Those who suffered property losses in the Northern California wildfires are no doubt looking to insurance coverage to restore the damaged property. Most of us never look at our insurance policies until we have a loss and claim. That means there may be some surprises as to what you have or do not have in terms of coverage. Here are some thoughts:
Do you come to a full stop at a stop sign? A rolling stop is a violation of California Vehicle Code 21802. Vehicles are required to come to a complete stop when approaching a stop sign and to yield to all vehicles at an intersection controlled by stop signs until it is safe to proceed.
Right-of-Way Rules are published as a matter of public interest and information. It is important to review the Rules of the Road from time to time. The Following is from the California Driver Handbook – Laws and Rules of the Road:
Right-of-way rules, together with courtesy and common sense, help to promote traffic safety. Never assume other drivers will give you the right-of-way. Yield your right-of-way when it helps to prevent collisions. It is important to respect the right-of-way of others, especially pedestrians, motorcycle and bicycle riders.
Respecting the right-of-way of others is not limited to situations such as yielding to pedestrians in crosswalks, or watching carefully to ensure the right-of-way of bicyclists and motorcyclists. Motorists must respect the right-of-way of others by not violating traffic laws, such as failing to stop at a stop sign or traffic light, speeding, making unsafe lane changes, or illegal turns. Statistics show that right-of-way violations cause a high percentage of injury collisions in California.
Pedestrian safety is a serious issue. A pedestrian is a person on foot or who uses a conveyance such as roller skates, skateboard, etc., other than a bicycle. A pedestrian can also be a person with a disability using a tricycle, quadricycle, or wheelchair for transportation.
I recently came across this helpful article by fellow insurance attorney for policyholders, Erica Villanueva at the fine firm of Farella Braun + Martel LLP here in San Francisco. Her summary of recent appellate court decisions includes pointers for attorneys in seeking a Motion to Stay an insurance coverage action:
“When a liability insurer wishes to avoid all coverage obligations with respect to a claim against its insured, it may seek an adjudication that it has no duty to defend or indemnify the policyholder. If the insurer files for such declaratory relief while the underlying litigation is still pending, California insureds will frequently move to stay the coverage action, pursuant to Montrose Chemical Corp. v. Superior Court, 6 Cal. 4th 287 (1993) (“Montrose I”). The purpose of such a Montrose stay is to avoid the risk of prejudice to the insured in the underlying action, if it is simultaneously forced to litigate an insurance coverage dispute.
In these situations, the insured faces a dilemma: Should it immediately move to stay the coverage litigation, or wait until it has filed an answer and cross-complaint? The more principled position might be to minimize any public filings which could force the insured to take positions on factual matters at issue in the underlying litigation. However, a recent California Court of Appeal decision, Great American Insurance Company v. Superior Court, 178 Cal. App. 4th 221 (2009), suggests that the better practice may be to answer and cross-complain before moving to stay … Read the entire article
After our presentations, we will engage in a live question and answer session with participants so we can answer your questions about these important issues directly.
Each year, Thomson Reuters lawyer rating service compiles the prestigious Super Lawyers and Rising Stars lists. Outstanding attorneys who have attained a high degree of peer recognition and professional achievement are recognized as Super Lawyers and Rising Stars. The selections are made using a patented multiphase process that includes nominations, an independent research evaluation of candidates, and peer reviews. The result is a credible, comprehensive and diverse listing of exceptional attorneys.
I have a passion for dispute resolution. It comes from my heritage – a dad who was a lawyer in the Midwest in the 50’s, 60’s and until he retired at 85 years old in the 90’s. He was a master negotiator but at the same time a supreme diplomat. His best friend – my Godfather – told me that Dad could tell someone to “go to hell” and they thought they received the Congressional Medal of Honor.
I spent a number of years as a traditional “defense” lawyer in the civil litigation arena. As part of that, I became involved in the early Insurance “bad faith” cases. I tried – as a defense lawyer – the first two first party bad faith cases to go to verdict in California (before Egan was tried in November 1974). There was no bifurcated trial with the financial worth of the insurer not being known by the jury until a “second phase.” That was the first thing the plaintiff’s lawyer wanted the jury to hear before the 1988 legislation allowing cases to be bifurcated to keep financial worth out of the case until a jury decided in phase one that punitives were warranted.
