Give the ABA a pat on the back

It was a rude awakening when I graduated law school and was faced with the realization that schools were able to beat the system and were not being totally honest when they report extremely high percentages of students with jobs after graduation. I remember hearing that Michigan students were well over 90% successful at finding a job before or soon after graduation. From what I could see in my own class, that wasn’t the whole truth. The school started "employing" students to work for  few months at the clinics or at nearby firms who needed a temporary employee. I guess these jobs were at least better than being a nanny (not that I don’t love kids, but that’s not why I got a legal degree) or a chauffeur.

BUT! Don’t you fret, the ABA is (hopefully) coming to the rescue:

"The ABA will require schools to report the percentage of graduates who are employed and the types of jobs they have taken in much greater detail than they do at present. They must report whether graduates are in jobs that require a law degree; whether they are unemployed; whether their employment status is unknown; and whether they are in jobs funded by the law school or university. Critics have complained that some law schools give their graduates temporary academic jobs so they will count among the employed for purposes of U.S. News & World Report’s rankings."

Read the rest of this article here.

While it is nice that this will help future students have a more realistic view of their schools, I think the more important result from the ABA changes will be schools working harder to find real employment for their students. I feel fairly safe in saying students utilize these reports in deciding what law school to attend. Now, the schools will have to work harder and smarter to continue to draw top students into their ranks.

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Blogging, branding and the free-gap

Seth Godin has some insights on game theory, the marketplace of ideas and the demand for free. 

"Radio thirty years ago was simple: everyone hears it for free and a few buy it.

For a time, one could use free to promote an idea and have leverage to turn that attention into paid sales of a similar item (either because free went away or because the similar item offered convenience or souvenir value).

I think that might be changing. As the free-only cohort grows, people start to feel foolish when they pay for something when the free substitute is easily available and perhaps more convenient.

Think about that–buying things now makes some people feel foolish. Few felt foolish buying a Creedence album in the 1970s. They felt good about it, not stupid."

Can’t disagree with anything he says in his post. Especially since this gives me an excuse to give  an obligatory Creedence link as well as a link to the same song in The Big Lebowski, one of the 10 greatest movie comedies of all time. The Dude was, without doubt, one of the laziest men in Los Angeles County, which placed him high in the running for laziest worldwide. 

Godin gives the example of what all this means in the context of, say, Lady Gaga: the music is basically given away, but the concerts cost money.  Lawyer blogging is somewhat similar in theory, and somewhat different. Unlike Lady Gaga, whose product is mainly the same songs she performs in concert, lawyers are selling legal advice, but they don’t actually give away much of it on the internet.  Law is a knowledge-based business: even if you give away a free analysis of what some case means or what some development signifies, you are not really giving away your songs. The application of the knowledge is so fact-intensive and so variable under new circumstances that you are really not giving away all that much, truth be told, that you could put a price on in the first place. 

Instead, lawyer blogging is less about transfers of information from paid to free than it is about branding. I know, a lot of lawyers are completely uncomfortable with talk of branding, selling, marketing, and so forth — bring up the subject and they react like you just set a basket of snakes on the desk in front of them. I  myself see nothing wrong with the concept of selling, because I don’t have a concept of lawyerism as a mystical calling. It’s a hard job in a highly regulated field with a lot of responsibility, but still a commercial endeavor, and all in all, one I’d rather do than what I did in my younger years: hauling hay bales, driving tractors and cleaning cow manure out of barns with a pitchfork. As the economist John Kenneth Galbraith said, if you’ve ever worked on a farm, nothing else ever seems like work. Selling legal services is as much a part of being a lawyer as writing briefs and arguing to judges.  

The concept of branding is increasingly important to legal work these days, and this is something that has to be thought through, because the days of low hanging fuit in the legal business are done.  Blogging or some other promotional activity is an integral part of branding, because increasingly, as is clear from the Godin post, if you aren’t giving some information away it will be assumed you don’t have anything anyone wants, either for free or to pay for. You have to be part of the mix, a player. How you differentiate yourself,  and if you can, is something you have to give thought to. The first step is to ask yourself what you have to sell that someone would want. It’s a hard question, and uncomfortable for many. If the answer is you don’t have anything, you have to get something. You can’t sell something if you don’t have anything to sell that someone would buy. Asking yourself this question is pretty uncomfortable, because the answer may involve making changes, perhaps some big ones.    

