Poppin’ Policies and Very Bad Faith
- 22 December, 2023
- 2.88 GB
In this episode of the Justice Team Podcast, Bob Simon sits down with Kieran Doherty, an attorney with a unique background as a former insurance adjuster and defense lawyer who saw the light and now reps the victims. They dive into the complexities of open policies, offering essential tips for lawyers on insurance coverage, policy limit demands, and effective communication in demand letters. This episode covers strategies for pressuring insurance companies in both pre-litigation and litigation stages and discusses using white waivers in mediation, offering valuable wisdom into securing better outcomes in open policy cases.
Kieran Doherty, Simon Law Group
Transcript
Bob Simon (00:07):
All right. Welcome to this edition of the Justice Team podcast. This is Bob Simon, I’ll be hosting this one. If you have any questions, you want any new shows, you want to hear about our topics, go to justiceteamnetwork.com, click that tab and happy to talk to you about it. But today we’re going to open your hearts, open your minds to open policies, and we have a one-on-one with none other than Kieran ‘don’t call me Karen’ Doherty.
Kieran Doherty (00:35):
You can call me Karen. I answer to anything, honestly.
Bob Simon (00:38):
It’s fine. So the reason why we have this gentleman on today is he spent some time as an insurance adjuster at State Farm and a lawyer at State Farm and he now is on the bright side of things. His heart was always here. He opened his heart to the open policies of our side. So Kieran, we’re going to get in some deep diving and get some practical advice to our listeners on, first of all, insurance coverage, what it is, what it means, what you have to do to be able to put some pressure on to get paid, maybe policy limits, maybe above-
Kieran Doherty (01:10):
I think there’s definitely a difference between the two, depending on what your goal is.
Bob Simon (01:15):
Yeah. So just talk to us a little bit, Kieran. Just give everybody a snapshot of your experience.
Kieran Doherty (01:21):
All right, man. Farmers, but State Farm and Farmers are pretty similar, I think.
Bob Simon (01:25):
La, la, la.
Kieran Doherty (01:27):
[foreign language 00:01:28]. But I was an adjuster for Farmers, supervisor for about a decade, and then I was a defense attorney for Farmers on the adjuster side. I really did focus on training our team on how not to open policies, what you should not do. That was one of my things I really did focus on and I think we did a pretty good job, at least in my office when I was there, understanding the weak points, the strong points, what you can do, what you can’t do.
(02:00):
And then I went to law school at night while I was an adjuster. And so since I was in law school, the analysis of open policies and those types of things, they were like, “Hey, you’re in law school, so you take over this.” So I really did a lot of things regarding that and surrounding that. I always found it very interesting. And then after that, like you said, I came to the light side, joined the Simon Law Group and have been here I think almost three years now. Somewhere in there. So I’m putting my evil powers to use on the right side.
Bob Simon (02:33):
Oh, I love it, love it, love it. All right, so let’s get down to it. A lot of our listeners have what’s considered pre-litigation cases, cases right off the street. The case walks into their office, they may or may not know the policy limit. A lot of times in California they don’t have to tell you the limit. Some jurisdictions, like for instance Massachusetts, they’ve got to tell you within 30 days what the limits are. But here they don’t. Okay? So let’s say they walk in, a client maybe breaks their arm, they had to have surgery. The attorney wants to then demand the policy limits to get it tendered or paid. Some lawyers go in and say, “Pay me either 500,000, or if the policy is 250,000 or more, we’ll take that.” What’s the best way to go do this and what are the pitfalls?
Kieran Doherty (03:21):
I don’t know there’s one best way, depending on what you’re looking for. For me, I like to keep it just as a generic policy limit demand. And the reason for that is there’s a difference between making a policy limit demand and getting paid the policy, and you want to get paid the policy. Versus if you’re actually going to pursue a case as an open policy down the line, in my opinion, the more simple and concise and clear the demand is, the better, because that demand’s going to be exhibit A in any kind of bad faith litigation. So if it’s like, “I’ll take 500 or 250 or the policy,” I think that can get a little confusing to a layperson.
Bob Simon (04:02):
Yeah. If a juror can’t understand it later in a second lawsuit, this could be confusing. How would the insurance company know?