Now as a plaintiff’s (primarily) lawyer I hope I have a keen sense of “worth”. That is, what is the value of the case, and how much is it going to cost to get there? That is a critical assessment from Day One for any plaintiff’s lawyer. Not all cases are “bell ringers” with high 6 or 7 figure potential – real potential, that is.
I hope I carry a bit of Dad’s approach in my practice. I fervently insist on early evaluation, negotiation and even mediation of disputes. There are many reasons why. A primary one is that in my experience an early resolution means a larger net recovery for a client at a time when the money means more and can do more for the client at that point. Indeed, clients often ask me early in our discussions, “Do you think you can settle my case?” They are not enthusiastic about going through a trial, possibly an appeal, and waiting years to – hopefully – get a monetary recovery.
Key to any lawyer representing clients in civil litigation is the skill and insight to look down the line and see if it is worth all the hard work that a case requires. It is imperative that both sides work up the figures so they can focus on where the point of a “best” result lands. Maybe an early discussion about resolution is worth a try to see if the financial risk and emotional turmoil for a client can be avoided by a resolution using the diplomacy my Dad used to get a “just” result.
Guy O. Kornblum has been a civil trial and appellate lawyer for over four decades. He is the author of “Negotiating and Settling Tort Cases: Reaching the Settlement”, published by Thomson West and the American Association for Justice (rev. 2017).
We are proud to announce that KCEH Senior Associate Nicholas J. Peterson has been admitted to the Edward J. McFetridge American Inn of Court. The American Inns of Court are dedicated to promoting the highest levels of professionalism in the practice of law, with a mission to inspire the legal community through example, education and mentoring. The principal purpose of the Edward J. McFetridge American Inn of Court is to instill and cultivate the best qualities of the great trial advocates: honesty, courage, industry, judgment, eloquence, wit, and fellowship.
Nicholas Peterson represents corporate and individual insurance policyholders seeking coverage and bad faith damages. He also assists clients in pursuing claims in both federal and state court related to various commercial disputes, contract matters, personal injury, wrongful death, medical malpractice, elder and dependent adult abuse, product liability, intellectual property and employment disputes. His clients include patients, doctors, architects, engineers, hotel owners, and financial advisors, as well as parents, children and loved ones of the deceased and injured.
Interestingly, the practice of law is a “second career” for Mr. Peterson. From 1994 through 2008, he performed and recorded a number of albums as a drummer, percussionist, and singer with numerous bands in his hometown of Seattle, Washington. In fact, in his last music project before attending law school, he recorded an album of original material with a well-known Seattle band that achieved “Gold” status in the United States, both “Gold” and “Platinum” status in the United Kingdom and was the #1 Album of the Year in 2008 for National Public Radio (NPR), Mojo Magazine and Pitchfork Magazine. To date, Nick still enjoys playing around town and providing instruction to other budding drummers whenever he gets the opportunity.
Mr. Peterson is a member of the Bar Association of San Francisco (BASF) and serves as a co-chair of its Barristers Club’s Insurance Practice Section. He is also a member of the San Francisco Trial Lawyers Association and the Northern California chapter of the Association of Business Trial Lawyers.
Insurance Coverage for Policyholders
Insurance Bad Faith Claims
Medical and Legal Malpractice
Punitive Damage Actions
Financial Elder and Dependent Adult Abuse
U.S. District Court Northern District of California, 2013
U.S. Court of Appeals 9th Circuit, 2013
University of California, Hastings College of the Law, San Francisco, California
J.D. cum laude – 2012
Northwest University, Kirkland, WA
B.A. in Philosophy/Religion, summa cum laude, 2000
Unfortunately, stories of elder abuse, where someone who is elderly is physically mistreated by family, friends or a medical facility, are common. The stories can be gruesome about neglect, lack of caring and other wrongs committed on the elderly. However, a more prevalent form of wrongdoing involving the elderly is financial.
