Expert Commentary

Taking and Defending the Adjuster's Deposition (Part 2)

The first part of this series dealt with whether the adjuster's deposition should be taken at all. It was pointed out that in many cases, the deposition of the adjuster is totally irrelevant. This second part of the series deals with the most important aspect of the adjuster's deposition—preparation for the deposition. It is so important that two parts of this series will deal with the preparation. The success or failure of the deposition all turns on the preparation.


Courts and Coverage
January 2013

The performance of the adjuster at the deposition is proportionately related to the time and effort spent preparing him or her for the deposition. If the appropriate amount of time and effort is spent, generally the deposition will go well, and the case can be defended. On the other hand, if an insufficient amount of time is spent preparing the witness, in most cases, the deposition will not go well, and the case cannot be defended.

Bad faith cases are generally won or lost at the deposition stage. There is a corollary to this rule, which is that the file will serve as a template for taking and defending the adjuster's deposition. The better the file is documented, the easier the deposition is to defend. The poorer the file is documented, the more difficult the deposition is to defend.

Knowledge of the File

The first step in preparing an adjuster for a deposition or in taking an adjuster's deposition is knowledge of the file. The attorneys preparing the adjuster must have not only a working knowledge of the documents but also an intimate knowledge of them. They must know where the problems are in the file. They should have created a timeline to know what was happening when another event in the case was occurring and must recognize whether the adjuster takes inconsistent positions in the file.

This must be fully explored prior to preparing or taking the deposition. Then, if the attorney is preparing the adjuster for the deposition, this knowledge must be imparted to the adjuster. The adjuster must also have an intimate knowledge of the file and the implications of everything that has been written in the file. There can and should be no surprises based on what is contained in the file. There is no excuse for the adjuster to be caught off guard.

In many circumstances, several hands may touch the file. The adjuster must also be familiar with what others in the company have written in order to be prepared for questions regarding their conduct. If the supervisor or other adjuster has written notes that are inconsistent, then the adjuster must be prepared to specifically address those inconsistencies.

Mental Status

Part of the role of the attorney in preparing an adjuster for deposition or in taking the deposition of an adjuster is to play the role of psychiatrist. The defense attorney must have an accurate assessment of the mental status of the adjuster. The relative psyches with which defense counsel must deal run the gamut. At one end of the spectrum is the adjuster who thinks he or she knows it all and is anxious to give his or her deposition. These are the most dangerous because they tend to think they are smarter than anyone else is and are unwilling to listen to advice, and it is very easy to lead them into a trap based on their own vanity.

How do you deal with this situation? Sometimes you cannot. Such self-important adjusters are so set in their ways they will not respond to any type of advice. Others are more pliable, and the job of defense counsel is to show them how they can be led down the primrose path and made to say things they do not want to say. Once they come to this realization, then generally they will be responsive to the advice that is being offered.

On the other end of the spectrum is the adjuster who is terrified of depositions and wants to be any place other than in the deposition. If you are the lawyer who is taking the deposition of the adjuster, it is beneficial early on to perform some psychoanalysis to determine the mental psyche of your witness and to conduct your deposition in a manner that takes advantage of that mental psyche.

Legal Context

It is impossible to anticipate every question that may be asked during a deposition. Therefore, in preparing an adjuster for deposition, it is critically necessary to be intimate with the legal context in which the case is going to be tried. For example, if the case is a first-party bad faith case for breach of the duty of good faith and fair dealing, the standard is failing to pay a claim in which an insurer's liability has become reasonably clear. (See Universe Life Ins. Co. v. Giles, 950 S.W.2d 48 (Tex. 1997).) That is the question for the case. The insurer does not have to be correct in its determination; in fact, it may be wrong. However, that does not result in liability.

The focus of the adjuster in the preparation and in answering the questions is this—at the time the decision was made on the claim, was the insurer's liability reasonably clear? Was there information requested that had not been provided? Was there conflicting evidence? Were there other policy defenses that were still in play? All of these issues would prevent the insurer's liability from being reasonably clear. The adjuster does not have to establish that his or her decision was correct, only that he or she had a reasonable basis for taking the position that he or she did. If this is accomplished, there is no bad faith or breach of the duty of good faith and fair dealing. This is the legal context he or she must keep in mind when answering the questions from counsel.

The same is true for the coverage deposition. It is critical that adjusters be intimate with the legal standard governing the coverage issue and how the evidence impacts it. They must be able to filter the questions that will be asked through the legal standard counsel has given them that will determine the coverage issue to appropriately answer the questions that will be presented. The questions to the adjuster must also be in the appropriate legal context. Counsel for the insured must be intimate with the appropriate legal standard. If this is so, the information obtained in the deposition may be case dispositive. This is particularly true if the adjuster has been designated as a corporate representative. On the other hand, if the attorney is not familiar, he or she may be asking questions that are not binding on the insurer and are irrelevant at trial because the wrong standard was used.

Factual Context

Just as adjusters must be aware of the appropriate legal context when answering the questions, they must also be aware of the factual context in which they are answering the questions. They must be familiar with the prior testimony in the case—particularly with respect to prior testimony of the insurer. One of the worst things that can happen in a case is for two witnesses from the same company to testify inconsistently regarding their understanding of material facts in the case. It gives the appearance of incompetence and that the left hand does not know what the right hand is doing. If the appearance can be created for a jury that one part of the company is unaware of what is happening in another part of the company, it is not a far reach for the jury to conclude that the company does not have proper policies and procedures in place for the handling of claims and that bad faith has been committed.

Sometimes it is impossible to avoid inconsistencies in testimony. However, these should be few and far between. Also, if the witness is aware that he or she will be testifying inconsistently with another witness, it will not come as a surprise during the deposition, and a logical and cogent explanation can be prepared for the inconsistency.

Conclusion

These four tips address the first part of the preparation of the adjuster for the deposition or the preparation of the attorney who is going to take the deposition of the adjuster. Part 3 addresses the remaining steps to be taken to prepare for the deposition of the adjuster. Part 4 covers the appearance of the adjuster, as well as objections and privileges that can be asserted at the deposition.


Opinions expressed in Expert Commentary articles are those of the author and are not necessarily held by the author's employer or IRMI. Expert Commentary articles and other IRMI Online content do not purport to provide legal, accounting, or other professional advice or opinion. If such advice is needed, consult with your attorney, accountant, or other qualified adviser.

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