Consumer Attorneys Association of Los Angeles ADVOCATE March 2012 Michael J. Bidart As with any case, obtaining an award of punitive damages will depend largely on the individual facts. If the ingredients of the case ultimately allow you to argue punitive damages before a jury, then there are certain things to keep in mind in terms of winning and keeping the award. This article addresses proving, winning and keeping punitive damages awards.

Introduction
In Bardis v. Oates (2004) 119 Cal.App.4th 1, 26, the court discussed the purpose of punitive damages — punishment and deterrence — and explained: “In order to serve these aims, a punitive damages award must send a message to the offender and others in similar positions that this sort of behavior will not be tolerated.” It is your job as the trial lawyer to motivate the jury to “send a message.” The starting point is to make sure you explain the purpose of punitive damages.

Proving Punitive Damages

A. Getting the Jury to Understand You Represent The Public For Purposes of Punitive Damages
In order to prove punitive damages, it is important that the jury understand that the purpose of punitive damages is to protect the public, which includes the members of the jury. One way to accomplish this task is to refer the jury back to the law. For example, in California, one powerful jury instruction is the following:
“The purpose of punitive damages is purely a public one. The public’s goal is to punish wrongdoing, and thereby protect itself from future misconduct, either by the same defendant or other potential wrongdoers. In determining the amount of punitive damages to be awarded, you are not to give any consideration as to how the punitive damages will be distributed.” Adams v. Murakami (1991) 54 Cal.3d 105, 110; Neal v. Farmers Ins. Group (1978) 21 Cal.3d 910, 928, fn 13 (emphasis added). Read the rest of this entry »

Shernoff Bidart Echeverria Bentley attorneys are actively litigating against the insurance company Farmers Insurance Exchange. The lawsuit, which alleges breach of contract and bad faith conduct on the part of the insurer, was brought on behalf of a policyholder whose auto theft claim was denied the full benefit as covered by the automobile policy. The lawsuit charges Farmers Insurance with misleading the plaintiffs as to the amount of coverage procured, in addition to deploying an improper method of determining a vehicle’s ‘actual cash value’ that runs against well-settled California law. Read the rest of this entry »

Source: The Daily Journal, February 15, 2011

Top Plaintiffs’ Verdicts by Impact–Thomas Nickerson v. Stonebridge Life Insurance Company

The question of who should have the final say in approving medical care – the physician or the insurance company – was key in a case involving a former U.S. marine and paraplegic.

Thomas Nickerson broke his leg in two places and was admitted to the Veterans Administration Hospital in Long Beach, remaining there for 109 days on doctor’s orders.

After his release, he submitted a claim to his insurance company, Stonebridge Life Insurance, seeking coverage for his hospital stay under his accident indemnity policy, which paid $350 a day for every day confined to a hospital.

But Stonebridge paid for only 19 days, claiming that the remaining days weren’t medically necessary. Nickerson filed suit. Nickerson v. Stonebridge Life Insurance Co., BC 405280, (Los Angeles Super. Ct., filed June 13, 2011).

“We felt that the jury would be quite upset with the widespread practice of an insurance company that wouldn’t pay for a medically necessary treatment,” said Nickerson’s lead attorney William Shernoff. “This whole area of insurance companies overruling treating doctors on what is medically necessary is a very huge issue in the medical community. I wanted this to be an important test case on that issue.”

Shernoff did prevail, with a jury awarding his client $31,000 in insurance policy benefits, $35,500 in emotional distress damages, and a whopping $19 million in punitive damages.

“This was a case where we wanted to be able to get punitive damages so we could stop the bad claim practices of the insurance company,” Shernoff said. “Obtaining punitive damages is always a challenge.”

As it happened, keeping them provided to be an even bigger challenge when the judge whittled that grand sum down to $350,000.

At issue was the standard establishing a ratio of punitive to compensatory damages of 10 to one for isolated incidents of wrongful conduct. Shernoff has appealed the reduction.

While the trial judge may have believed her hands were tied in this regard, Shernoff said, “We believe an appeals court will agree with us. It should be a different ratio when you have widespread institutional misconduct, coupled with low compensatory damages.”

- PAT BRODERICK

Review the Top Verdicts 2011 here: The Daily Journal

Consumer Attorneys of California FORUM February  2012

Howard S. Shernoff

I recently had the opportunity to check off one of the higher ranking items on the proverbial bucket list: sit second chair for my father at trial. The experience lived up to all expectations – and not only because my father is a legendary trial lawyer and we achieved a multi-million dollar verdict for our client on a $31,000 insurance bad faith claim.

The experience brought fulfillment and insight on many levels. In addition to enjoying the father-son camaraderie, I learned the importance of supporting a fellow lawyer. And by supporting I don’t mean sitting in the front row and pulling hopefully for the home team. I refer to the constant and fluid process of staying one step ahead of everyone else in the courtroom, including the judge, opposing counsel and the first chair himself. That is the charge of a mindful second chair.

A second chair can play multiple roles: law-and-motion specialist, jury consultant, instant legal resource, trial technician, confidant and student. I feel I did a decent job of assuming these duties and thereby helping my father and our client. Below are my reflections on what comprises these roles and makes them important.

Law and motion specialist

As bad faith plaintiff lawyers, we typically litigate against large corporate defendants using preeminent defense firms. So we are accustomed to fielding a lot of law and motion. But in the run-up to trial, the luxury of noticed motion briefing schedules and breezily-granted time extensions fades fast. Trial counsel are left to deflect a daily salvo of potentially dispositive motions, filed and served on the fly as if the sheer prestige of trial suspends the rules of civil procedure.

In our trial…

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Shernoff Bidart Echeverria Bentley attorneys William Shernoff and Howard Shernoff are actively litigating against the life insurance company Ohio National Life Assurance Company.

The lawsuit, which alleges fraudulent misrepresentation and bad faith conduct on the part of the insurer, was brought on behalf of a policyholder who had arranged to sell his policy legally on the life settlement market. Ohio National sought to thwart the life settlement by preventing assignment of the policy and concealing its anti-assignment provision.

The secondary market for life settlements allows a policyholder to sell a life insurance policy as a transferable property under certain circumstances. A viatical settlement involves a terminally ill policyholder seeking to convert their policy to cash.

At issue in this case is a hidden provision in certain Ohio National policies which would prevent valid life settlements or viatical settlements from going forward. The provision appears to violate California law. According to Howard Shernoff, the California Department of Insurance will likely weigh in on the issue.

Life settlement transactions typically involve independent brokers who serve as intermediaries between investors and policyholders. When the brokers do not comply with California life settlement laws, they too may be liable for their conduct. In this case, the broker is also a defendant.

If you have had a similar experience with life settlement issues or would like further information about the case, contact us.