I formed many of my ideas about legal marketing from Joe Gerber of Cozen O’Connor. When I read this speech he gave about the subject, it was a thunderbolt, a Road to Damascus moment, one of the most amazingly true things I’ve ever read.  Joe is one of my heroes, a guy with ideas as well as a guy who does stuff, he’s the Legal Ayatollah of Rock’n’Rolla. Over the years I have re-read this speech at least two dozen times and handed it out to lots and lots of people. Not sure how many have read it, but I’ve handed it out.     

I think I’ll conclude by noting something else Godin said in his post:

"Does the game theory of the market make it likely that those in search of discovery will accelerate the use of free to get attention? Of course."

This point is something to ponder. The implication of it for lawyers, as I’ve said, is that people have to know who you are and that you are selling something. But Joe Gerber says, "don’t just do it." If you’re going to do it, don’t do it because someone is telling you to or just to go through the motions, do it with passion and creativity and because you believe in what you are selling. For Joe, any and all marketing is good marketing — if it works. If it works, it can be quantified on the bottom line. If it can’t be measured on the bottom line, it’s not marketing. It might be something else, such as a social activity you enjoy, or perhaps just a complete waste of time that you are deluding yourself with to try to look like you are doing something, but it isn’t marketing.        

    

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The Missing Links

Will he write boxer briefs? Following the example of Bruno Campos (see page 11) and others who left the spotlight to attend law school, Juan Diaz, former unified lightweight titlist, is starting at the University of Massachusetts Dartmouth Law School. 

More on boxers. Well, Sen. Boxer, and to be honest, the story isn’t really about her. But, it made for a good segue. I remember starting law school and being told that the legal world would beg to employ us when we were ready to enter the job market.  Turns out, not so true. That being said, it will be interesting to see if the ABA meeting on June 11 brings about changes that will "improve the independent oversight, accuracy, credibility, and transparency of the data law schools have to make available to the public."

Higher education bubble: Are students finally figuring it out? University of Kansas Law School reported a 23 percent drop in applications and quoted a nationwide drop of 12-13 percent. Looks like students are getting smarter – but what about KU? Why are they spending money on recruiting instead of putting their money where it is needed…helping graduates find jobs!  

And an insurance note for new grads. YOU DO NEED RENTERS INSURANCE!

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Contact David Rossmiller, managing editor

dprDavid Rossmiller, managing editor of the Insurance Coverage Law Blog, is a partner at BPM who specializes in complex commercial litigation, particularly insurance recovery and insurance coverage litigation. David’s insurance practice includes a broad range of issues: environmental property damage, errors and omissions and professional liability coverage, directors and officers liability, sex abuse coverage, construction defect, business interruption insurance, general commercial liability, first-party commercial property disputes, homeowners and auto, managed care, employer liability and others.

Besides insurance recovery and coverage, David’s commercial litigation practice has included a variety of complex cases including environmental liability and intellectual property. Before becoming a lawyer, David was an award-winning investigative, crime and political newspaper reporter, including eight years with the Phoenix Gazette, the now-defunct afternoon daily in Phoenix, Arizona. He is admitted to the bar in Oregon, Idaho and Washington and has applications pending in Montana and North Dakota. He blogs Monday through Friday, major holidays excluded, on insurance coverage cases, industry developments and other topics of interest.

