FROM BEAUTIFUL BRAZILIANS TO BEAR-CATCHERS
By: John J. Pappas
This is one of a series of articles under the by line “Butler Pappas on Bad Faith” originally published in Mealey's Litigation Report: Insurance Bad Faith, Vol. 21, #22, p. 29 (March 18, 2008).
[Editor's Note: John J. Pappas is a partner with the law firm of Butler Pappas Weihmuller Katz Craig LLP with offices in Charlotte, Miami, Mobile, Tallahassee, and Tampa. He is an experienced trial and appellate lawyer in the firm's Coverage and Extra-contractual Departments. This commentary, other than the quoted material, is the author’s opinion; not his law firm's, and not Mealey's Publications’. Copyright © 2008 by the author. Responses are welcome.]
The practice of law can be tedious and dull. Every now and then, however, it is not.
The father was a burly man with bushy eyebrows, who professed to once being a Greek Ambassador. The son was a handsome young man, reserved and polite, whose wife was a beautiful young Brazilian.
I began the Examination Under Oath with the son, since he was the one residing in the house, along with his bride, at the time of the alleged theft of about $80,000 worth of Persian rugs. After about ninety minutes of questioning the son, during which I "corrected" his testimony five or six times, each time reminding him of the "Concealment and Fraud" provision of the insurance policy, the father interrupted.
Mr. Pappas, Mr. Pappas excuse me. I sense you are getting frustrated with my son.
Yes, sir. I am.
Well, please don’t. Can we speak privately?
Okay. [At which time the father and their attorney and I walked into the hallway together].
Mr. Pappas, I interrupted because I sensed you were getting frustrated with my son and it appears you believe that he is lying to you.
Well, sir, he does give that impression.
Well he isn’t. There is something you need to understand. My son is mentally deficient.
My son - he is not very intelligent and in fact probably does not understand what he is saying. He is mentally deficient.
Well, if you and your attorney are saying that he is legally incompetent to testify why did we waste the whole morning with him under oath?
Well, I just want you to understand that he is not lying to you. He is just not very intelligent and is mentally deficient.
Okay. Let’s go back in and wrap it up with him and then we will continue with the wife.
We went back into the conference room. As the bride was tightly clutching the hand of the groom, I continued questioning the young man.
Sir, given the fact that for the past several years you have worked as a loan officer with a Chicago bank please explain to me your mental health or condition --
Wait. Hold on. Wait a second Mr. Pappas. No no no. We need to talk again.
The father was out in the hallway before I could respond. I again met with him and his attorney privately at which time the father informed me as follows:
Mr. Pappas, you cannot ask my son questions about his mental health or mental deficiencies.
He does not know about them.
Guys, come on, what is going on?
We will provide you with his medical records and you will be able to understand from a review of them.
We then went back into the conference room at which time I agreed to adjourn the Examination Under Oath of the son without completing it. We then proceeded to use an interpreter to question the wife while under oath. Sensitive to the situation, I asked that her husband wait for us in the lobby.
Ma'am, (I immediately inquired), please share with us your understanding of your husband’s mental condition and deficiencies --
[Before the interpreter could interpret]. No no no. No, Mr. Pappas we need to talk.
Again, he was in the hallway before I could respond. I followed him and his attorney.
I am now glaring at their attorney, who seemed fascinated by his own shoes, as the father proceeded to state:
Mr. Pappas. No no no. You can’t ask his wife about his mental condition. She knows nothing about it.
Obviously the above actually happened, I don’t have that great of an imagination. In fact, what is even more unbelievable is the fact although we were never provided any healthcare records the insurance company actually paid the claim!
* * *
Hurricane Wilma occurred. A condominium association hired a public adjuster to prepare and present its insurance claim for property damage. The claim submitted was in excess of six million dollars, almost all of which was for the cost to replace each and every roof of the entire complex. This was about thirty roofs.
Predictably, during the Examination Under Oath, the insured admitted ignorance of its claim, but deferred to its expert, its public adjuster. The public adjuster proceeded to testify that he did not hire any expert to review or test the roofs. Moreover, that he had not walked most of the roofs. His testimony was anytime there is a named hurricane and he finds interior water damage within the building, he declares that the roof above needs to be replaced. This public adjuster seemed upset when we referred to such a claim by using the "F" word.