Mr. and Mrs., 74 and 72 respectively, purchased several life insurance policies over the years as part of their estate plan. The policies were variable life, which means that part of the premium paid covered the cost of insurance and the rest went into mutual funds to allow the policies to build up cash value over the years so that, at some point, they would no longer have to pay premiums to keep the policies in force, assuming a reasonable return on their investments.
The plan worked for them. After 20 years their policies had significant cash value and, given a continued rate of return of 7%, the policies would sustain themselves and pay on death to a trust. The trust would benefit the surviving spouse and pay any remaining sums to their children. Both Mr. and Mrs. had policies on their lives to protect the other.
The plan continued working well until an insurance agent contacted them and told them he could increase the amount of life insurance protection with no increased cost of insurance and without payment of any premiums. He proposed a tax free (i.e. no taxes would have to be paid if they cashed in the old policies) “exchange” of the old policies for new ones through a different company. There would be no insurance and the cash from the old policies would support the new policies. They bit. What a good deal, they thought. More insurance for the survivor, and it did not cost any more than they were already paying.
Well, the old saying: “If it sounds too good to be true, it probably is,” was applicable to this bit of fraudulent conduct by the agent. What he did not tell Mr. and Mrs. is that, as a result of the exchange, the cash value of the new policies would be less than the old, and that it was likely these policies would lapse (because they would require a significant amount of new premium) within the next couple of years, well before either Mr. or Mrs. was likely to die. They were both in good health (otherwise it was unlikely that any new company would accept their application for the exchange).
Why a diminished cash value? Because the new policies had a higher cost of insurance since the death benefit was increased, and there were surrender charges applied by the old company, which reduced the amount of cash going to the new insurer. Thus, there was less money to pay premium and also less money for the investment part, which was supposed to help continue to build cash value. There are also taxes and other charges for the new coverage and other negative features which make the exchange “unsuitable” for Mr. and Mrs.
In short, the agent should have never made the sale, nor should the new company have accepted the exchange because of this unsuitability and inappropriate replacement of the old policies for brand new ones.
In California, what the agent and insurance company did violates our Insurance Code, section 785, which states that: “All insurers, brokers, agents and others engaged in the transaction of insurance owe a prospective insured who is 65 years or older, a duty of honesty, good faith, and fair dealing.” In addition, our Welfare & Institutions Code, section 15610.30, prohibits financial abuse of an “elder or dependent adult.” An “elder” is someone 65 years of age, while “dependent adult” is defined by the circumstances of financial or physical dependency.
The definition of financial abuse is lengthy, but, arguably, it covers the “twisting” of one insurance policy into a new policy using the cash value of the former, when this transaction is to the financial detriment of the insured or beneficiaries. It applies where the perpetrator “assists in taking [or] appropriating ¼ personal property of an elder or dependent adult ¼.”
What the agent and the insurer did here is a form of financial abuse, which occurs when a victim is spotted who has significant cash value in older life insurance policies which have built up over the years. If you or someone you know is in the position that I have described in this article, be sure to alert them to the possibility of an unscrupulous insurance agent attempting to move the cash out of the older policies to newer ones.
Any proposed transfer of cash should be reviewed carefully. In most cases, it will not be suitable, but a determination by an independent financial advisor, such as a CPA or certified financial planner should be completed before agreeing to make the exchange.
And, if this has already happened, or you suspect it has to a loved one or friend, call our office for a free consult. There are legal remedies available in California for those who suffer this form of financial elder abuse.
KCEH is both unique and fortunate to have three of our principals Certified in Civil Trial Law by the National Board of Trial Advocacy. Guy Kornblum, Charlie Cochran and Joe Harbison each have achieved this level of both recognition and achievement. Certification means that each has fulfilled a rigorous qualification process.
(a) served as lead counsel in at least five jury cases;
(b) substantially participated in at least five jury cases which have proceeded to verdict;
(c) presented at least four closing arguments;
(d) presented at least eight opening statements;
(e) conducted cross-examination of at least fifteen expert witnesses;
(f) conducted direct examination of at least fifteen expert witnesses;
(g) conducted cross-examination of at least twenty-five lay witnesses;
(h) conducted direct examination of at least twenty-five lay witnesses; and
(i) conducted at least five voir dire jury examinations or (in courts which do not permit counsel to conduct voir dire examination) submitted proposed jury questions for the court at least ten times or a combination of examinations and submissions acceptable to the Standards Committee.
