Defense Counsel Journal - International Association of Defense ...

More documents

Recommendations

Info

Page 424 DEFENSE COUNSEL JOURNAL–October 2012subsequently rejected Amerex's claim onthree bases: (1) Amerex's failure tosubstantiate a number of aspects of itsclaims, due to the lack of documentaryevidence; (2) alternative explanations forthe loss of business income that Amerexreported, including the September 11,2001 terrorist attacks, economicrecession, and the bankruptcies of majorcustomers; and (3) Amerex's improperdetermination of the proper “restorationperiod,” the date after which businesslosses could no longer be attributed to therack collapse or computer failure.After Amerex filed its complaint, theexcess insurers demanded appraisal andanswered the complaint the next day,listing the appraisal demand among theiraffirmative defenses. The excess insurersthen moved to compel an appraisal.Amerex rejected the demand andcontested the motion, claiming that thedemand was untimely and was assertedonly to preclude Amerex fromprosecuting its claim and obtainingdiscovery. The trial court granted themotion to compel an appraisal resulting ina three person panel.In conducting the appraisal, the panelreviewed documentary and testimonialevidence and conducted investigations ofwitnesses. After almost two and a halfyears of review, the panel issued itsvaluation decision and found thatAmerex's damages amounted toapproximately $1.3 million, just morethan half of the value of Amerex'sinsurance policy with Fireman's Fund.In the resulting coverage litigation,Amerex argued that the appraisal demandwas untimely and the excess insurerswaived the right to make such a demand.The court noted that “New Yorkrecognizes that the right to require anappraisal ‘is not indefinite as to time, butmust be exercised within a reasonableperiod.’” 42 Accordingly, the resultinginquiry was whether the delay was“reasonable.” The court applied a threefactortest:(1) whether the appraisalsought is 'impractical orimpossible' (that is, whethergranting an insurer's appraisaldemand would result inprejudice to the insured party);(2) whether the partiesengaged in good-faithnegotiations over valuation ofthe loss prior to the appraisaldemand; and(3) whether an appraisal isdesirable or necessary underthe circumstances. 43In applying these factors to the caseat hand, the court concluded that theinsurers did not waive the right to demandan appraisal: “Amerex's challenges of thePanel's ultimate valuation and the timetaken to reach that valuation are merelypost-hoc criticisms of the appraisalprocess and results and do not provide areason why the district court should haveanticipated at the time the appraisal wasdemanded that the appraisal wouldprejudice Amerex.” 44Amerex also argued that the panelimproperly decided issues of law, notpurely the issue of damages. The court42 Id. at 199, citing Chainless Cycle Mfg. v.Sec. Ins. Co., 169 N.Y. 304 (N.Y. Ct. App.1901).43 Id. at 201.44 Id. at 202.
The Global Supply Chain Page 425noted that the distinction betweencoverage and damages is more difficultwhen the insured seeks coverage for lostbusiness income, however the courtconcluded nonetheless that the panel didnot decide issues of law in reaching itsdecision:While the present disputecertainly included legalarguments concerning thepolicy's coverage, thosedisputes were not implicated inthe appraisal's resolution. ThePanel instead focused solely ondetermining the extent of thedamages, including calculatingthe relevant restoration period,and did not address whetherthe Excess Insurers' policiescovered those damages. Thus,the Panel did not addressconflicting views of theapplicable policies, but ratherresolved factual questionsregarding claims about theconflicting causes of the lostbusiness income. 45The party seeking damages mustprovide sufficient evidence to sustain itsburden of proof. Expected profits basedupon a continuing relationship orpromises of additional order may beevident to a company, but absent actualevidence, it is unlikely a judge or jurywill award damages. Companies thatsustain losses as a result of defectivegoods or a breakdown in its supply chainmust be able to present evidence of lostprofits or other damages in order recover45 Id. at 205.such damages in a resulting litigation, oreven receive reimbursement from aninsurer.4. ExpertsA company seeking damages in theform of lost profits, increased costs orreplacement value, must pay carefulattention to proper bookkeeping prior tothe event. It is equally important to retainthe necessary expert to meet the burden ofproof in establishing damages. Courtswill not accept a witness as an expertunless the proponent meets its burden ofestablishing that the witness possessessufficient knowledge, experience, trainingor education to qualify him as an expert.Testimony cannot be vague orunsubstantiated and often, the scope of anexpert’s testimony must be limited to hisarea of expertise. 46Under the Rule 702 of the FederalRules of Evidence, an expert may bepermitted to offer testimony:If scientific, technical, or otherspecialized knowledge willassist the trier of fact tounderstand the evidence or todetermine a fact in issue, awitness qualified as an expert .. . may testify thereto . . . if (1)the testimony is based uponsufficient facts or data, (2) thetestimony is the product ofreliable principles andmethods, and (3) the witnesshas applied the principles andmethods reliably to the facts ofthe case.46 See Hernandez v. Lutheran Medical Center,46 A.D.3d 517 (N.Y. Sup. Ct. 2007).
Page 4 and 5: Page 380advanced in the world, yet
Page 6 and 7: Page 3822013 midyear MeetingFebruar
Page 8 and 9: Page 384Defense Counsel JournalBoar
Page 10 and 11: Page 386Calendarof MeetingsMidyear
Page 12 and 13: Page 388 DEFENSE COUNSEL JOURNAL-Oc
Page 36 and 37: The Global Supply Chain: Understand
Page 62 and 63: Fending off the Use of a Rule 12(f)
Page 78 and 79: Predictability in Punitive Damages:
Page 98 and 99:
Page 474 DEFENSE COUNSEL JOURNAL-Oc
Page 100 and 101:
Page 102 and 103:
Page 104 and 105:
Page 106 and 107:
Page 108 and 109:
Page 110 and 111:
Page 112 and 113:
Page 114 and 115:
CONNINGConning theIADC NewslettersI
Page 116 and 117:
Page 118 and 119:
Newsletters Page 494TEXAS STATE COU
Page 120 and 121:
Page 122 and 123:
Page 124 and 125:
Page 126 and 127:
Page 128 and 129:
Page 130 and 131:
Page 132 and 133:
Page 134 and 135:
Page 136:
U.S. Postal Service Statement of Ow
show all

Defense Counsel Journal - International Association of Defense ...

Create successful ePaper yourself

Delete template?

Save as template?