noticed topics, the

responding entity must designate a person who can provide information “known or reasonably available to the

• rganization.”

 No witness available on a topic?  Duces tecum demands  The responding entity may not be bound by any testimony

not properly noticed

 Best practices: Provide list of topics early

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Procedure and Mechanics: The Responding Entity

 Must designate a representative or representatives to

provide information known or reasonably available to the entity

 Current versus former employee considerations  Person from outside of the entity  Two depositions of same witness?—30 (b) (6) and percipient

 Failure to designate (and prepare) a qualified witness

may result in a motion to compel and additional depositions

 Best practice is a letter response to designations  Objections—Fed. R. Civ. P. 32 (d)

 Procedural  Substantive?

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Ethical Advocacy

 Attorney’s conduct is self-regulated  Federal rules do not provide guidance  No “model creed”  Nature of bad faith litigation and potential for

multiplier of damages lends itself to aggressive tactics

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Model Rules 1.1 and 1.3

1.1 Competence A lawyer shall provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation. 1.3 Diligence A lawyer shall act with reasonable diligence and promptness in representing a client.

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Competent and Effective Witness Preparation

 Review documents and go over facts

carefully

 All documents reviewed are discoverable  Where necessary, use your own notes related to

privileged documents

 Prepare the witness to listen

 Listen, pause, answer  Answer only the question asked  Don’t volunteer information

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Competent and Effective Witness Preparation

 Instruct the witness to tell the truth  Evasiveness shows up on the record and injures credibility  “I don’t know” is OK  Prepare the witness to distinguish between “fact” questions

and tricky “feeling” questions (i.e. “Isn’t it your responsibility to…”)

 Prepare the witness to be videotaped  Practice videos raises the issue of whether the videos are

discoverable or work product

 Instruct the witness not to guess  Ask for clarification  Don’t Lecture (Woodshed) the Witness

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Preparing the Responding Entity

 Personal knowledge of deponent not required,

but preferred, when possible

 Attempt to provide foundation (personal knowledge) of

facts;

 Especially important when entity wants witness to testify as

30 (b) (6) witness and trial witness;

 If witness is also a fact witness, prepare the witness on

matters related to topics designated and to ask for clarification;

 At trial, evidentiary requirements (including foundation and

hearsay) apply. See Williams Advanced Materials, Inc. v. Target

• Tech. Co., LLC, 2009 WL 3644357 (W.D.NY. Oct. 28,

2009).

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Preparing the Responding Entity: Practice Pointers

 Prepare binders for witness with key documents for

each deposition topic arranged by tab;

 Include any other key documents in binder;  Only put documents in binder you have produced

• r are willing to produce;

 No witness notes in binder—blank flags usually ok  Create summaries, spreadsheets, etc. of complex

matters;

 Work with witness in preparation to familiarize the

witness with the binder method;

 Be prepared to produce a copy of the binder, if asked,

and you will be asked.

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Taking the Deposition

 Prepare binders for witness with key documents for

each deposition topic arranged by tab;

 Chronological order is helpful for impeachment to

show later inconsistent conduct;

 Copy for witness, opposing counsel, and court reporter;  Great for taking notes on specific documents during

the deposition (color code question for preparation and response given during examination);

 Make sure to confirm topics on which witness has been

designated during deposition;

 Corporate representative may not be claim handler

 Good opportunity for impeachment

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Model Rule 3.1 Puffing – Mill Practice – Stock Bad Faith Claim

3.1 Meritorious Claims and Contentions

A lawyer shall not bring or defend a proceeding, or assert

• r controvert an issue therein, unless there is a basis in law

and fact for doing so that is not frivolous, which includes a good faith argument for an extension, modification or reversal of existing law. A lawyer for the defendant in a criminal proceeding, or the respondent in a proceeding that could result in incarceration, may nevertheless so defend the proceeding as to require that every element of the case be established.

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Model Rule 3.2

3.2 Minimizing the burden and delays of litigation In the course of litigation, a lawyer shall not take a position that unreasonably increases the costs or

• ther burdens of the case or that unreasonably

delays resolution of the matter.

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FRCP 30(d)(2)

• Objections. An objection at the time of the

examination—whether to evidence, to a party's conduct, to the officer's qualifications, to the manner

• f taking the deposition, or to any other aspect of the

deposition—must be noted on the record, but the examination still proceeds; the testimony is taken subject to any objection. An objection must be stated concisely in a nonargumentative and nonsuggestive manner. A person may instruct a deponent not to answer only when necessary to preserve a privilege, to enforce a limitation

• rdered by the court, or to present a motion under

Rule 30(d)(3).

