The National Association of Public Insurance Adjusters (NAPIA) is holding its Mid-Year Meeting close to our office in Scottsdale, Arizona today and Saturday. Preparing for my speech tomorrow, I ran across a fairly recent Arizona court opinion highlighting the quandary insurance company lawyers place themselves and their clients when participating in the adjustment of a loss and refusing to testify.

The appellate court upheld a $500,000 punitive damage award in Glendale & 27th Investments, LLC v. Delos Insurance Company.1 The briefings cited the trial court’s Order which prevented a deposition of the insurance company’s counsel, but with a warning about what that attorney could do at trial:

Mr. McCarthy did not withdraw and the procedures established by the district court…went into effect. They were:

I. Mr. McCarthy shall not be allowed to mention his participation in any of the events at issue to the jury.

II. Mr. McCarthy shall not provide the jury with facts that have not otherwise been presented through testimony or evidence…This includes any bolstering of previously admitted testimony or evidence because of Mr. McCarthy’s familiarity with the facts of the case.

III. The jury will be instructed to consider any statements made by Mr. McCarthy to be argument and that no evidentiary weight should be given to his argument because of his alleged role/familiarity in the controversy.

IV. Plaintiff will not be given leave to depose Mr. McCarthy, as Mr. McCarthy is an attorney for Defendant Delos Insurance Company. As an attorney for a party, he is precluded from testifying.

Limiting attorney argument and especially closing statement can be very costly to a party. The issue of insurance company attorneys participating as quasi adjusters and investigating the loss is frequent. It seems to be a "no-win" situation for the insurer because while the attorney may prevent his testimony in deposition or trial, these types of Orders prevent those same attorneys from benefiting from such exclusion.

Positive Thought of The Day

"Discourage litigation. Persuade your neighbors to compromise whenever you can. As a peacemaker the lawyer has superior opportunity of being a good man. There will still be business enough."
        —Abraham Lincoln

1 Glendale & 27th Investments v. Delos Ins. Co., 610 Fed.Appx. 661 (9th Cir. [Ariz.] 2015).