Reinsurance Law Blog : Oklahoma Insurance Lawyer & Attorney : Stauffer & Nathan Law Firm

A New Jersey judge who allowed a lawyer to plug an evidentiary gap with a Wikipedia page has been reversed on the ground that the online encyclopedia that "anyone can edit" is not a reliable source of information.

http://www.law.com/jsp/legaltechnology/pubArticleLT.jsp?id=1202430073269

This may be a good opinion where there is a hotly contested fact. But then, I don't think that judicial notice is appropriate for any hotly contested fact.  A study compared Wikipedia with the Encyclopedia Britannica for accuracy, and considered  them to be equal.

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Every so often, a case comes down that requires comment, even if it is not specifically an insurance case.  Such a case is Creative Consumer Concepts Inc v. Kreisler.   We believe Ms. Kreisler deserves a chutzpah award for this case. 

Ms. Kreisler worked for CCC.  She was terminated.  She was given an unsigned severance agreement. She requested and was given some additional items (such as a letter of recommendation), but these items were not put into writing.  Then, she added a mutual release clause to the severance agreement, signed it and presented it to CCC’s human resource director (without advising her of the changes) who signed it on behalf of CCC. Later, it was discovered that Ms. Kreisler had embezzled over $860,000 from CCC, and had changed the severance agreement.  Payments under the severance agreement were stopped, and CCC sued Kreisler for recission of the severance agreement and for various claims relating to the embezzlement.  Kreisler counterclaimed for enforcement of the severance agreement, including the mutual release.

The first day of trial, CCC asked the court to let it raise the issue of the lack of authority of the human resources director to sign the modified agreement. The court reviewed this issue under a plain error standard because 1) there was no claim that the evidence fell outside the pleadings until after trial; 2) there was no contemporaneous objections to the evidence at trial; and 3) her contemporaneous objection was only as to the submission of a late brief and request for additional time which could not be construed as an objection to the evidence.  The court said that while CCC should have raised this issue earlier, it was not error to permit it to address the issue at trial.  The court found that “Ms. Kreisler had notice of the defense of lack of authority and, therefore, suffered no prejudice from CCC’s failure to comply with Rule 8(c). . .”

Her claim that she was entitled to a jury trial on the issue of authority to sign the agreement was without merit, since she had agreed to a bench trial.  The agreement was not ratified by performance, since once it was discovered that the agreement had been changed, performance was discontinued. 

Ms Kreisler also claimed error in admitting parts of her deposition at trial because she was available to testify.  But Fed.R.Civ.P. 32 allows the use of a deposition of a party “for any other purpose allowed by the Federal Rules of Evidence.”  The evidence rules permit the admission of a party’s deposition as a statement of a party. 

Finally, Ms. Kreisler claimed the civil action should have been stayed pending the outcome of the criminal charges against her.  But, because the only issue before the court in the civil action was the validity of the release provisions and the severance agreement, there was no abuse of discretion in proceeding with the civil case.

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Ms. Ellis had some work done on her house in 2002 when it was discovered a pipe had broken and there was a water leak.  It was fixed, but later, the concrete slab started to crack.  Ellis submitted a claim to State Farm, which denied it.  She then sued State Farm claiming that the slab was covered and that State Farm's denial was in bad faith.

Both parties moved for summary judgment and the trial court granted summary judgment to State Farm.  The 10th Circuit affirmed in Ellis v. State Farm, finding that the “continuous or repeated seepage or leakage” clause excludes coverage for the damage to the concrete slab.

Ms. Ellis contends that the district court erred in applying the “continuous or repeated seepage or leakage” clause for three reasons: (1) the evidence on summary judgment was disputed as to whether the sand fill under the foundation was washed away by water or whether “the sand sifted into the drain pipe and was washed out by effluent that stayed within the pipe,”; (2) the policy language refers to “water or steam,” not to sewage, so the clause is either ambiguous or simply does not apply to this situation where the sand fill was carried away by sewage; and (3) under the doctrine of “reasonable expectations,” Ms. Ellis is entitled to coverage because an insured would reasonably expect the clause to apply to “a water supply line or a steam line, both of which are under pressure, rather than a drain line,”

The court ruled:  1) reasonable expectations was raised for the first time on appeal and not considered; 2) didn't matter if it was a water or a sewage pipe, it contained liquid and a leak in the pipe caused the damage; and it also did not matter if the liquid contained sewage, it was still excluded; and 3) the evidence presented showed that the pipe leak washed supporting sand away from the foundation causing the cracking.  Summary judgment was affirmed.  

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FREE LEGAL ADVICE APRIL 30

The Oklahoma Bar Association is celebrating Law Day by giving free legal advice. Oklahomans across the state are encouraged to take advantage of this community service by calling (800) 456-8525 on Thursday, April 30 from 9 a.m. to 9 p.m. So, pass the word to family and friends!

Also that evening on Oklahoma’s PBS station OETA the Ask A Lawyer TV show at 7 p.m. will feature segments on frauds to watch out for and equal rights in the workplace. More details about the legal advice and the TV show are at

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In Gaither v. Allstate Insurance Company,  the Gaithers sued Allstate for bad faith for failing to pay them under their UM coverage.  Summary judgment to Allstate was affirmed on appeal. 