Kieran Doherty (04:07):
Yeah, and I sometimes can’t understand it myself. I’ll sit down and read them, “Okay, that actually makes sense,” but I had to stop and think about it. But write it so someone like me can understand it, someone who keeps it very simple. That’s my opinion if you’re going to pursue it later; the more simple, the more concise, it allows a juror down the line to be like, “Oh yeah, that’s pretty clear. That’s the policy, they didn’t pay the policy. There’s no doubt about that.” How could you be confused?
Bob Simon (04:34):
Yeah. And then there’s also case law in California statute that says the guidelines for it. I’m a big believer in make it as simple and as unequivocal as possible just in the demand section. You can have as much meat on the bone as to everything that’s going on in the middle, all the injuries, the liability section. There’s companies like Even Up that do that. People do their own demand letters, blah, blah, blah. But that meat, that thing at the end, my demand; short and sweet, right?
Kieran Doherty (05:02):
Yeah. Well now, like you just said, with CCP-999, it’s not the Wild West anymore. You have to have certain things and obviously you have to make sure that it’s a time limit demand, or you reference CCP-999, and I don’t see any reason not to reference it to make it as clear as possible. This is a time limit demand pursuant to CCP-999.
Bob Simon (05:25):
And that’s California, CCP-999. Other states have other issues or other statutes. They may or may not. But it’s usually a reasonableness statute, do it in a reasonable time and stuff like that? Usually 30 days is-
Kieran Doherty (05:38):
Yeah. And this stuff does get, like you said, very state specific. So when I’m talking, I’m talking for California, just because, as you’ll see as we go through this, the California specific stuff, it’s pretty in depth. It gets real specific and each state is a little different. And if you know these things like the back of your hand for the state you’re in, it makes a huge difference, because as the carrier, as an adjuster, if I get a demand, especially now in California with CCP-999, if I get a demand in and I realize it doesn’t comply with CCP-999, it’s a free ticket for me. I’m not worried about it. I don’t care. I can’t open the policy anymore in pre-litigation if this demand doesn’t comply.
(06:17):
So it’s really important to understand and know what is required in your state, in your jurisdiction, and know it like the back of your hand, because the adjusters … not all of them do, don’t get me wrong. But if there’s a higher up reviewing it, they’re going to know that and they’ll realize that if you don’t meet these conditions, it’s a free ticket. You can’t open the policy, so I can do whatever I want.
Bob Simon (06:39):
Yeah, and I always just say demand the policy limit. Sometimes if you’re wrong on the amount, that’s an egg on your face.
Kieran Doherty (06:47):
In both ways too, right? So for example, if the policy is 50,000 and I thought it was 250 in California and I demanded 250,000, the insurance company, what they do is they reach out to their insured and say, “Hey, this demand’s 250,000. Do you want to offer 200,000 to settle the case?” And the insured’s like, “No.” And then it’s in excess that they can’t accept that demand. So you can’t open the policy like that. What they should do is tell you, “Hey, it’s only $50,000.”
Bob Simon (07:17):
But they don’t.
Kieran Doherty (07:18):
But they don’t. And you can’t open a policy because they had no chance to accept it.
Bob Simon (07:22):
Yeah. You have to make it at or within the policy limit. A lot of people forget that. You can make a demand under the policy limit. It’ll still open it. It’ll still open it. So if you’re in litigation and you want to do an offer to compromise, you could do it lower than the policy limit. There’s also something that’s just to educate our listeners on what is a combined single limit? How does property damage factor into that? A lot of people think, “Hey, I saw a million dollar policy. I’m going to demand a million dollars.” How does that not open the policy sometimes?
Kieran Doherty (07:51):
Yeah, and like you said, it’s a combined single limit. It means there’s one limit for everything; property damage, any other injuries, any other people. But even if it’s a one person and they paid out the property damage and you say, “I want the policy limit,” or you say, “I want a number. I want $1 million.” And they already paid out $100,000 in property damage, there’s no longer a million dollars available on the policy. So like you said, if you keep it simple, let’s say the remaining policy limit, and we’ll even put in our demands, I’ll put, “We’ll accept the remaining policy limit,” just in case. You occasionally see burning policies, which is where the defense comes out of the policy as well. And I want to make it very clear, if it’s a burning policy or if it’s a combined single limit, we’ll accept what’s remaining. We’re being very reasonable.
