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

9/14/2016 Insurance Coverage and Bad Faith Seminar September 15, 2016 Doing the Plaintiff’s Work for him? Why help the bad guy? Carlock, Copeland & Stair, LLP 1

9/14/2016 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 . . . Carlock, Copeland & Stair, LLP 2

9/14/2016 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 on 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%. Carlock, Copeland & Stair, LLP 3

9/14/2016 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. Carlock, Copeland & Stair, LLP 4

9/14/2016 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 other parties lessens the risk of your insured bearing the entire loss or a disproportionate amount. Carlock, Copeland & Stair, LLP 5

9/14/2016 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 Carlock, Copeland & Stair, LLP 6

9/14/2016 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?) Carlock, Copeland & Stair, LLP 7

9/14/2016 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 Carlock, Copeland & Stair, LLP 8

9/14/2016 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 Carlock, Copeland & Stair, LLP 9

9/14/2016 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 Carlock, Copeland & Stair, LLP 10

9/14/2016 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 of property renovation. “ Tenant Business” not responsible. Carlock, Copeland & Stair, LLP 11

9/14/2016 Counter-tender - Response from Landlord’s Insurer Response: Carlock, Copeland & Stair, LLP 12

9/14/2016 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. Carlock, Copeland & Stair, LLP 13

9/14/2016 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 Carlock, Copeland & Stair, LLP 14

9/14/2016 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. Carlock, Copeland & Stair, LLP 15

9/14/2016 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. Carlock, Copeland & Stair, LLP 16

9/14/2016 What Can Happen? • Counter Tender • Cross-claim from Third party If you tender your defense or bring indemnity claims… expect a fight. Be Ready To Push Back • Clear Contractual obligation for Third Party? • Viable Case for Equitable Indemnity? • Can you argue you coverage is excess? Carlock, Copeland & Stair, LLP 17

9/14/2016 Other Coverage: The Wild West If you take the right steps in beginning… it can lead to a better and more efficient result. Carlock, Copeland & Stair, LLP 18

9/14/2016 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 Carlock, Copeland & Stair, LLP 19