The Gaithers with their children stopped at a convenience store to get drinks.  There was an altercation inside the store and Mr. Ramirez ran out, grabbed Mrs. Gaither, and put a gun to her head.  One child was still in the car, but got away; and Mrs. Gaither was able to get away as well.  Mr. Ramirez then drove off and crashed the car.  Allstate paid for the car and also paid for medical expenses under its medical payments coverage.  But Allstate refused to pay UM to the Gaithers for their injuries.  The trial court granted summary judgment to Allstate on all claims:

First, the district court concluded that the injuries suffered by the Gaithers regarding the incident with Mr. Ramirez did not “arise out of the . . . use of an uninsured auto,” thus falling outside the scope of UM coverage.

The court further granted summary judgment in favor of Allstate on the Gaithers’ bad faith claim. The court then concluded that Plaintiffs failed to raise any genuine issue of material fact relating to the Medical Payments coverage. Although the Gaithers had submitted bills that allegedly remained unpaid, the court found that they failed to demonstrate how the bills related to treatment regarding the injuries incurred on September 18, 2005.

In order to be covered for UM, there must be injuries caused by an accident, arising out of the “ownership, maintenance or use of a motor vehicle.”  The court found there were accidental injuries, but that those injuries did not arise out of the ownership, maintenance or use of the car. In order for the injuries to be causally related to the use of the car, the use of an uninsured motor vehicle must be related to its transportation nature and the injuries must be “connected to that use.”  The court discussed the various cases dealing with the issue of when an injury is caused by the car.  Eventually, the Court found that the assault took place outside the car; the Gaithers were not injured by any part of the car; the car was not running when the assault occurred; and that therefore, the Gaither’s injuries were not connected to the transportation use of the vehicle.  The fact that the assaults occurred while Ramirez was trying to escape was not sufficient to raise a fact question. 
 

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Oklahoma law does not permit a tort action to state a claim for damages for a specific amount in excess of $10,000.  Rather, such claims can only request damages in excess of $10,000.  A default cannot be taken for more than the amount requested in the petition. 

In Vannoy v. Earth Biofuels, Inc., the defendant was served through the Secretary of State, but failed to answer.  Apparently, there had been some settlement negotiations.  Plaintiffs got a default judgment against defendant for $1 million.  The trial court refused to vacate the default judgment, and the defendant appealed. 

The Court of Civil Appeals vacated the default, stating that the defendant was required to have notice of the amount claimed before default was entered against it.  The trial court could not rely upon a district court rule says that no notice of default is required if no entry of appearance has been made, since the rule conflicted with the statute requiring notice of the amount claimed.

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Ellis fell through Spaniol’s deck and was injured.  She claimed that Spaniol’s insurer, Liberty Mutual, acted in bad faith when it failed to properly investigate and pay her claim.  The court held that Ellis, a stranger to the insurance contract, could not bring suit directly against Liberty, and had no claim for bad faith. 

The court states: “‘[T]he insurer’s duty to deal fairly and act in good faith is limited. It does not extend to every party entitled to payment from insurance proceeds. There must be either a contractual or statutory relationship between the insurer and the party asserting the bad faith claim before the duty arises.’ Roach v. Atlas Life Insurance Company, 1989 OK 27, ¶ 8, 769 P.2d 158, 161. The record does not reveal, and Ellis does not assert, a contractual or statutory relationship with Liberty Mutual. Her status was one of third-party claimant under the policy.”

Thus, Ellis’ status as a third party beneficiary is not sufficient to state a claim for bad faith against Spaniol’s insurer, Liberty.  

Ellis v. Liberty Mutual Insurance Co.

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Plaintiff was injured when he collided with a truck which became stuck on the highway when it tried to turn around.  The jury found the plaintiff was 25% at fault and awarded him $3.2M (reduced to $2.4M).  The Tenth Circuit reversed the jury verdict, however, because of improper closing argument by plaintiff's counsel.  Whittenburg v. Werner, Case No. 07-6063, 4/3/09

Plaintiff's counsel asked the jury to imagine that the defendant wrote plaintiff's family a letter telling the family that it was going to do various bad things which would result in plaintiff being badly injured; and that defendant would then improperly defend itself and spend lots of money on its defense so it would not have to pay any money to plaintiff; and in defending itself, it would cast all sorts of aspersions on plaintiff. 

The permissible limits of closing argument were exceeded in this case in two principal ways. First, counsel referred extensively to evidence not in the trial record. Second, without apparent provocation or basis in the record for doing so, counsel flooded his argument with abusive references to his opposing party and counsel.

                             * * * * 

Before us, the parties fight considerably over the propriety of ever using an imaginary letter as a way to structure a closing argument. But we need not resolve today an abstract debate over the proper form of closing arguments because in this case there is a more pressing problem. Even assuming the possible propriety of the technique generally, the content of this particular imagined letter included a great many facts about Mr. Whittenburg’s children and Werner’s conduct that lacked any basis in the evidence adduced at trial. Counsel’s argument accordingly violated the cardinal rule of closing argument: that counsel must confine comments to evidence in the record and to reasonable inferences from that evidence.

 

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