Bob Simon (08:34):
Yeah. And that’s again, make it simple, reasonable, something for the jury to understand if there’s a second lawsuit. Because you could say, “I demand a million dollars,” but there was only 953,000 available because they paid out a property damage claim. But how does this happen whenever there are multiple injured people? Okay, so let me give you a hypothetical here, all right? There’s 100,000 per person, 300,000 per accident coverage for their responsible party. There are five injured folks.
Kieran Doherty (09:06):
Why couldn’t you make it easy and there are only three? Then it’s easy. Straightforward.
Bob Simon (09:10):
Then it’s easy. Okay, let’s say it’s three. If it’s three-
Kieran Doherty (09:12):
If it’s three, you’re good, but this is where it gets confusing. If it’s three, it’s only in California with 100, 300, because there’s three individual hundreds available.
Bob Simon (09:19):
Correct.
Kieran Doherty (09:20):
So they can accept your demand. They don’t have to work on-
Bob Simon (09:22):
You can get no more individually than 100, but no more than all three of you for 300.
Kieran Doherty (09:26):
Correct. And if there’s only three of you, they can evaluate each demand individually.
Bob Simon (09:30):
What if there’s five?
Kieran Doherty (09:31):
Yeah. Then it gets a little weird, right? Because they can’t just say, “Okay, I pay you 100,” leaving the other 200 available if there’s four other exposures out there, right? So you have to get together and make it a global demand.
Bob Simon (09:42):
So what happens in practicality is if you represent everybody, it’s easy. You can say, “Hey, we’re making a joint policy limit demand. Don’t worry about how it’s split up, just pay it. Thank you.” But what if you represent four and there’s one that nobody can find and it’s well within the statute of limitations?
Kieran Doherty (10:05):
I mean, it kind of gives the carrier a free out. I mean, find them, work with them, get together and make the demand and say, “We will globally accept it.” Listen, at some point though, sometimes it comes where you really can’t find them. At that point, if you want to open the policy, you’ve just got to sit on it until the statute runs. And then it’s like, “Well, they didn’t protect the statute. Now here’s the demand. We’ll accept the policy for the four of us remaining.”
Bob Simon (10:30):
Yeah. Yeah, and then you have to wait for that statute to toll, make sure that it didn’t come through, that kind of stuff. Or again, in practice you find the lawyer that may be representing the other parties, you have to then write a joint letter to demand the policy limit with those magic words. And then what we do sometimes is agree to arbitrate, or mediate even, arbitrate the split up amongst that policy limit.
Kieran Doherty (10:53):
And just hope you represent them all. That makes it a lot easier.
Bob Simon (10:55):
It makes a lot easier.
Kieran Doherty (10:56):
That definitely makes it easier. But things get complex like that, and that’s why we’re always saying, no matter what, the more simple you can keep everything, the easier it is to actually pursue a policy that’s open down the line.
Bob Simon (11:08):
So talk to us about in California, the parameters of statute by section 999 and the guidelines that we have to make sure that we comply with, all the listeners here in California.
Kieran Doherty (11:18):
Yeah. And honestly, I kind of like it. Obviously we will see how it shakes out. I’m sure there’s going to be a lot of litigation around this. The carriers are going to try to fight everything they can. But it gives a guideline of what you have to do right now. These are things you have to do. And for the standard case, that it’s not a $10 million case on a $100,000 policy. It’s more, “Listen, this case is worth more than the policy, but it’s not a $10 million case, so the carrier might not pay it.” You have to have these certain things in there, and you have to have them on everything, but I like it for the cases where it’s not obvious. So you have to give them at least 30 days, and for me, we were given 30 days before. I think 30 days is a reasonable thing. It doesn’t hurt to give 35 days though, right? It’s one of those things, it’s just little things you can do to make it show how reasonable you are being, right? So give 35 days. So it’s 30 days if it’s by email or 33 days if via mail, but give 35 days no matter what. It just makes it show you’re being reasonable.
Bob Simon (12:19):
Yeah. We like to put in those letters, “If you need anything else, please contact us. We’ll be willing to help you out. If you need an extension, let us know.”
