Doing the Plaintiffs Work for him? Why help the bad guy? Carlock, - - PDF document

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Insurance Coverage and Bad Faith Seminar

September 15, 2016

Doing the Plaintiff’s Work for him? Why help the bad guy?

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From the Beginning: Evaluate for other Viable Parties and Possible Sources of Coverage

• Other Potentially Culpable Parties
• Other coverage available
• Insured’s potential exposure – where does your insured fit in

the overall picture (global exposure)

More players, more coverage, means a bigger safety net for your insured . . .

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Contractual Indemnity

• Insured - General Contractor or

Specialty Contractor using subcontractors

• Insured - Owner or Property Manager of

commercial property

End Game – The Verdict Form

• Your insured could face 100% of the

liability if other parties are not included

• n the Verdict Form.
• South Carolina’s apportionment law

remains unclear regarding non-parties.

– Verdict – jury must determine percentage (%) of liability attributable to each Defendant. The total liability must 100%.

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End Game – The Verdict Form

– Defendant retains the right to assert a non-party

caused or contributed to the injury or damages. – Conflicting provisions, but trial judges are usually denying requests to add non-parties to the verdict form. Fagnant v. K-Mart Corp., (2013 WL 6901907 D.S.C. 2013) – Federal District rejected arguments to include a dismissed Defendant on verdict form.

Empty Chair and the Verdict Form

“We the jury find” Defendant ____ (percentage must be 100%).

• You can always argue other parties are responsible,

but that may not help you when you are alone at the defense table.

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Added Parties/Defendants Settle

• What happens if the other Defendants

Settle?

• Setoff – Your insured is entitled to a

setoff under South Carolina law.

– Setoff shall be applied in proportion to each Defendant’s percentage of liability. 15-38-15(e).

Under South Carolina’s Apportionment Standard

Convincing Plaintiff’s counsel to add

• ther parties lessens the risk of your

insured bearing the entire loss or a disproportionate amount.

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What about the Claims that may be winnable through motions? Is other coverage worth considering?

• Your insured’s the lone Defendant.

Other parties could be added. Do you proceed with motions right away?

• It can be easier to prevail by motion in

multi-defendant cases.

Premises Liability

• Hazardous Condition- injury claim

– Owner – Tenant – Property Manager and/or Maintenance Company – Contractor

• Subcontractors

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Premises Liability

• Security Claims

– Owner – Tenant – Security Company – Property Management Company – Alarm Company

Product Liability

• Manufacturer
• Direct Seller
• Supplier/Distributor
• Anyone in the chain of distribution
• Product with multiple component

makers (i.e. Other Manufacturers?)

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Always better if Plaintiff has a direct claim against Other Parties.

• If that does not happen, is there a valid

third-party claim?

Can you tender the defense of the case to another party?

• Contractual Indemnity

– Review and Evaluate – Insured/Third Party contract and Third Party’s Insurance Policy

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No contract: Can you tender the defense of the case to another party?

• Equitable Indemnity

– Is there a special relationship with your insured and Third Party? – Are claims against your insured specific to alleged action or inaction of the Third Party? – Is there coverage for the Third Party?

Equitable Indemnity – still need to evaluate Third Party’s coverage.

Written Correspondence about Third Party Claims

• With opposing counsel

– Discuss – Share documentation – In writing: Less is better – Involve defense counsel

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Written Correspondence about Third Party Claims

• With Third Party or Third Party’s Carrier

– Discuss – Written Notice of Your Claim or Tender

• Facts giving rise to Indemnity or Contractual

Obligation

• Identify your Damages
• Other carrier’s policy – why their coverage

applies (your insured is their insured).

Premises Case with Tenant Insured

• Plaintiff badly injured knee (2 surgeries)
• Trip / Slip Accident
• Accident Happened on Commercial property with

multiple tenants

• Only sues one party (Tenant Business) – based on

alleged hazardous condition

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Contract

Indemnity Clause – Clearly favored the Landlord Maintenance Provisions – Slightly favored the Tenant Business

Facts Supported Third Party Liability

• Fall incident happened right in front of Tenant

business.

• Fall location / alleged dangerous condition was a

common element.

• Find the Records – Subpoena three different

property managers.

• Evidence – Emails, maintenance records, documents
• f property renovation. “Tenant Business” not responsible.

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Counter-tender - Response from Landlord’s Insurer Response:

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Response:

Premises Case (Tenant Insured): Result

• Tenders were not accepted by either party or

insurance carrier.

• Plaintiff added Landlord.
• As soon as Landlord added, we filed for

summary judgment.

• Judge ruled in favor of Tenant Business and

dismissed case against our insured.

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Auto Accident Case

• Auto accident case came in as Uninsured Claim.
• Named Defendant (not a John Doe)
• Plaintiff’s attorney had already determined Defendant had no insurance.
• Focused on Mother’s policy, but we learned Defendant bought his own

insurance.

• Recent DUI - Defendant had SR-22 (DUI – Insurance) – Non-owned Auto

insurance policy.

• Case was postured as an uninsured claim when it should have been an

underinsured claim. Our client insurer had second layer of coverage, not the first.

• Defendant’s insurer denied coverage and our tender.

– Contended non-owner auto policy did not provide coverage.

Auto Case (cont.)

There was some back and forth

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Auto Case (cont.)

• We pursued the coverage issue because defense

costs were arguably at stake. – Excess insurer should not be forced to defend before settlement of the primary coverage.

• “Reasonable expectations” – the court looks to

Insured’s reasonable expectations when the policy is ambiguous or conflicting. Bell v. Progressive Direct

• Ins. Co., 407 S.C. 565 (2014).
• Affidavit and Deposition of Defendant driver.

Auto Case (result)

• Liability Insurer tendered its limits and

reimbursed UIM insurer for property damage settlement.

• No additional coverage if the

Defendant was not asked about it.

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Workers’ Compensation

• Subcontractor’s Employee
• Injured worker is an Independent

Contractor

• Is there an Occ. Acc. Policy?

Your efforts to pursue more coverage may not be well received.

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What Can Happen?

• Counter Tender
• Cross-claim from Third party

If you tender your defense or bring indemnity claims… expect a fight.

• Clear Contractual obligation for Third Party?
• Viable Case for Equitable Indemnity?
• Can you argue you coverage is excess?

Be Ready To Push Back

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Other Coverage: The Wild West

If you take the right steps in beginning… it can lead to a better and more efficient result.

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Questions??

Contact:

Sarah E. Wetmore (843) 530-1100 swetmore@carlockcopeland.com Robert B. Hawk (843) 266-8232 rhawk@carlockcopeland.com Jackson H. Daniel (843) 266-8215 jdaniel@carlockcopeland.com