In a somewhat similar claim, a condominium association produced for Examination Under Oath its professional property manager and the President of the Association. Both testified essentially the same, which is as follows:
Sir, your claim for insurance proceeds is the cost to actually replace all the roofs for about $3.8 million correct?
And you relied upon your public adjuster for this estimate and this figure, correct?
And you and the Board met to review the public adjuster’s estimates the basis for those estimates and the Sworn Statement in Proof of Loss form that you executed and submitted to the insurance company for $3.8 million correct?
And you submitted such a claim via United States Mail in January of 2006, correct?
And here today, March of 2006, you again on behalf of the Association while under oath reaffirm and ratify that your claim for insurance proceeds is $3.8 million for the replacement cost of all these roofs as a result of the storm correct?
I now hand you what is marked as Exhibit 3. What is that document?
That is a contract with the roofer to replace the roofs.
When was the contract entered into?
October 31, 2005.
Were there any changes or change orders relevant to that contract?
Has that work been completed?
When was that work concluded?
A few weeks ago.
Do you owe that roofer any more money for the work he did to replace the roofs?
Have all the roofs been replaced and the work done in an acceptable fashion?
And did you pay the roofer or anyone else related to the replacement roofs any more money than what the contract states would be the lump sum payment for the replacement of all these roofs?
Well, look at the Exhibit 3 and tell me how much that contract to replace all the roofs cost the Association?
Would you please explain to me here today while under oath while you and your Association submitted a claim for $2 million more to replace the roofs than it actually had already contracted for such replacement?
No, I can’t.
Well, can you explain to me why you and the Board ratified and okay’d the submission of a Sworn Statement in Proof of Loss executed under oath by you for $2 million more than the $1.8 million contract price?
No. I can’t. You would have to ask the public adjuster.
Well, sir, you and the Board reviewed these numbers to be submitted to the insurance company in January correct.
At that time you and the Board already knew you had contracted with the roofer to replace all the roofs for $2 million less, correct?
So explain to me why did you and the Board submit such an insurance claim when you already knew that the cost to you to replace the roofs would be $2 million less?
I don’t know. You would have to ask the public adjuster.
Well, you have not produced the public adjuster here to testify so I am asking you. Explain to me how if by a few weeks ago the roofs have been totally replaced for $1.8 million why did you come in here today and under oath once again reaffirm and reassert that my client should pay you $3.8 million to replace all the roofs when it only actually cost you $1.8 million?
I don’t know. You’d have to ask our public adjuster.
Well, sir. Again, this is your insurance claim for insurance proceeds not your public adjuster’s. You’re the one that signed the Proof of Loss under oath and you’re the one under Examination Under Oath. Wouldn’t you agree sir the claim that you and the association have submitted to my client is a fraudulent insurance claim?
I don’t know. What is a fraudulent insurance claim?
* * *
Not too long ago I found myself in a mediation on a first-party "bad-faith" claim. As is typical, the insured’s attorney was righteously indignant, abusive, and threatened the insurance company with a punitive damages verdict that would result in other subsequent "bad-faith" claims, if not class action cases, which in turn would result in yet more punitive damage awards that would bankrupt the insurance company, notwithstanding the constitutional caps imposed by Campbell. After listening to opposing counsel’s hostile rhetoric for more than sixty minutes, the mediator turned to me and asked if we wished to respond.
"No thank you," I said, "but I do have a question."
"Yes," inquired the mediator.
Counsel, what are your client’s actual "bad-faith" damages?
What are your "bad-faith" damages? We have already paid and resolved the underlying contract damages. Now, we would like to know what are your client’s actual "bad-faith" damages? Not what you seek for punitive damages, but what are your client’s actual "bad-faith" damages? Presently, we are not aware of any.
Well, (stammered opposing counsel), I’m not here to argue with you over the merits of our claim. Your client has substantial exposures here and we suggest that they make a reasonable offer for a global settlement today before this case gets out of control.
Well, we understand that. My client and I understand that you and your client want us to pay you a lot of money. We got that message. Our question, however, remains. What are your client’s actual "bad-faith" damages? We are not aware of any.
Mr. Pappas, I’m not here to be cross-examined by you.