Kieran Doherty (12:28):
And you have to have a clear and unequivocal offer to settle all claims within the policy limits, including the satisfaction of all liens. And we have an example. We have an example. We wrote just a sample if you want to send a CCP-999 demand, so feel free to reach out. We have that if you need it. You need to offer a complete release for all present and future liability. You have to include the date and the location of the loss, the claim number if known, but you probably should know the claim number, a description of all known injuries sustained by the claimant.
(13:05):
So that gets into, “Well, what is a description?” That I think is going to have some litigation around it, but I don’t think it hurts to be more descriptive there. And what I like to do is break it down, and for me, I like to take the medical records and surmise them in a paragraph in plain English, that a juror could understand exactly what I’m saying, right? Instead of copying what the doctor says, I take the information, synthesize it, and write a few paragraphs that if a juror read it, they’d be like, “That’s pretty clear. I know what their injuries are. Why didn’t you pay this?” Because they don’t understand the medicine. If you just copy and paste the doctor’s records, the jurors are going to be like, “Okay, that’s medical terms. I have no idea what this says.” Just take that and put it in a language a jury can understand.
(13:51):
And then you have to have reasonable proof, but that’s medical bills, records. I don’t think that has changed, because before it had to be a reasonable demand. So it was a reasonable demand, you had to include reasonable information. So that one hasn’t really changed at all.
(14:09):
You also have to send it to the email address or physical address designated for the receipt of time limit demands if it’s been provided to the department of insurance. I haven’t looked in the last week or two, but I have not been able to find any carriers that have specifically designated that yet. So you want to send it to the insurance representative assigned to the claim. And I think as a best practice, you probably want to just confirm a week before sending them the demand. Reach out to that adjuster, be like, “Hey, just confirming you’re still handling the case, right?” Because then when you send the demand, it’s not like, “Well, that adjuster’s no longer with us,” or, “The case was transferred.” You have the information a week before, they confirm they’re still handling the case, you send it directly to them.
Bob Simon (14:51):
Yeah. So then let’s talk about now … okay, we talked about a lot of the pre-litigation stuff. And again, reach out, go to justiceteamnetwork.com. We can answer any questions, provide examples. But I guess I’ll talk about you’re in litigation, right? You think the policy’s open. So a lot of cases we see is there’s a 50,000, 100,000, even $250,000 policy, and the client had a good workup for a spine injury. We do a lot of spine injury cases. There was a recommendation for spine surgery and the carrier just said, “I’m going to call your bluff. I don’t think you’ll get it.” They get it, right? We’re like, “Definitely worth more.” So now we’re litigation, so what do you do? The policy’s likely open, you get into litigation. Do you just never make another demand and wait for trial? What happens?
Kieran Doherty (15:37):
So I’ll kind of step back a little bit, right? You’re talking about the recommendations out there and you made the demand and the carrier hasn’t paid it. Case by case basis, but once that determination is made that they’re not going to pay it, you’ve already sent it, you can sneak in multiple more demands sometimes and say, “Pay us the policy.” And-
Bob Simon (16:04):
Reasonable, reasonable, reasonable.
Kieran Doherty (16:06):
You make the demand again and you say, “Hey, I think there might’ve been a mistake. This is clearly worth the policy limits. I’ll give you 15 more days.” With CCP it has to be … but if this is in litigation now, we’re talking in litigation, “Pay us the policy.” Get a 998 out there. A lot of the times, I would say seven, eight times out of 10, if they haven’t paid it and they’ve made that decision, they’re going to stick with it. We have cases where they’ll reject a policy demand nine, 10 times and then it comes to us and they’re like, “Oh.”
Bob Simon (16:37):
“Oh, we want to pay now.” It’s like, “Well, what changed?” So that makes it easier for the bad faith case. But a lot of times lawyers miss this, that you should make a demand over that policy.
Kieran Doherty (16:47):
100%.
Bob Simon (16:47):
And what happens on the backend? Kieran, you’ve been there. What happens in the defense side when that over policy happens?
Kieran Doherty (16:56):
It’s a round table with everyone. Especially it’s in litigation and then you outline it nice and clear why it’s open and the demand is now the demand of the case, not the policy anymore. It’s what the case is worth. And that’s now going to everyone. The executives are getting onboard. They might not have seen the case before and then they’re like, “Uh-oh,” and now they need to make the decision. “Okay, this is a case that we’re going to pay over policy to get this done with now because we have no defense.” And you’ve got to get it in front of those executives. They’re the ones who have the money to pay over policy.
