Never Give Up

Summary written by Maren Chaloupka.

Case tried by Bob Dawson, TLC 2004 and Peter Brown, TLC 2005.

This is a story for anyone who has been on the receiving end of a civil defense strategy to overwhelm and smother and bury any little lawyer, and his or her little client. It is a story for anyone who has worried that the judge has lost sight of what the case is actually about, due to the relentless motion practice and reflexive discovery disputes. This story speaks to anyone who has survived all of that agony and won a just verdict, only to have the trial judge take the verdict away - - the despairing realization that the defense’s strategy won where it unfortunately counts the most.

From our brothers Bob Dawson and Peter Brown, we have a story to give us hope.

Bob and Peter represent a little girl who suffered horrific burns in an apartment fire. In violation of state law for rental properties, there was no smoke detector. When the little girl’s claim against the landlord was presented to the landlord’s insurer, Farmers Insurance, the adjuster assigned to the claim ignored it. Nor did Farmers tell its own insured (the landlord) that the little girl’s attorneys had brought, and were trying to settle, a claim against the landlord.

Three years after Bob filed suit, the landlord entered into a settlement agreement in which he agreed to pay $600,000 of his own funds, and stipulated to entry of judgment against him for $17 million in exchange for a covenant not to execute and an assignment of his bad faith claim against Farmers. Thereafter, Bob filed the bad faith case against Farmers to collect the $17 million for the little girl.

Needless to say, now Bob and Peter finally had Farmers’ attention. The insurer that couldn’t be bothered to communicate with Bob and Peter before they sued the landlord was now awake, alert, and offering its open checkbook to an army of file-churning insurance defense lawyers (and their junior associates, law clerks, interns and other minions). Farmers’ defense unleashed a smothering motion practice that included a breathtaking 1200 pleadings. The trial judge was never without multiple motions to decide, from the time Farmers answered the complaint. Farmers objected to the most basic discovery requests, forcing Bob and Peter to file motions to compel and defend motions for protective orders over and over again.

If the goal of that strategy were to sour the judge on the case by the time of trial, and to cause the judge to resent Bob and Peter for bringing this pain-in-the-ass case in the first place, then the defense succeeded gloriously. Trial lasted five weeks, and the jury returned a verdict in favor of the little girl for the full $17 million. But the judge was happy to grant the defense’s motion for JNOV, finding for the first time - - after 1200 pleadings, dozens of hearings and the five-week trial - - that the statute of limitations had expired two months before Bob and Peter filed suit against Farmers.

I, like many people (and Gerry Spence himself), have been the unfortunate recipient of a JNOV. There is such a feeling of despair - - it’s confirmation of your worst fears that the judge was in collusion with the defense. It feels like the judge and the defense knew all along that they’d never let you win. You wonder if on the golf course or over cigars at some country club, the judge and defense counsel are chortling, “Dance, silly plaintiff’s lawyer! Dance around for us!” You just want to give up this whole draining business of fighting for people because it feels like their defenses are impenetrable.

Bob and Peter surely had that feeling - - especially with the accusation that they had missed the statute of limitations - - but they didn’t quit. They kept telling their client’s story. They told the story of the arrogant insurer to the Washington Court of Appeals. And this week, the Washington Court of Appeals issued an opinion that translates into, “we hear you - - and we get it.” The appellate court reversed the JNOV and reinstated the jury’s verdict for $17 million. And, on the strength of Bob and Peter’s telling of the story, the appellate court produced some great decisional guidance that calls bullshit on common insurance bad faith defenses: “We can give no credence to Farmers’ assertion that it did not have to respond until 2004 because no settlement offer or demand was made or suit filed until then. Farmers’ argument conveniently ignores that in October 2002, when Moratti’s counsel inquired as to whether Farmers would reconsider its position if he sent the demand letter, he was told that Farmers’ decision was final. Relying on Farmers’ stated position, Moratti’s counsel did not undertake the expense of submitting a futile demand letter to Farmers. Nor was he required to do so as the law does not require someone to do a useless act. Since it was Farmers’ own representation that prevented a formal demand letter, it cannot now argue that failure to make the demand bars Moratti’s claim.”

(And, the court noted at the end of the opinion that Farmers will be paying Bob and Peter’s attorneys’ fees for the appeal and at the trial court level as well. Maybe that will cause Farmers to rethink filing 1200 pleadings to which the plaintiff’s counsel has to respond?)

Bob says that the best part of this result was calling the clients and hearing their reaction to this stupendous development. The little girl has, by now, undergone more than 100 surgeries. The family is suffering financially and emotionally. The news to them was so unreal that the little girl’s mother was crying and laughing at the same time. They had never given up hope; and their lawyers never gave up fighting for them. Farmers may appeal this decision to the Washington Supreme Court, so there may be more fighting to come - - but this is a team of lawyers and clients that will not give up.

I can’t finish this beautiful story without one more plug for Grad Course II. Bob and Peter have both attended Grad Course II numerous times. A few years ago, we had a great “discovering the story” session in the Johnson Barn about this case, as Bob and Peter demonstrated how much drama and meaning there is even in a story where the “action” is just an adjuster shuffling files in her cubicle (as opposed to an action-packed truck wreck or a murder). Bob and Peter invited the group to assist them after hours in building further on the case. Their five-week trial bore witness to the fruits of this collaborative and creative effort by the Grad II group. I am so glad that both Bob and Peter will be at Grad II again this year (maybe we can persuade them to lead a breakout session on what they’ve learned about how to wield TLC methods in bad faith cases) - - and with only about two spots still open, maybe readers of this e-mail will be inspired to register as well.

Congratulations and blessings to Bob and Peter and their clients.