Wednesday, May 28, 2008

On Difficult Lawyers - Part II

In a recent post, I reported how OKC Federal Judge Vickie Miles LaGrange struck a blow for the good guys in our profession by a very clever sanction against an attorney that she decided had behaved badly in a case before her court. Link HERE. However, it would appear that this gentleman's troubles before the bench were not over.

The following took place in a state court case this same attorney and insurance company were involved in:

¶5 On January 28, 2003, the passenger's counsel contacted the liability examiner and requested the $15,000 limits of the UIM policy. On January 28, 2003, the liability examiner settled the liability claim for the $10,000 policy limit. Throughout these negotiations, the passenger's counsel often mistakenly used the liability claim number when referring to the UIM claim and vice versa. When negotiations on the UIM claim were not fruitful, on March 26, 2003, Denise Thompson, the UIM examiner's supervisor (the supervisor), called the passenger's counsel and offered $2000 to settle the UIM claim. On April 3, 2003, the passenger's counsel counter-offered to settle the UIM claim for $14,000. On May 6, 2003, the supervisor offered $3,000 to settle the UIM claim, the full amount at which the insurer had valued the claim.

¶6 The passenger then deemed the $3000 an "undisputed amount" and demanded payment of the $3000 without settlement of the claim. The insurer refused, and on July 10, 2003, the passenger brought an action in district court alleging breach of contract and bad faith for the insurer's refusal to pay the "undisputed amount" and improper "dual representation" for the insurer's alleged leveraging of the liability and UIM claims against each other to prevent a fair valuation of either. The insurer moved for partial summary judgment on the issues of bad faith. The trial court granted the insurer's motions on both issues, leaving only the breach of contract claim to be litigated.

¶7 On September 9, 2005, the trial court ordered that the parties attend mediation pursuant to the District Court Mediation Act, 12 O.S. §§1821-1825, (the Mediation Act). On September 23, 2005, the parties attended mediation, but could not reach a settlement. On October 17, 2005, before the trial began before District Judge Tom A. Lucas, the passenger submitted motions in limine seeking to prohibit the insurer's counsel from: 1) mentioning collateral sources; 2) eliciting testimony from the investigating officer; and 3) suggesting or implying that the passenger's counsel fostered perjury from the passenger's treating physician. The parties argued the motions in chambers, and the trial court granted all three motions. During opening statements, Gerard F. Pignato, counsel for the insurer, stated that the investigating officer determined that there were no injuries sustained by the passenger. The passenger objected and the trial court sustained the objection and advised the jury to disregard counsel's statements about the investigating officer. Later in the opening statement, the insurer's counsel claimed that the passenger's expert medical witness "churned fees" and agreed to testify as "part of the deal." The trial court called counsel to the bench and advised the passenger's counsel that if he moved for a mistrial, it would be granted. The passenger's counsel so moved, and the trial court declared a mistrial.

¶8 On November 28, 2005, the passenger moved for sanctions against the insurer for its attorney's conduct in the first trial. The passenger also based his motion for sanctions on what he considered an unreasonably low settlement offer made by the insurer during mediation, the amount of which he disclosed in the first sentence of his motion for sanctions. On November 30, 2005, the insurer responded by moving for sanctions against the passenger and his counsel, Michael W. Phillips, for revealing the settlement amount offered in mediation, which the insurer alleged violated the Mediation Act.1 On December 21, 2005, District Judge William C. Hetherington, Jr. awarded $2500 in sanctions to the insurer against the passenger's counsel, and awarded attorney fees to the passenger against the insurer.

Taking inventory of the above we find several interesting tidbits .... a lowball offer to settle far below the actual value of the claim ... an attempt to "leverage" the claims against each other to reduce the value of both and ... and an obviously retaliatory motion for sanctions against the opposing attorneys who did not go along. Amazingly, the trial court, while granting attorneys fees against the insurer, at the same time levied a $2500.00 sanction against the insured's attorney. However, on appeal the Oklahoma Supreme Court did not agree:

Imposition of sanctions under these circumstances was premature and excessive. Because the trial court had no authority to sanction the passenger's counsel under §2011(C)(a) and an order of sanctions under the circumstances of the cause was an excessive extension of the trial court's inherent powers, the trial court abused its discretion by sanctioning the passenger's counsel.

The case is Garnett v. GEICO, 2008 OK 43. Link HERE.


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