Bob Simon (17:30):
So keep making those demands. Again, it might be read to a jury later, so be nice about it. Put words in there like, “Protect your insured. We don’t have to take a judgment against them. We think the carrier should have to pay these things. We please tell you, don’t let a large judgment against your insured. We encourage you to share these letters with your insured and let them them know that they have right to their own counsel.” What’s a good trick for you if you know the carrier’s not putting those letters in front of the client, the actual insured who could hire a lawyer to tell them, “Hey, please protect me.” What are some tricks you’ve learned to be able to make sure it gets in front of them?
Kieran Doherty (18:03):
So a couple ones. I think you touched on being nice. That’s the most important thing. You want to make yourself look out to be the nicest person in the world, and professional and not attacking anyone. Because even if you’re right, no jury later on … they’re like, “Yeah, this guy was an asshole,” you know? But to get that in front of the people in the demand upfront, I say, “I’m sure you’ve been sharing this with your insured the whole time. Please forward a copy to this to them. Let them know. You already told them they’re allowed to get their own counsel to protect them. If they don’t know where to get counsel, they can contact the California state bar and they’ll help them.” I put that in front of them because I’ve seen on the adjuster side where people don’t know where to get counsel. They’re like, “Well, where do I get an attorney?” And listen, as an adjuster, it’s like, “Well, that’s between …” But realistically, you can direct them to the California state bar as an adjuster. Most adjusters won’t do it, but once someone knows where they can get an attorney, they’re more likely to. But then also we’ll send RFAs, requests for admissions, and say, “You have to put some in there that they can answer. You can’t just have objections. So admit you were driving the 2017 Honda Accord.”
Bob Simon (19:16):
“Admit your car color is red.”
Kieran Doherty (19:18):
Little ones that they have to answer, they have to put in front so there’ll be verifications. And then admit that you know that a policy limit demand was made on X date. Admit that you know a second policy limit demand was made on X date.
Bob Simon (19:28):
So you’re pretty much drafting the way to win your case in a bad faith case and RFAs and your underlying litigation case. You’re actually tailoring them for the jury instructions.
Kieran Doherty (19:38):
Yeah, and you’re making sure the insured understands what’s going on, because a lot of times they don’t. And you want them to have their own counsel so they’re protected, right? You want them to be protected. But also, if they have their own counsel pressuring the carrier, you’re more likely to get a case resolved above the policy for the actual value of the case.
Bob Simon (20:02):
Okay. All right, so then you’re making demands and litigation. So how often are you actually seeing these carriers pay you over policy without getting a verdict?
Kieran Doherty (20:13):
They want you to think never, right? If you ask this to a carrier, they would say, “That never happens.”
Bob Simon (20:19):
We see it quite frequently.
Kieran Doherty (20:20):
And so when people ask me, yeah, we see it all the time. But when they ask me how, like, “What case does that?” I’m like, “Honestly, the case that the counsel was super polite, super professional and gave them multiple chances in the most professional, clean way.” There’s a case where you’ve got like six times, “Hey, I think you might’ve made a mistake.” Or then they’re asking like, “Hey, I need this. I need your client’s depo.” “You didn’t take the depo in the eight months that this has been in litigation? But hey, no big deal. I’ll extend it for two more weeks. Just get my client’s depo in that time.” They get the client’s depo [inaudible 00:21:01].” You’re just giving them, giving them, giving them everything they need. And when you give them everything they need and they don’t do it …
Bob Simon (21:07):
What are they going to say?
Kieran Doherty (21:09):
That’s when all of a sudden the defense firm comes in and it’s like, “How do we make this right?” Right away? “How do we fix this?”
