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Posts Tagged ‘#Trial’

Is Georgia Game for Growing Bad Faith Liability?

Posted on: July 17th, 2018

By: Jessica Samford

As discussed in my last blog on bad faith, seeking bifurcation can be a proactive means to distinguish the issue of coverage from the issue of bad faith and appropriately manage the all too often unwieldy discovery process before it’s too late.  A recent case in Georgia is an interesting illustration of an insurer’s attempt to bifurcate issues after the discovery stage in a bad faith failure to settle claim in particular and is yet another cautionary example for insurers to carefully consider the increasing potential for extracontractual liability in Georgia.  Whiteside v. GEICO Indem. Co., 2018 U.S. Dist. LEXIS 87868, *3-*4 (M.D. Ga. May 25, 2018).

In that case, the trial court declined to bifurcate the issues of liability and proximate cause of damages at the trial stage as requested by Geico, which sought to have a jury determine whether or not Geico could be held liable for bad faith failure to settle before being presented with evidence of the default judgment entered against Geico’s insured of almost $3 million and causation of same.  Separation of liability and damages issues was not warranted according to the trial court because facts relating to Geico’s claim handling were relevant to both, and Geico’s concerns could be handled through proper jury instructions, special interrogatories, and the verdict form.  See also Whiteside v. GEICO Indem. Co., 2018 U.S. Dist. LEXIS 52761 (M.D. Ga. Mar. 29, 2018).  The trial court did, however, bifurcate the claim for punitive damages from the rest of the jury trial.

The result was a jury verdict of $2 million against Geico for failing to settle in response to a bicyclist’s demand for the $30,000 policy limit based on medical bills of almost $10,000 following a motor vehicle accident.  Previously, Geico had argued there was no coverage due to the insured’s failure to notify Geico of the subsequent lawsuit she was served.  Whiteside v. GEICO Indem. Co., 2017 U.S. Dist. LEXIS 203617, *6, 2017 WL 6347174 (M.D. Ga. Dec. 12, 2017).  Notwithstanding such a flagrant breach of the policy’s notice conditions, the trial court did not see coverage as being an issue since that coverage defense did not exist at the time Geico responded to the demand by offering to settle for about half the limits instead.

These unusual circumstances are certainly noteworthy, and extracontractual damages such as these are becoming less uncommon in Georgia bad faith cases.  FMG’s Insurance Coverage and Bad Faith BlogLine has already geared up to cover the Georgia Supreme Court’s upcoming rulings after granting cert on the scope of what triggers failure to settle liability in Georgia, not to mention the proposed changes to the Restatement of the Law of Liability Insurance and their impact.  Whatever is in the cards for extracontractual liability in Georgia, the risks presented by settlement demands should be evaluated in light of these current trends.

If you have any questions or would like more information, please contact Jessica Samford at [email protected].

Insuring Against Rule 68 Offers of Settlement

Posted on: June 28th, 2018

By: Matt Grattan

One tool defense lawyers in Georgia frequently use to induce settlements is an offer of settlement under O.C.G.A. 9-11-68.   Rule 68 allows either party to a tort action to serve a written offer to settle the claim, so long as the offer is made within a certain time and satisfies several other elements under the statute.  If a Rule 68 offer is properly made by a defendant and rejected, that code section allows a defendant to recover its post-rejection attorney’s fees and expenses from a plaintiff in the event the plaintiff does not recover at least 75% of the offered amount at trial.

It is easy to see how the fee-shifting provision in Rule 68 can provide defense attorneys with leverage during settlement negotiations.  Simply put, it forces plaintiffs to put some skin in the game.  Because paying the defendant’s attorney’s fees and costs can significantly reduce or even eliminate a plaintiffs’ award at trial (and in turn a plaintiffs’ attorneys’ fees), plaintiffs may be more inclined to settle rather than face such risks at trial.

The fee-shifting benefit from Rule 68, however, could potentially be diminished by companies like LegalFeeGuard.   Established in Florida in 2012 to combat that state’s offer of settlement statute, LegalFeeGuard has recently started offering insurance policies in Georgia that cover attorney’s fees and costs under O.C.G.A. 9-11-68.  LegalFeeGuard offers no-deductible policies with limits as low as $10,000 and as high as $250,000.   Policies are triggered by a judgment in a bench trial or the return of a verdict in a jury trial, and are available to plaintiffs and defendants for a wide array of cases, including personal injury, breach of contract, and intentional torts.

What does the availability of fee-shifting insurance mean for defense lawyers and their clients?  LegalFeeGuard recently launched in Georgia (and the author is unaware of any other similar companies), so it is tough at this point to determine what kind of impact fee-shifting insurance will have on litigation in Georgia.  But this is certainly a development for lawyers to keep an eye on (particularly since LegalFeeGuard claims on its website to have sold over 1,000 policies in Florida) as such insurance may persuade more plaintiffs to roll the dice and take their case to trial knowing the downside risk of paying fees and costs is reduced, if not altogether eliminated.

If you have any questions or would like more information, please contact Matt Grattan at [email protected].