You can contact David at drossmiller@bpmlaw.com or 503-961-6338.
Betts Patterson Mines
111 SW 5th Avenue, Suite 3650
Portland, OR 97204
503-961-6338

Website: www.bpmlaw.com

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As promised

David mentioned in his post on May 19, 2011 that he is going to have some help blogging and that he’s going to be broadening the format of the blog somewhat beyond insurance analysis including a de-Scruggsification of the blog. I’m Elissa Meyrowitz Boyd, a newly minted lawyer and a December graduate of the University of Michigan Law School. I can tell you that David’s first statement was true, I will be helping to keep you fully blogged; however, I cannot guarantee a de-Scruggsification of the blog….I haven’t known David to give up on anything yet. I will be blogging about being a recent law school graduate, the challenges of being a new lawyer and other topics that I think may be of interest. Please be patient with me as I learn, or at least don’t laugh at me too hard (unless I’m trying to be funny and then it’s OK).  My bio is here, where you can read my fancy new blog title.

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Contact Elissa Meyrowitz Boyd, associate editor

embElissa Meyrowitz Boyd, associate editor of the Insurance Coverage Law Blog, is the newest member of the Insurance Coverage team at BPM. Elissa, a Michigan native who graduated from the University of Michigan Law School in December 2010 (Go Blue!), also did her undergraduate studies at the University of Michigan. She is currently working closely with David Rossmiller on cases involving complex commercial litigation, particularly insurance recovery and insurance coverage litigation.

Before becoming a lawyer, Elissa interned at the Legal Aid and YWCA in Omaha, Nebraska where she focused on helping survivors of domestic violence. She also interned at Miller Johnson P.L.C. in Grand Rapids, Michigan. She blogs Monday through Friday, major holidays excluded, on life as a new lawyer, insurance coverage cases, industry developments and other topics of interest.

 

You can contact Elissa at eboyd@bpmlaw.com or 503-417-5468.
Betts Patterson Mines
111 SW 5th Avenue, Suite 3650
Portland, OR 97204
503-961-6338

Website: www.bpmlaw.com

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Hit and Run Links

Florida: new hurricane damage model suggests damage inland will be much worse than previously predicted.

Beat It: Insurer says policy on Michael Jackson tour is void because of misrepresentations about Jackson’s history of drug use.

Drought: A lot of places have flooding. In Southwestern Kansas the problem is drought. Crop insurance will only cover part of the losses. I wrote about crop insurance and its heavily subsidized nature, here, almost five years ago.

Snake Bit: Some homeowners insurers won’t insure you if you have certain snakes. Good. I hate snakes and I think owning snakes is weird. We have enough problems to worry us without having to deal with insuring weird snake people. I saw a guy walking around Home Depot one time with a big ol’ snake draped on him like a shawl. They told him to leave. Guess they didn’t have snake insurance either. 

Health Insurance: Parents don’t want offspring in their 20s on their policies. 

Bizarre, job-destroying rules:  Back in the New York groove. New York City issued rules earlier this year requiring general liability insurance sold to contractors in the city cover the following:

  • The contractor’s completed work
  • Explosions, collapses and work performed underground
  • The contractor’s agreement to pay for liability claims against another party
  • Claims against another party for an injury to the contractor’s employee
  • Work on residential properties
  • The use of a controversial finishing system [EIFS] for buildings’ exteriors

Exclusions are in policies because insurers have found the cost of underwriting the risk isn’t worth it. Some things are business risks where the moral hazard of insuring contractors for them provides an incentive to do shoddy work and subsidizes firms that do bad work. Other things, like EIFS, or Exterior Insulating Finishing System, have proven to be lawsuit magnets.  Multi-unit residential exclusions have been standard for seven years, and Employer’s Liability exclusions go way, way back. You can try to mandate insurers to cover certain things, but they won’t willingly lose money on selling insurance, so either they jack premiums sky-high or withdraw from the market. Good contractors who can’t afford high insurance go out of business. Big companies and fat cats like rules like this, because it drives out small fry and middle fry competitors and provides a barrier to entrance to the market for new competitors. Crony capitalism at its finest. Rules go into effect in a few days.  

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Because It’s Wednesday

You don’t need any better reason than that to watch gloating and boorish Nazis get their comeuppance and being drowned out by the greatest song in the history of Earth, La Marseillaise. C’mon, hit the link, you know you want to, you know you deserve to. Five words: Ingrid Bergman and Humphrey Bogart.

