/>iThe following is a recap of Wilson Elser’s May 2024 webinar “Insurance Coverage Litigation Strategies: How to Sue and Be Sued,” presented by the authors listed here. The program addresses effective and efficient litigation strategies including how, when and where to file; removal; offensive motions to dismiss; discovery for motion practice; and when trial might be a realistic possibility in coverage litigation.
Recent Litigation
One of the biggest areas of insurance coverage litigation over the past several years has been claims related to the COVID-19 pandemic of 2020. There have been a number of decisions regarding coverage for COVID-19-related claims, with many more cases still being litigated within the court system. In addition, as Jonathan Meer emphasized in the webinar, a different issue that drove some insurance coverage litigation in recent years is the attempt by states to enact tort reform. For example, the enactment of tort reform in March 2023 in Florida led to a dramatic increase of actions filed against insurers in the weeks leading up to the tort reform taking place.
Pre-Litigation
In the webinar, Katherine Tammaro addressed the importance of being thorough and prepared before you begin litigating. First, she suggested that every attorney should review the claim file and the underwriting file in their entirety when a new coverage litigation matter is received. Moving forward, she advised that all the issues be researched before responsive pleading, discovery, motion, practice, etc. Such research should include not only substantive issues but also procedural issues, such as the choice of law the issue is related to, as this will often help inform the next steps in coverage litigation.
Next, Tammaro advised how to address a case from a plaintiff’s perspective as opposed to that of a defendant. As a plaintiff, it is important to consider if your position is sound and if it is going to be worth the expense of filing a coverage action for an insurer. For an insurance company, while a decision to file might feel right in the moment, it could create more problems down the line particularly if the issue could potentially create bad law that may have a broader impact on the insurer’s coverage positions in other matters. In addition, prelitigation considerations also may include the differences between filing state or federal court, and highlights why one might strategically choose one venue over another. Meanwhile, in defending against coverage litigation, two principal questions to ask are “How do I respond?” and “Is the position sound?” The answers might indicate that alternative resolution is a better option than litigation.
Discovery
In the webinar, Jonathan Meer addressed the topic of discovery. Meer noted that the purpose of discovery is to allow for the transfer of information, which may be limited, in particular due to the attorney-client privilege. Meer recommended having many “meet and confer” conferences so the parties can try to get on the same page. Meer’s advice for the “meet and confer” conferences is to “talk it out – you may disagree, but maybe you can narrow the issue” so as to avoid motion practice and court intervention. A related issue is the growing importance of e-Discovery and electronic documents in coverage litigation. In the webinar, Meer provided the following statistics from Backlinko: there are 5.2 billion smartphones in the world, 16 million texts sent every minute, 100 billion WhatsApp messages sent every day. He asserted that these numbers are important because if an insurer is preserving ESI for coverage litigation, it must understand where all that data is stored.
Summary Judgment and Trial
In the webinar, Richard Boone discussed the summary judgment phase of a coverage litigation case. Boone made clear that summary judgment means every coverage defense is fair game. With this being said, courts have a lot of freedom in determining whether there is a genuine issue of material fact. As Boone explained, “The courts generally won't go so far as to discount a witness's credibility. At least they're not supposed to, but in certain subtle ways they might. The best way to sort of discredit your opponent’s witnesses at the summary judgment phase is to ask them questions that were asked at deposition, which can elicit contradictory testimony. If the plaintiffs or the insurance witnesses can't get their stories straight, it's more likely than not that you'll get the court to disregard them on summary judgment.”
Boone pointed out how trials are uncommon in coverage cases, particularly as compared to most types of lawsuits, because contracts are generally interpreted as a matter of law, which is the province of a trial judge’s determination rather than a jury. Boone noted that the cases that go to trial are the ones where there is a discrete issue of fact or where the bad faith component of the case has not been dismissed.
Key Takeaway
Throughout their presentation, the partners highlighted the most important factors of insurance coverage litigation. They aim to help navigate this complicated path, whether by addressing how recent issues (such as the pandemic) have impacted insurance coverage today, noting the differences between a plaintiff’s perspective and a defendant’s perspective in pursing coverage litigation, offering strategies for discovery, citing the Federal Rules regarding summary judgment, assessing what cases are most likely to go to trial, and much more. Their presentation serves as a guide to success in insurance coverage litigation.
Cyrus Toosi, a Wilson Elser summer staff assistant, facilitated the production of this article.
