This final article in the series addresses what is perhaps the most
important aspect of a coverage case—the trial theme and values. These are the
elements of a case that put the case on the level of the jury and allow the
jury to identify with your position.
Demonstrative Aids
Demonstrative aids are a must in a coverage case. The policy provisions
cannot be read from the witness stand. They must be enlarged or contained in
juror notebooks so the jury can follow along and be able to understand how the
policy is constructed. Oftentimes, the language of the policy may have to be
diagrammed in such a way that the jury can understand it.
Surveys have shown that jurors are much more visual than they were 50 years
ago. The ability to comprehend and understand auditory input has been
diminished. Graphics, illustrations, highlighting, etc., are a must,
particularly for those Gen X, Gen Y, or Millennial jurors.
Themes and Values
Themes and values are an integral part of every case. In the coverage case,
they are a little more difficult to construct and implement. Coverage
litigation generally does not present a lot of moral or value judgments.
Following are some examples.
Other Coverage Available
One theme that has been used with success is that the insured had other
coverage offered that would have covered the loss and chose not to purchase it.
This is a very convincing theme. The insured is trying to obtain something they
did not pay for and in fact rejected. This is not allowed in other contractual
situations and should not be allowed here. It is especially easy to use in voir
dire with practical situations that would apply to every juror.
Bad Acts of Insured
In many liability cases, the conduct of the insured may be especially
reprehensible (though potentially covered). The theme in these cases is whether
this type of conduct should be covered. Do we as society want to encourage this
conduct by insuring it?
Inconsistency of Positions
In much of the coverage and bad faith litigation involving liability
policies, there is an excellent opportunity to point out how the insured has
taken one position before one court or jury and is now taking an entirely
different position before the present jury. An excellent example is
State Farm Fire & Cas. Co. v. Gandy, 925
S.W.2d 696 (Tex. 1996). This was a case where a stepfather repeatedly molested
his stepdaughter. At the trial of the underlying case, the focus was on the
reprehensible nature of the conduct and how it should be punished—not only with
actual damages but with punitive damages as well.
At the coverage/bad faith trial, the theme was that if there had been a
better defense provided, the insured may have escaped liability. It was pointed
out at trial and on appeal how the plaintiff was claiming in the underlying
case that the conduct was indefensible, yet before the current tribunal she was
claiming (as assignee of her stepfather) that a better defense would have
resulted in no liability. Either she was molested, or she was not. If she was,
then no defense would have made a difference. If she was not, she was entitled
to no recovery. The supreme court of Texas noted the inconsistency, and it
played a significant part in the decision.
Failure To Respond to Request for Information
Another theme is the failure of the insured to respond to request for
information. In these cases, the insurer has repeatedly requested information
to evaluate the claim. The insurer eventually gives up and denies the claim. At
the coverage trial, the theme is that if the insured wanted to press the claim,
he or she should have provided the information. Because the insured did not
provide the information, the insurer denied the claim. If the insured had
provided information, the claim would have been evaluated and perhaps paid.
Because the insured failed to do what was required under the policy, the
insurer had no choice but to deny the claim.
Many other themes that have been used are not listed here. However, it is
important to note that each theme must be specially crafted to fit the facts
and legal issues of each case.
Charge
In a coverage case, one of the most important stages of the case is the
charge. However, the charge has importance well before any trial has commenced
and any witness has been put on the stand.
Discovery
The charge should be written well in advance of the trial and should be the
template for written discovery and depositions. It defines the relevant issues
in the case, what evidence will be relevant, and on what issues the party will
have to persuade the jury.
Policy Interpretation
The charge will also contain instructions on many issues important to policy
interpretation. Issues such as who had a duty will be determined in the charge.
The placement of the burden of proof will also be addressed there. If an
ambiguity is being submitted to the jury, the manner of resolving the ambiguity
will be addressed. Likewise, presumptions that may be created under the law
will also be addressed in the charge.
Appeal
Without question, most of the reversals on appeal occur as a result of
charge error. This is the mother lode for reversal if the insurer is concerned
about a large verdict. It cannot and must not be overlooked. When there is the
possibility of a large verdict, counsel for the insurer must affirmatively work
to build error into the charge. Counsel must be asking for instructions or
questions that he or she does not want the court to give. A successful charge
lawyer is one who does not win every argument—but one who wins the important
ones even though he or she may lose the unimportant ones.
Conclusion
The issues discussed in this four-part series are not unique. They apply to
every coverage case. They apply whether the litigant is the insured, the
insurer, or the plaintiff suing as an assignee or judgment creditor. Litigants
who pay attention to these rules and follow them will greatly increase their
chances of success.