(a) By attendance and/or electronic participation in not less than forty-five hours in programs of continuing legal education in the specialty or ethics, approved by the Standards Committee, or
(b) By equivalent participation through, but not limited to, the following means, approved by the Standards Committee:
(I) Teaching courses or seminars in trial law or ethics;
(II) Participation as panelist, speaker, or workshop leader, at educational or professional conferences;
(III) Authorship of books, or of articles published in professional journals, on trial law;
(IV) A combination of the three subsections above.
These requirements have changed some over the years, but Guy, Charlie, and Joe fulfilled those that applied when they were certified. And more important they have continued to be re-certified every 5 years in order to maintain this certification.
We are very proud that our firm has 3 principals who have achieved this level of performance in Civil Trial Law, which is unique for a firm of our size.
Where there are fitness, recreation, and sports activities, there are injuries! Unfortunately, where there are injuries, there are lawsuits! Providers of these activities must take care to manage risk in two ways. First, they should take steps to reduce the likelihood of injury as much as possible. Secondly, they should do everything possible to protect themselves and their business entity from the risks of financial loss. A major financial risk is that of lawsuits by parties injured while participating in fitness, recreation, or sports activities.
Injuries in fitness, recreation, and sports activities arise from three sources. They result from either 1) accidents due to the inherent risks of the activity, 2) negligence (errors or mistakes) of the provider, co-participants, or others, or 3) extreme actions such as gross negligence or reckless actions. Generally, the provider is not liable for injuries resulting from the inherent risks of the activity, however, they are held liable for injuries resulting from their own negligence. A waiver can protect the provider from liability for injuries caused by provider negligence. A waiver generally does not protect the provider from liability for extreme actions.
Liability waivers, contrary to misconceptions of providers in the past, can be effective in protecting providers from liability for injuries resulting from the negligence of the provider. Waivers are inexpensive to obtain, easy to administer and store, and can help protect providers from the consequences of their own mistakes.
Legal terminology can sometimes be confusing. A waiver is a contract between the service provider and the participant signed prior to participation by which the participant agrees to absolve the provider of any fault or liability for injuries resulting from the ordinary negligence of the provider, its employees or its agents. The agreement relieves the provider of liability for injuries resulting from mistakes, errors, or faults of the provider and, in effect, relieves the provider of the duty to use ordinary care in providing for the participant.
The reader, however, will often encounter other terms such as release, disclaimer, and exculpatory agreement. These terms are usually used synonymously with a waiver and while there are minor differences, they are usually referring to the same type of agreement. Another common document is the informed consent agreement. Although some erroneously use it instead of a waiver, the informed consent is a different type of agreement. It is used to protect the provider from liability for the informed treatment risks of a treatment or program to which the individual agrees to be subjected (e.g., medical treatment, therapy, experiment, training program). In general, they are used when something is “done to” the individual. These are used in medicine and research and have recently been used by personal trainers.
The answer to this is Yes and No.
2) When one party has superior bargaining power over the other (e.g., teacher-student, employer-employee);
3) When the conduct is beyond ordinary negligence (e.g., gross negligence, reckless conduct, intentional acts);
4) When the waiver is to relieve one of a statutory duty;
5) When the waiver is not clear and unambiguous in its intent; 6) When fraud or misrepresentation is involved.
Waiver law is state law and, as such, differs greatly among states. In most states, a well-written, properly administered waiver, voluntarily signed by an adult, can provide service providers with protection from liability for injuries resulting from the ordinary negligence of the provider, its employees, and its agents. It is important that the reader remember three things about the above classification of the states: 1) although the classification is based upon about 900 waiver cases, the ratings are subjective and subject to disagreement among experts; 2) the law in each state is always subject to change (One new state supreme court decision could change the classification of a state overnight); and 3) that not all waivers protect in the lenient states and not all waivers fail in the strict states.
In any state, a waiver can fail for a number of reasons. A few of these reasons are explained below.