Oh, forgive me. I thought your contention was that your client was damaged by my client’s wrongful conduct. Sorry, my bad.
Once I was in a trial defending an owner of a house converted into apartments. One of his tenants alleged she had been raped and brought a premises liability lawsuit against him. One of the issues was whether our client breached his legal duty by failing to have installed burgular bars around the windows, one of which, presumably the assailant had crawled through. As evidence that our client knew or should have known to have installed such burgular bars, the plaintiff submitted expert testimony of an ex-police officer on the incidences of violent crimes, particularly rape, throughout the City, using one-quarter mile grids throughout the entire City. My cross-examination went something like this:
Sir, there’s over 1,800 quarter-mile grids documenting instances of crime within each grid for each year for the past 10 years, correct?
And based upon that information, you opine that my client had an apartment complex in a particularly dangerous grid that had a propensity for violent physical crime including rape, correct?
And based upon your analysis you contend that my client should have installed burgular bars around each and every window of his house or apartment complex, correct?
Well, using your own standard and your own data, if I had a house with windows located at 4205 Shamrock Road according to you I should have burgular bars around all the windows correct?
If that address is in the City given the data I have before me, yes.
And if my house was located at 2105 Ponce de Leon Court according to your standard that you’ve applied and the data you relied upon I should have burgular bars along all the windows of that house as well?
Yes, if it is in the City, yes.
And if my house has got 20 windows to it and it's located at 205 South Willows Creek Road you contend that I should have installed burgular bars on each and every one of those 20 windows correct?
At which time opposing counsel stood up and stated: "Your honor I object."
The Judge who had been leaning over listening to the cross-examination with particular interest if not yet amusement inquired, "Yes counsel, what is your legal objection?"
Well, Judge. I am not sure but I think Mr. Pappas is reading off the addresses of the jurors.
The Judge looked at me with a twinkle in his eye and a smirk on his face. As I stared at him without responding, he nodded his head as if to acknowledge the accuracy of opposing counsel’s objection and said, "Mr. Pappas, I think we could skip the remainder of this portion of your cross-examination. . ."
Once I was asked by the employer’s insurer on the eve of trial to defend a man who had been sued for personal injury and punitive damages as a result of an accident involving his employer’s truck. After incurring some difficulty in contacting him, I arranged to meet him at a truck stop in a remote area outside the City.
As I drove into the parking lot to enter into the food court, I noticed a filthy and weathered car parked off to the side filled with clothes, pillows, junk, and golf balls. As I walked inside the store dressed in a suit and tie, the manager, with one arm on the shoulder of what appeared to be a man, looked up at me and asked, "Are you the lawyer?"
"Yes, I am."
"He says he’s been waiting for you."
"Yes sir." The manager left us as I sat across from the body humped over the table.
"Sir, are you Mr. Nichols?"
"Yes, sir," said the almost toothless man. He was hairy, unshaved, and unbathed. He was wearing a cotton black sweat suit that was littered with attachments of hair and some other unmentionables.
"Sir," you understand I have been hired to defend you in this lawsuit."
"Yes, sir," he said.
"Could you tell me your version of what happened?"
"Sure," he said with unexpected articulation. "I was driving the truck about thirty, no more than forty miles over the speed limit and I rammed her from behind. I didn’t even hit my brakes – ever. Its amazing she only broke her shoulder."
"Was this at night?"
"No. Mid-day. Clear day. No rain or fog. Beautiful day."
"Well, sir they said you had been drinking and you were intoxicated – is that true."
"Been drinking. Intoxicated. Hell, I was so drunk its amazing I was able to drive at all!"
"Sir, you have a drunk driving record?"
"Yes, I have."
"You have been arrested for drunk driving on several occasions."
"You realize this lady is suing you for personal injuries and punitive damages."
"Yes. But I have no insurance and everything I have is in that car."
"What do you do now for a living?"
"I work for the circus."
"What do you do in the circus?"
"I’m the Bear-Catcher," he said with pride.
"Yes. Anytime a bear, lion, or tiger escapes from its cage – it's my job to catch him and put him back."
Every now and then, usually while I’m drafting a set of interrogatories or listening to opposing counsel’s meandering interrogation of a deponent, I wonder about the Brazilian wife and the Bear-Catcher.