Bob Simon (21:17):
And usually once that happens, they bring in a new defense firm that’s not in-house for the carrier to try to set it right. And they ask for confidentiality, which is fine, and these things once you get there to protect your client. Okay, okay, okay. But just remember, when you have an open policy case, you better be ready to try the case and go to war. That’s the way I look at it. If you want to be like, “All right, you want to take an open policy case?” Then you’ve got to make sure you have a pristine client that’s going to do well in front of a jury, because the defense lawyer has to pretty much go for the home run, keep it under policy or defense verdict at trial. They have to. They can’t ask for more or else it’s kind of saying, “Hey-
Kieran Doherty (21:52):
And no matter how clean the open policy is, it really just depends on … and the ebb and the tide flows with each carrier. Sometimes they’re going to be like, “We’re really strong. We’re taking every open policy, it doesn’t matter, we’re taking every single one to trial.” And sometimes, “We’ll settle.” And you don’t know. It just ebbs and flows, so you have to be prepared. Every open policy case, you have to look at it as if it’s going to trial
Bob Simon (22:12):
Yeah, and talk to your networks. Some carriers are more apt to pay before making you get the verdict and some one’s just won’t pay no matter what, which could be a very promising invitation to you to try your good cases. And people always ask us, “Well gee, how come you guys are trying so many cases?” It’s like, well, a lot of these are either open policy cases or cases that they refuse to be reasonable on. How many verdicts have we had, not many, which is less than our demand.
Kieran Doherty (22:37):
Yeah. And listen, it’s always better for the client to settle, but if they’re not going to pay you a reasonable value, the policy is the policy. And I will say, the policy is the policy, but we’re not paying if the policy changes after a verdict is there. You’ll hear the policy is the policy. We’re not paying over the policy.
Bob Simon (22:51):
Yeah. So let’s talk about post verdict. Okay? You go to trial, you have this open policy case, you get a verdict over policy. That is very much likely, in my opinion, to be paid than not paid because of the pressure on the backend. So the insurance company has two paths. One, they write a blue sky letter. Kieran, what’s that?
Kieran Doherty (23:16):
Indemnity, hold harmless, whatever. It pretty much says, “We will pay any verdict against you. We messed up. We’ll take care of it. So we’re going to go to trial, but don’t worry, the policy doesn’t matter anymore. We’re going to pay any verdict.”
Bob Simon (23:30):
Yeah, and a lot of times when you go into bad faith cases, I’ve seen some of these letters. They write their insurer this blue sky letter that says, “We’ll take care of anything.” So now they know that they’re going to take the chances to get hit at trial, right? Okay, so let’s say you hit that verdict over policy. What’s the next best practices you should do as a lawyer right after that verdict comes to try to get your client paid?
Kieran Doherty (23:51):
Send another demand right away. Especially if you’ve got a nice 998 out there, you’re putting the pressure on to say, “Listen, here’s the verdict. Pay us now.”
Bob Simon (24:03):
Yeah. And if you go to justiceteamnetwork.com, we’ll be able to send you some of those examples. Just ask. And it’s as simple as, “Here’s the verdict. Here’s how much prejudgment interest. Here’s our costs. This is the total amount owed by your insured.” Especially if they’re insured as a company, “Hey, we’re going to take a judgment against your insured.” They don’t want a judgment against the company. They’re insured as a company because that has real teeth to it. “Please pay by this date. We’ll go no further. And by the way, if your client hasn’t had a consultation, here’s three fantastic bad faith lawyers,” which you can include me on that and Kieran on that list, listeners, to the letter after your verdict. No problem. But it works.
Kieran Doherty (24:39):
Yeah. Oh, yeah. And it’s one you mentioned; if they had the personal attorney advising them already, once they have the verdict, if there’s already been an attorney in the background the whole time … because that attorney is setting this up in the background too for them. They’re saying, “Pay, pay, pay, pay.” And now there’s a verdict that said, “You should have paid,” and they didn’t, that makes it a lot easier. And that’s why it’s so important to, in your letter, say politely, “Please provide a copy to your insured and make sure they know they’re allowed to obtain their own counsel,” which the carrier should be doing themselves. And they’ll send a letter and it’ll say it. But the conversation, depending on the adjuster they have, “Oh yeah, we just have to send that. Don’t worry about it.” But if they keep seeing it from you and them, it’s like, “Well, why does everyone keep saying this? Maybe I should talk to an attorney.”
Bob Simon (25:23):
Exactly. And unfortunately, a lot of carriers take advantage of lower socioeconomic people, a lot of Hispanics that don’t speak English. They really take advantage of them. So don’t feel like you have to write just a letter in English. If you have a Hispanic defendant on the other side, write that letter in Spanish and ask it to be sent to them. Do everything you can to apply pressure to that insurance company, because a lot of these people just don’t know their rights. Their own insurance company, they think, is there to serve and protect.