The Hearsay Exception for Market Reports

Posted on: July 15th, 2016

By:  Ryan Babcock

The hearsay exception for “compiled information” or market reports is an important tool that allows for the admission of such evidence notwithstanding the hearsay rule, but it is generally strictly applied by the courts. For that reason, counsel must carefully consider whether the rule permits the admission of such evidence in developing a trial strategy with respect to the admissibility of certain exhibits.

The hearsay exception for market reports and other compilations is defined as follows by Rule 803(17) of the Federal Rules of Evidence:

Market Reports and Similar Commercial Publications. Market quotations, lists, directories, or other compilations that are generally relied on by the public or by persons in particular occupations.

Most courts find these compilations reliable, and admissible, provided that they are used by the public or a particular profession or occupation (and thus reliability is supported by market forces). In weighing the admissibility of such evidence, courts usually also consider whether the evidence is “necessary,” such as whether it is the only way to determine the truth of the matter at issue, and whether locating the person who made the report would be impossible. Recent state cases in the criminal context drive home this point: People v. Hard, 342 P.3d 572, 575–79 (Colo. App. 2014) (no necessity to rely on drugs.com for evidence that the defendant possessed a particular unprescribed pharmaceutical drug because the state could, but did not, have the drug tested); Hardy v. Florida, 140 So. 3d 1016, 1019–21 (Fla. Dist. Ct. App. 2014) (finding that evidence from the E-FORCSE database should not have been admitted because it was not published—as required by Florida’s evidence rules—and noting that there was no evidence that the information in the database was “reliable,” rather than simply being an investigative

tool); People v. Franzen, 210 Cal. App. 4th 1193, 1209 n.6, 1213–14 (Cal. Ct. App. 2012) (no necessity for database evidence because the state could have subpoenaed the telephone company, and the Entersect website was not shown to be accurate).

Certain statements in a publication or “compilations” would clearly not qualify under the rule. See Danner v. Int’l Freight Sys., 855 F. Supp. 2d 433, 472 & n.53 (D. Md. 2012) (noting that a quote from a popular magazine, without citation, regarding the “increased trophy fee” for a lion obtained in an overseas safari is inadmissible). A federal district court in Texas has rejected efforts to use a LinkedIn profile to determine a person’s location, finding the requisites of reliability and necessity clearly unsatisfied. Personal Audio, LLC v. CBS Corp., No. 2:13-CV-270-JRG-RSP, 2014 U.S. Dist. LEXIS 37089, at *15–16 (E.D. Tex. Mar. 20 2014) (Payne, Mag. J.). And the Fourth Circuit has recently explained that statements in a material safety data sheet would not be sufficiently reliable to be admitted under this exception, inasmuch as the statements were opinion statements, or warnings, made in an effort to limit liability, not factual compilations as such. In re C.R. Bard, Inc., Pelvic Repair Sys. Prods. Liab. Litig., MDL No. 2187, 810 F.3d 913, 923–24 (2016) (such evidence was admissible as non-hearsay to show notice).

In another case, a plaintiff’s attempt to admit certain industry publications and stock analyst reports, in wholesale form, as exhibits was rejected by a federal district court, which explained that courts take a narrow view of the exception, applying it to true compilations, not documents containing narrative and potentially subjective opinion. The court did note that properly redacted exhibits might be admitted at a later date. Bianco v. Globus Med., Inc., No. 2:12-CV-00147-WCB, 2014 U.S. Dist. LEXIS 3430, at *2–7 (E.D. Tex. Jan. 12, 2014).

Counsel should also bear in mind authentication, when there is any question concerning the authenticity of the evidence. In such circumstances, counsel must be prepared to lay a foundation, through live witness testimony or otherwise, that the compilation or market report is properly authenticated. See, e.g., Skyline Potato Co. v. Hi-Land Potato Co., No. CIV 10-0698 JB/RHS, 2013 U.S. Dist. LEXIS 10670, at *21–22 (D.N.M. Jan. 18, 2013) (authentication required as to a document purporting to show the great decline of the price of potatoes). And while the evidence from the compilation may properly get into evidence, that evidence alone may not suffice to overcome summary judgment, especially where the figures given are in the form of a range and the proponent of the compilation offers no additional evidence regarding the fact at issue. See Colvin v. Ameri-National Corp., No. 1 CA-CV 10-0528, 2011 Ariz. App. Unpub. LEXIS 1240, at *9–11 (Ariz. Ct. App. Oct. 4, 2011) (finding Kelley Blue Book admissible but insufficient to establish the valuation of the plaintiff’s Honda, as there was no particular evidence regarding the vehicle’s condition). Alternatively, counsel should consider whether the court might take judicial notice of the compilation at issue. Hines v. Shineski, No. 10-3973, 2012 U.S. App. Vet. Claims LEXIS 1385, at *9 (Vet. Claims App. July 5, 2012) (taking judicial notice of a city directory for 1967–68).

“Originally published in the Spring 2016 Newsletter of the American Bar Association’s Trial Evidence Committee.”