Language Requirements. The most common reason that waivers fail is because they are poorly written. A key guideline required in all states is that the waiver language be clear and unambiguous. If the waiver does not clearly specify the intent of the parties to release the provider from liability for negligence, the court will not enforce the waiver. Note, however, that what is considered clear and unambiguous varies from state to state. For instance, some states require the waiver to state that the signer is releasing the provider from “negligence” and must include the word “negligence.” Courts in other states do not require, but strongly encourage the inclusion of the term. Still other states simply say that as long as the intent is clear, the specific language is unimportant and accept such language as “release from any and all claims.”
Extreme Acts. Courts in most states enforce waivers of liability only for “ordinary negligence.” Courts in these states hold that enforcement of a waiver when the action resulting in the injury was gross negligence, reckless conduct, willful/wanton conduct, or an intentional act is against public policy.
Unequal Bargaining Power. Waivers are not generally enforced if one of the parties has a clearly dominant bargaining position. Examples would include a coach requiring a waiver of his players, a teacher and a student, and an employer and an employee. Courts generally hold that recreation, fitness, and sports waivers do not involve a clearly dominant position (e.g., health club waivers, waivers for a rafting trip, waivers to go into the pit area of a racetrack, waivers for skiers, and waivers to play recreational softball in a municipal or church league). Courts generally hold that such activities are optional, the participant does not have to participate, the participant can participate in another activity, and the participant can go to another provider — hence, there is no advantage in bargaining position for the provider.
Conspicuous Language. Most courts feel that it is important that the waiver language is obvious to the signer. Preferably the waiver should be on a sheet by itself. This removes the argument that the signer did not know what he or she was signing. On the other hand, if the waiver is included in the middle of the membership contract or on an entry form containing other information, the signer is apt to claim he or she failed to realize that he or she signed away important legal rights. This problem is compounded when the waiver section of these documents is not highlighted and set off in some way. Emphasizing the waiver section by using larger print size, a subheading, bold print, or placing it in a box would help. Failure to do this can result in an unenforceable waiver.
Inherent Risks. Waivers sometimes fail for failure to list the inherent risks of the activity. Courts in some states now require that the inherent risks of the activity be listed. This actually works to the advantage of the provider because including the inherent risks in a waiver provides evidence that the signer was aware of the inherent risks of the activity and assumed those risks. One caution — keep all discussion related to the inherent risks separate so that the signer will not confuse inherent risk with the negligence risks.
There are many other factors that can cause a waiver to fail — too many to address in this article. But the reader should remember that waivers can protect in most states and it is worth the effort to develop a good waiver and use it for protection.
This question was easier to answer ten or 15 years ago. At that time, the advice from this author was “Do not use waivers with minors. Waivers signed by minor or by parents on behalf of a minor are not enforceable!” Fortunately for providers, this is not always the case. The law has changed in many states.
It is still true that a waiver signed solely by a minor is unenforceable and provides no protection for the provider.
However, in 12 states, one or more parental waivers have been enforced or there are statutes to that effect.
So, what if the client is a minor? There is no downside to using a waiver with a minor client. Have a parent (preferably both) sign the waiver. If it is not upheld, it still helps with a primary assumption of risk defense. And your chances of enforcement are good in 12 states where parental waivers are currently enforced. In addition, there are 21 states listed above where the law regarding parental waivers is unknown — and the waiver could be enforced.
Waivers are the best single risk management tool available to service providers other than the prevention of the injury. Though it is difficult for recreation, fitness, and sport providers to understand:
WAIVERS CAN PROTECT THE PROVIDER FROM LIABILITY EVEN WHEN THE PROVIDER IS NEGLIGENT. In conclusion, a few key points to remember include:
Guy Kornblum offers an Injured Victims Handbook, which outlines the basic process of seeking damages for injuries if you are a victim of wrongdoing. There are 12 Chapters which are in layman’s terms and which will outline issues you will need to understand if you have been injured or there has been a death of a loved one and you are seeking compensation from the wrongdoer.
If you want a copy, email firstname.lastname@example.org, or call either of our offices at 415 440-7800 for San Francisco, or 707-544-9006. We can email you a copy or send you a hard copy. I think you will find it very informative. There is nothing else like it out there that I am aware of for injured victims.