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Model Rule 3.3

3.3 Candor Toward the Tribunal

(a) A lawyer shall not knowingly: (1) make a false statement of fact or law to a tribunal or fail to correct a false statement of material fact or law previously made to the tribunal by the lawyer; (2) fail to disclose to the tribunal legal authority in the controlling jurisdiction known to the lawyer to be directly adverse to the position of the client and not disclosed by opposing counsel; or (3) offer evidence that the lawyer knows to be false. If a lawyer, the lawyer’s client, or a witness called by the lawyer, has offered material evidence and the lawyer comes to know of its falsity, the lawyer shall take reasonable remedial measures, including, if necessary, disclosure to the tribunal. A lawyer may refuse to offer evidence, other than the testimony of a defendant in a criminal matter, that the lawyer reasonably believes is false. (b) A lawyer who represents a client in an adjudicative proceeding and who knows that a person intends to engage, is engaging or has engaged in criminal or fraudulent conduct related to the proceeding shall take reasonable remedial measures, including, if necessary, disclosure to the tribunal.

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Model Rule 3.4

3.4 Fairness to Opposing Party and Counsel A lawyer shall not: (a) unlawfully obstruct another party' s access to evidence or unlawfully alter, destroy or conceal a document or other material having potential evidentiary value. A lawyer shall not counsel or assist another person to do any such act; (b) falsify evidence, counsel or assist a witness to testify falsely, or offer an inducement to a witness that is prohibited by law; (c) knowingly disobey an obligation under the rules of a tribunal except for an

• pen refusal based on an assertion that no valid obligation exists;

(d) in pretrial procedure, make a frivolous discovery request or fail to make reasonably diligent effort to comply with a legally proper discovery request by an opposing party; (e) in trial, allude to any matter that the lawyer does not reasonably believe is relevant or that will not be supported by admissible evidence, assert personal knowledge of facts in issue except when testifying as a witness, or state a personal opinion as to the justness of a cause, the credibility of a witness, the culpability of a civil litigant or the guilt

• r innocence of an accused; or

25

Model Rule 4.1 – Leading vs. Misleading Questions

4.1 Truthfulness in Statements to Others In the course of representing a client a lawyer shall not knowingly: (a) make a false statement of material fact or law to a third person; or (b) fail to disclose a material fact to a third person when disclosure is necessary to avoid assisting a criminal or fraudulent act by a client, unless disclosure is prohibited by Rule 1.6.

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Model Rule Model Rule 4.4 - Civility

4.4 Respect for Rights of Third Persons

(a) In representing a client, a lawyer shall not use means that have no substantial purpose other than to embarrass, delay, or burden a third person, or use methods of

• btaining evidence that violate the legal rights of such a

person. (b) A lawyer who receives a document or electronically stored information relating to the representation of the lawyer's client and knows or reasonably should know that the document or electronically stored information was inadvertently sent shall promptly notify the sender.

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FRCP 30(d)(3)(A) – Terminating the Deposition

Motion to Terminate or Limit. (A)

• Grounds. At any time during a deposition, the

deponent or a party may move to terminate or limit it

• n the ground that it is being conducted in bad faith or in

a manner that unreasonably annoys, embarrasses, or

• ppresses the deponent or party. The motion may be filed

in the court where the action is pending or the deposition is being taken. If the objecting deponent or party so demands, the deposition must be suspended for the time necessary to obtain an order.

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FRCP 30(d)(2) - Sanctions

Motion to Terminate or Limit. (A)

• Grounds. At any time during a deposition, the

deponent or a party may move to terminate or limit it

• n the ground that it is being conducted in bad faith or in

a manner that unreasonably annoys, embarrasses, or

• ppresses the deponent or party. The motion may be filed

in the court where the action is pending or the deposition is being taken. If the objecting deponent or party so demands, the deposition must be suspended for the time necessary to obtain an order.

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Paramount Communications, Inc. v. QVC Network, Inc. 637 A.2d 34 (Del 1994).

In relation to the defense of the deposition of a corporate representative of Paramount, the court noted: "[o]ne particular instance of misconduct during a deposition in this case demonstrates such an astonishing lack of professionalism and civility that it is worthy of special note here as a lesson for the future-a lesson of conduct not to be tolerated or repeated.“ The court concluded that the “conduct of counsel was abusive” because counsel improperly directed the witness not to answer certain questions, raised many improper objections that suggested answers to the deponent, engaged in lengthy colloquies, was "extraordinarily rude, uncivil, and vulgar,“ and "obstructed the ability of the questioner to elicit testimony to assist the Court in this matter.

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