 

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Insureds, Intent, Indemnity and the Briar Patch

 

I grew up about 20 miles from the Canadian border and know quite a lot about Canada, but shamefully, not that much about Canadian insurance law. 

So this story in a Canadian legal publication caught my eye — it’s about a series of Canadian court decisions that say that if one family member or another insured burns down the house or otherwise intentionally destroys the insured property, the policy’s exclusion for intentional acts keeps even an innocent co-insured from recovery.

As the story indicates, this is a vexing issue to try to balance. As with many things about insurance coverage, trying to resolve questions often requires one to think pretty deeply about human nature and human conduct. There is an argument that if an innocent insured can collect for the intentional acts of another, there is an incentive for fraud or collusion. With acts like actually torching a house, this moral hazard is somewhat lessened, I think, because arson is a serious crime and volunteering to take up residence at the graybar hotel so your co-insured can collect insurance proceeds is, 999 times out of 1,000, going to act as a pretty powerful disincentive. Most of the time, the criminal will seek to benefit himself and any benefit to a co-insured will be incidental or unplanned. Besides, collusion is not really what the issue is here. This question posits a co-insured who is not colluding or engaging in fraud, but instead is the victim of aggression or criminal plotting by a crooked or nutty current or former spouse or some such sleaze; or possibly the victim of bizarre or crazed conduct by a drug-addicted, emotionally whack or otherwise out-of-control family member, such as a teenager. Maybe the co-insured just doesn’t know what some dirtbag family member is up to. Hey, don’t scoff, if you’ve ever known dirtbags, you do your best to tune them out. 

In the United States, how innocent co-insureds are treated varies. In my totally unscientific, quick and dirty survey of four jurisdictions and some texts and periodicals, I found most courts looked to give a recovery to the the co-insured, particularly because it was often the intention of the destroyer to deprive the victim of both property and security, if not life itself.  Remember, no one is saying the slimeball arsonist should get anything except an extended working vacation at the rock pile. The question is whether the innocent co-insured should get zero, half (or other proportionate share) or all the recovery.   

In Yerardi v. Pacific Indemnity, 436 F.Supp.2d 223 (2006), a federal district court in Massachusetts said there could be no recovery for the wife where there was an accusation she colluded with her husband to commit arson, because the policy unequivocally said no co-insured could recover for the intentional acts of another. Same result, the court said, for intentional misrepresentation by a co-insured — bango, you’re both done. Might the court have had a different take if there was a clearly innocent co-insured? It looks to me like the answer is yes. The court cited an older Massachusetts case that was a hit before your mother was born, a real golden oldie, straight from the nostalgia file, back in 1938, that said insureds were joint and nonseparable. The court said this had not been revisited, unlike in other jurisdictions. Which suggests to me the court might have given some thought to the feasibility of a different result in the facts presented a more compelling justification. 

Other courts have found, as in Republic Ins. Co. v. Jernigan, 753 P.2d 229 (Colo. 1988), that the "separation of insureds" or "severablility of insurance" clause means that the policy applies separately to each insured as if that insured was the only insured. In Jernigan, the innocent co-insured wife was entitled to half the proceeds of the policy where the husband intentionally torched the house but she didn’t know of the plan. However, there is something a little odd here. It’s like when you look at a movie where they are supposed to be playing chess and the board is cockeyed, with a white square at the far bottom left of the player instead of the far bottom right. Your chess board is wanked, your game is going to be wanked too.

Here, the "severability" clause relied upon by the court actually is in the Conditions of the liability section of the policy, not in the first part of the policy, which deals with property insurance. In the Conditions following the property section, sometimes there is a statement that if "you" or "any insured person" intentionally harms the property "for the purpose of obtaining insurance benefits," then the policy is void. Now, this leaves a lot of room for coverage for destruction caused by a vindictive spouse or messed up kid, because they are burning the place down to deprive someone of property or maybe even trying to kill them. But it would apply where, as in the case here, it appears the husband wanted to collect on the insurance.

