Claims adjusting — continued from Page 58
subject of insurance company practices . . . to show that Royal Globe had not only breached the implied covenant of good faith and fair dealing, but had also gone further and behaved or failed to behave in such a way as to make it answerable in exemplary damages.” (175 Cal.App.3d at 66.) Royal Globe objected, but the trial court overruled the objections. The jury found that Royal Globe had breached the contract, that it had acted unreasonably, and awarded California Shoppers contract damages and exemplary damages. The trial court entered judgment for California Shoppers on the contract dam- ages and the damages for Royal Globe’s bad faith but granted a post-judgment motion to strike the award of exemplary damages. Both sides appealed. The Court of Appeal held that allow-
ing Aitken to testify was one of the errors requiring reversal of the damage award. The crux of the error here was that
Aitkin in no sense was qualified as an expert to testify about the subject on which he purported to testify. There is no question both on the record and as a matter of repute at the bar, but that he is a highly qualified trial attorney, and a particularly aggressive advocate of plain- tiffs’ cases against insurance companies. However, no foundation whatsoever was laid to demonstrate that Aitkin had any special knowledge, skill, experience, training or education such as would
qualify him as an expert on insurance company practices. It is no answer, that certain of his professional efforts are aimed at discovering insurance compa- ny derelictions of duty, and then taking them to task. An objection was made to his giving opinions on how California Shoppers’ claim was handled. Indeed, as Aitkin candidly admit-
ted, he had never been employed nor even retained as counsel by an insur- ance company. Small wonder. (Id., (emphasis in original). (Aitken spells his name with an “e.” It is misspelled throughout the decision.) Given the decision in California
Shoppers, you should retain someone who has actually adjusted claims for insurance companies, or has represented and advised them on claims-handling issues.
4. Retain an expert who has experience adjusting your client’s particular kind of claim Many of the carriers’ obligations with
regard to claims-handling are the same regardless of the kind of policy at issue or kind of claim being made. For example, all insurance policies, regardless of the coverage provided, include as a matter of law an implied covenant of good faith and fair dealing. (Comunale, 50 Cal.2d at 658.) To fulfill its obligations under this covenant, when handling a claim, an insurer must give at least as much
consideration to the insured’s interests in receiving the policy’s benefits as it gives to the company’s own interests in not pro- viding policy benefits that it does not rightly owe. (Egan v. Mut. of Omaha Ins. Co. (1979) 24 Cal.3d 809, 818-819 [169 Cal.Rptr. 691].) This means, among other things, that the insurer must conduct a fair, thorough, objective, and timely inves- tigation of the claim. (Wilson v. 21st Century Ins. Co. (2007) 42 Cal.4th 713, 724 [68 Cal.Rptr.3d 746].) Likewise, the statute and regulations prohibiting cer- tain unfair claims settlement practices – California Insurance Code section 790.03(h) and California Code of Regulations section 2695.7 – apply to all insurance claims regardless of the kind of policy under which the claim arises. To determine whether the carrier has
conducted a full and fair investigation, however, you must know what steps are required to properly investigate that partic- ular kind of claim. For example, we recent- ly have litigated several cases arising from a particular type of fire claim – the dam- age caused by smoke, soot and ash from urban wildfires. Our claims-handling expert educated us on the differences between “cold” smoke and “hot” smoke: “cold” smoke has drifted from the fire of its origin and is cooler than “hot” smoke, which is closer to the fire of origin. The soot and ash from hot smoke is more cor- rosive and causes more damage than cold smoke. Adjusters who handle smoke claims should understand this difference and look for the damage caused by hot smoke. Most do not. In fact, most adjusters do not know that there are two types of smoke, let alone that they differ in the damage that they cause. Then again, we would not have been aware of this distinction either had we not retained an expert with experience in handling this particular kind of fire claim.
310-575-4893
www.taxandbklaw.com
mufti@taxandbklaw.com 701 N. Alvarado Street, Los Angeles, CA 90026
60— The Advocate Magazine JULY 2011
5. Retain your claims-handling expert early – the earlier, the better, but certainly before you depose the carrier’s adjuster In the film Double Indemnity,
Edward G. Robinson played a claims See Claims adjusting, Page 62
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