Kieran Doherty (25:50):
Yep. And the carrier, when they’re getting pressured from multiple angles, that puts a lot of pressure, because now in those round-tables I’m talking about, it’s not just the plaintiff pressuring them. They also have the insured’s personal counsel pressuring them. And then it has to be taken into account and it makes a big difference.
Bob Simon (26:10):
And I’ve seen some wobblers on whether or not the policy’s open. They take it the distance, they go get the verdict, and then I see these very large payments go out. What’s the number one thing that insurance companies fear over anything? What’s the number one thing that makes them pay, Kieran? Don’t say ice cream.
Kieran Doherty (26:29):
I mean, a judgment against their insurer is one of them, for sure.
Bob Simon (26:31):
But what is it? What’s the one thing that they don’t want breathing down their back? Pressure, pressure, pressure, pressure.
Kieran Doherty (26:40):
There you go. They don’t want anyone on them. I mean, they don’t want the possibility of their insurer being like, “Listen, I’m taking this bad faith myself.” Especially you see this sometimes with companies where they actually have assets and they’re like, “F that. We’ll pay the judgment and we’re going to go and we’re going to get punitives on this.” You’ll occasionally see that, and that’s when they’re just real quick like, “All right, well let’s get this done.” Because the company has to say, “We’ll pay this judgment, but we’re coming after you and we’re going to trial in the bad faith and we’re getting the punitives.”
Bob Simon (27:14):
Yeah, make those demands. I’ve been learning those lessons over the years after the verdict. Make it, you’ll be surprised. I had a big one over policy against a very well-known carrier and made that demand. And within a week, that full amount for many, many millions was on our desk. On the desk, with no letter, no nothing. Just like, “Here you go.”
Kieran Doherty (27:34):
And it’ll happen even in trial there. They’re like, “Oh, let’s mediate.” And this is a ridiculous offer, right? Just ridiculous. And the policy’s not open, so that’s why this offer is ridiculous, but we just want to get it done. And then all of a sudden when there’s a verdict, “Mr. Simon, here you go.”
Bob Simon (27:50):
But one last practice point here is you can have them sign what’s called a white waiver. So a lot of times carriers don’t want to go to mediation on an open policy case because they’re afraid if you go there and they make offers over policy, it’ll be an admission that the policy’s open. So you can do what’s called a white waiver, which not only has a confidentiality mediation, but you cannot use that in a bad faith case to say that they did it. So they can go to mediation and actually make offers over policy. So again, being that reasonableness standard, put it in your letter and say, “We’re willing to offer you a white waiver to go to mediation so this can’t be held against you in the bad faith case. We’re willing to sign X, Y, Z to protect your insured’s interest so you can talk extra-contractual money.”
Kieran Doherty (28:27):
And also with the mediation is that if the policy’s open, I’m not going to mediation unless the carrier is confirming to me that they’re coming to the mediation over policy. I’m not going to go to the mediation to mediate whether the policy’s open. That’s it.
Bob Simon (28:42):
Yeah, that’s pointless. And there’s a lot of good mediators out there you can pick who understand insurance bad faith coverage. Reach out to us and we can tell you.
Kieran Doherty (28:49):
It makes a big difference who the mediator is on these open policy cases. That’s a huge difference because the carrier will trust some mediators. If they say the policy’s open, the carrier’s like, “All right.” They maybe didn’t think it was, and they’ll change their mind. So …
Bob Simon (29:04):
All right, ladies and gentlemen, that was 30 minutes of absolute fire for open policies and you should have picked up some absolute practical tips to make sure you have ironclad demand letters to open those policies, how to actually get paid if they don’t pay that policy limit and how to take that golden opportunity for that verdict that you’ve been searching for.
Kieran Doherty (29:23):
Be nice and be reasonable.
Bob Simon (29:24):
Be nice and be reasonable. Be kind and be good. Ladies and gentlemen, go to justiceteamnetwork.com if you have any questions. This is the Justice Team podcast and today we’re with Karen.
Kieran Doherty (29:34):
You can call me Karen.
Bob Simon (29:36):
But don’t call me lately. All right everybody, thank you for listening.