Other times, such as in the standard HO3 homeowners policy, it won’t say anything like that in the property coverage Conditions, but it will say no insured can be paid more than his or his interest in the property, and one of the exclusions will preclude coverage if committed by "an insured" with the intent to cause "a loss." It will also say, in a section of Conditions that apply to both property and liability coverages, that any material misrepresentation by an insured, before or after a loss, voids the entire policy. It seemed odd that the Colorado court would rely on on the Conditions for third-party liability coverage when the issue was first-party property coverage — for example, I wouldn’t try to apply the anti-concurrent cause language from the first-party property section of the policy to the liability section, it just wouldn’t make sense, and that is why the policy has different sections, because not all stuff applies to everything. In coverage, there usually is no one clear right answer, but there is rather a range of answers that range in credibility from high to Anthony Weiner.   

Another court noticed this, the cockeyed chess board. In Montgomery Mutual Ins. Co., 170 F.Supp.2d 618 (W.D. VA 2001), the court said the Conditions in the liability section, such as the severability clause, could not be applied to a first-party property loss. However, the standard HO3 intentional acts exclusion had been replaced by a Virginia-required endorsement: instead of saying no loss was insured if inflicted intentionally by an insured, the exclusion said there was "no coverage for an insured who commits or directs an act with the intent to cause a loss." The court therefore allowed a mother to recover after her son set fire to the house, after firing a gun at the home and before driving a pickup into the flames. The son couldn’t have recovered, but the mother could.

Voquardson v. Hartford Ins. Co. of the Midwest, 264 Neb. 337 (2002), gives a pretty good discussion of how courts tend to break these things down: if the policy unambiguously says that loss caused intentionally by "an insured" or "any insured" is excluded, it precludes coverage for everyone. But courts look for just about any way they can find around this. Sometimes, the policy conflicts with a statute or there is a colorable argument that it conflicts, and the court will pounce all over that and find for an innocent co-insured. 

Not scientific at all, really. As with most coverage questions, there is a high degree of art involved. But then again, why else do coverage law if not for the art? I always tell newer people who are just learning the field, we are not computers, we are artists. One of my names for insurance coverage is the Briar Patch, not only because it is full of thorns that will hang you up, and not just because it is easy to get lost if you don’t keep a detailed record of your analytical trail, but because there is always another level, another thicket, beyond where your analysis is. The goal is to go so deep in the Briar Patch, to understand the policy so thoroughly, to understand the philosophy so completely, that arguments will be many layers beyond those of an opponent and will ring with credibility and logic, rather than mere partisanship. Easy to say, hard to do.

 (Image above found at http://www.flickr.com/photos/38521378@N00/4465002520/).

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Today’s Hit and Run Links

Scurvy Dogs: Piracy along west coast of India leads Lloyd’s to hike insurance premiums 300-fold; India appeals. India has stepped up naval patrols. Serious question: where are the pirate-killing drone aircraft?

What if they threw a pre-existing condition insurance plan and nobody came?  More here, from Megan McArdle of The Atlantic. 

Terrorism exclusion: Pakistani journalists demand life insurance from bosses after 21 killed covering War on Terror. Sounds like the least they could do for them.

Nebraska flooding: It may already be too late to get flood insurance. A 30-day post-purchase exclusion applies. Also, flood insurance doesn’t cover finished basements or stuff in them, which kind of figures, but it’s a bummer.

The Trashing of the Kiwi: New Zealand teen tenants run amok, destroy house, party with 200 of their closest friends leaving drug paraphernalia, cigarette butts and dog feces strewn about. I feel sorry for the owners, who are in their 80s. They tried to get the tenants out but the process takes a long time. "We are devastated. We won’t get insurance because we didn’t know we needed to have separate insurance for damage by tenants."

Floridians push hurricane-related tax breaks: I admit it, I miss Gov. Charlie Crist. It was always such fun to tear into him when I was writing about the last Florida insurance crisis.

Coverage for the Dreaded Lurgies: I’ve never heard it described this way — a story from South Africa.

Worst timing for insurance fraud evah: Takeaway — it’s not a good time to talk on the telephone about insurance fraud while the feds just happen to be wiretapping your buddy for investigation of other alleged crimes. 

 

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