Claims adjusting — continued from Page 60
adjuster named Barton Keyes. Keyes gushed about his work: The job I’m talking about takes
brains and integrity. It takes more integrity than there is in 50 salesmen. It’s the hottest job in the business. . . . To me, a claims man is a surgeon, that desk is an operating table, and those pencils are scalpels and bone chisels, and those papers are not just forms and statistics and claims for compensation. They’re alive, they’re packed with drama, with twisted hopes and crooked dreams. . . . A claims man is a doctor, and a bloodhound, and a cop, and a judge, and a jury, and a father, and a confessor all in one. Not anymore. In most companies
today the claims-handling process is a sys- tem. Most adjusters do not receive mean- ingful training in how to investigate claims, nor are they evaluated on how thoroughly or fairly they investigate claims. Instead, adjusters are trained extensively on how to use their company’s claims system, and they are evaluated on how well they adhere to that system. An experienced, well-trained adjuster
will educate you about the steps that the insurer should have taken in conducting a full and fair investigation. Use this infor- mation to inform your written discovery. This information also will enable you to depose the carrier’s adjuster more effec- tively.
6. Submit a declaration from your claims-handling expert in support of your opposition to the carrier’s motion for summary adjudication In bad-faith cases, carriers usually file
motions for summary adjudication of your client’s claims for bad faith and exempla- ry damages. Many top-flight bad-faith attorneys choose not to file declarations from their claims-handling experts in sup- port of their oppositions to these motions. Instead, they rely on the facts of the insurer’s conduct in adjusting the claim to establish the existence of a gen- uine issue of material fact. Based on our experience, however,
the better practice is to submit a declara- tion from your claims-handling expert in
62— The Advocate Magazine JULY 2011
support of your opposition to the carrier’s motion. There are two reasons why. First, courts seem to find it is easier to rule that a genuine issue of material fact exists if a qualified expert has testified and will testi- fy that the carrier’s handling of this claim fell below the industry standard for han- dling claims. Second, since neither the Code of Civil Procedure nor the Rules of Court impose page limits on supporting declarations, your expert may explain in detail why the insurer’s conduct fell below the industry’s standard of care. The expert’s declaration is your best opportu- nity before trial to persuade the court that the insurer acted unreasonably (bad faith) and that the jury should be allowed to determine whether the insurer acted with “malice,” “oppression,” or “fraud” under Civil Code section 3294 (exemplary damages). You should make the most of this opportunity. In his declaration (we use are using
“his” because the overwhelming majority of claims-handling experts of whom we are aware are men), your expert likely will identify violations by the carrier of various provisions in Insurance Code section 790.03(h) and Code of Regulations sec- tions 2695.1 through 2695.11, which pro- hibit certain claims-settlement practices. Insurers typically object to these refer- ences based on the California Supreme Court’s decision in Moradi-Shalal v. Fireman’s Fund Ins. Cos. (1988) 46 Cal.3d 287 [250 Cal.Rptr. 116], in which the Court held that section 790.03(h) does not provide the basis for private bad-faith cause of action. But expert opinions based on section 790.03(h) and the corre- sponding regulations are admissible. In Jordan v. Allstate Insurance Company
(2007) 148 Cal.App.4th 1062 [56 Cal.Rptr.3d 312], a homeowner (Jordan) sued Allstate to recover for the collapse of a portion of her home. Her policy provid- ed “additional coverage” for any loss due to an “entire” collapse caused by “hidden decay” but excluded from coverage any loss caused by “wet or dry rot.” After an earlier summary judgment for Allstate was reversed on appeal, the trial court on remand granted Allstate’s motion for summary adjudication of Jordan’s claim
for breach of the implied covenant of good faith and fair dealing. Jordan appealed, and the Court of Appeal reversed the trial court’s order. Relying on Moradi-Shalal, Allstate
argued that the trial court had erred by admitting expert opinion regarding Allstate’s failure to comply with certain provisions in Insurance Code section 790.03(h) and the corresponding insur- ance regulations. The Jordan court reject- ed Allstate’s argument and ruled that the trial court had properly admitted the expert’s testimony. Jordan was not seeking to recover
on a claim based on a violation of sec- tion 790.03, subdivision (h). Rather, her claim was based on a claim of common law bad faith arising from Allstate’s breach of the implied covenant of good faith and fair dealing which she is enti- tled to pursue. (See Moradi-Shalal.) Jordan’s reliance upon the [expert’s] declaration was for the purpose of pro- viding evidence supporting her con- tention that Allstate had breached the implied covenant by its actions. This is a proper use of evidence of an insurer’s viola- tions of the statute and the corresponding regulations.
(Id. at 1078 (citations omitted, emphasis added).
Conclusion A knowledgeable, experienced claims
adjuster who has substantial experience handling the kind of claim you are litigat- ing is critical to winning bad-faith cases. Retain them early. Rely on them often.
Michael L. Cohen and Heather M.
McKeon are the principals in Cohen McKeon LLP. Cohen received his J.D. in 1992 from Harvard Law School, and was a member of the Harvard Law Review. McKeon graduated in 1996 with honors from Georgetown Law Center. They devote a substantial part of their practice to representing policyholders in cases involving insurance coverage.
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