Episode 34. Attorneys as Witnesses

In this week’s episode, Bob discusses why it’s best to avoid attorneys as expert witnesses in coverage cases in light of recent court decisions in Sheehy v. Chicago Title Insurance Company and Brand v. 20th Century Insurance Company.

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Transcript

The 4th District Court of Appeal in California issued an opinion on January 21,

2025 that's interesting for the back story rather than for the holding of the case.

The case is called Sheehy -S -H -E -E -H -Y versus Chicago Title Insurance Company. What

happened in that case is the plaintiff disclosed as an expert witness for trial a

lawyer who had previously worked as claims counsel for Chicago Title Insurance Company.

Chicago Title moved in limine to preclude the lawyer from testifying and the the

motion was granted by the Superior Court, meaning that the lawyer could not testify.

And so I'm assuming the backstory is that the plaintiff was left without a claims

handling expert. What the plaintiff then did was file a petition for writ of

mandate, which was merrily denied and then filed a notice of appeal.

And the question for the Sheehy court was whether the ruling on the motion in

Lemony was appealable.

The Sheehy court held that it was not, which left intact the order in limine

precluding the attorney with the conflict of interest from testifying and who knows

how they're going to resolve the case from that point. Technically you don't need a

claims handling expert in a coverage or bad faith case but lots of lawyers and lots

of parties like to use them and I guess that's why they're out there. But the

backstory here is how could the lawyer who is a former claims counsel for the

insurance company, believe that he or she was entitled to testify against the former

client. That just seems to be a pretty clear conflict of interest.

Of course, we don't have enough detail about the issues in the case to do a full

-on ethics evaluation of the case, but it just seems on its face that there was

likely conflict of interest.

What the Sheehy court did, though, was disagree with prior decision of the Second

District Court of Appeal in California that had come to a different conclusion,

but as you will see, came to the same result.

In a 2004 case called Brand, B-R-A-N-D, versus 20th century insurance company,

the plaintiff disclosed as an expert,

an attorney who used to defend the defendant insurance company who had provided

coverage advice and other recommendations, but had not done so for 12 years.

So what happened in the brand case is that the insurance company had done a motion

in limine or a motion for protective order, to preclude the attorney from testifying

and the superior court looked at it, did a weighing and an evaluation and said,

no, there's not enough of a conflict of interest here will allow the attorney to

testify. So that goes up on appeal.

Now, let's just stop there for a second. In Brand, absent appellate court intervention,

the attorney is going to testify against his former client. In Sheehy, absent

appellate court intervention, the attorney is not going to testify against his former

client. So at that stage of the litigation we have disparate outcomes and they

possibly could be explained by all the details of the former representation but just

on the face it appears that those are inconsistent results.

So back to Brand, that court held that the order allowing the attorney to testify

against the former client was immediately appealable and then the court reversed.

So it took two steps in the Brand case for the attorney to be precluded from

testifying, but only one step in the she /he case, and in both cases,

the attorney was not allowed to testify. So it seems to me that the outcome is the

same. It's just that it took another stage to get here. And the question is how

the Court of Appeal got there. Court of Appeals said we don't want to deal with

it. The attorney is not testifying. It's not appealable. The other attorney said

you're allowing the attorney to testify.

We don't think that should happen. The order is appealable. The attorney is not

testifying.

And this got me to thinking about attorneys as witnesses.

You know, even though the conventional wisdom among experienced trial lawyers and

judges is that attorneys don't make good witnesses, there are times in coverage and

bad faith litigation when an attorney must testify. For example,

when an attorney is a fact witness and the fact is disputed, she must testify,

you have to have a way to get that fact into evidence. I've called defense

attorneys to testify about things that happened in the course of the underlying

litigation.

For example, I've asked them to testify about when critical facts became known or to

talk about the course and timing of settlement demands and offers.

But I only call them to testify if there's no other way to introduce that evidence.

To me they have to be just an essential witness with no alternatives because you

get too mobbed up in attorney -client privilege objections,

attorney work product objections, and issues related to conflicts of interest because

most attorneys in my experience are sensitive to those things.

I get sensitive to those things. I've been called as a fact witness in deposition

several times.

For example, people want to know just what I would want to know when did certain

facts arise in the case and what was the course of settlement negotiation,

those kinds of things. And I can testify to those if they're an issue in the case.

But when I've been called as a fact witness, I think it would have gone better for

the questioning lawyers if they had confined the questions to the facts. But it

seems difficult for some people to stay away from privileged communications and work

product, and often lawyers questioning other lawyers want to become argumentative and

assert positions and find out what the witness is gonna say about the substance of

those positions. That is not the role of a fact witness. That's the role of an

expert witness. I should disclose that I have testified at trial as both a fact

witness and an expert. But I limited the expert testimony to coverage analysis.

Basically, the coverage testimony that I gave was walking through the insurance policy

and applying the facts provided by others. And generally, in my opinion,

you don't need an expert and are not entitled to an expert because that's the

province of the judge.

It just happened that the one time I filed a trial, the judge asked for me,

so that was a nice feeling and I felt like I could just go in and explain the

process to the judge, it was a court trial, not a jury trial, and so to me that's

a one -off.

I would not provide expert testimony on claims handling.

I have been asked to, but I decline. The first reason is,

in my opinion, lawyers generally do not have the breadth of experience needed to

address insurance industry practices, procedures, and the standard of care.

I've been practicing law for 40 years, and I've had a breadth of experience with a

number of insurance companies, but I don't do a survey of the insurance industry

generally and I know what my clients have done under certain specific situations,

but I don't know what the standard the industry is with regard to certain things.

I hire experts if I need to know that stuff, So, and in California at least,

a lawyer just by dint of having been a lawyer, a defense lawyer or a coverage

lawyer, is not deemed to have adequate industry experience to be a claims handling

expert. So I usually decline those.

In fact, I would say I have always declined Engagement as a claims handling expert.

I just don't want to do it and don't feel qualified to do it But like I said

once I was asked to be a claims handling expert and in that case I Was not

convinced that the lawyer who wanted to hire me had really thought through the

issues. I could have helped them with those issues and with a coverage analysis and

with a analysis of what the alternatives were that could have been done in response

to the facts that were available, but that's really acting as a lawyer, not acting

as an expert.

What they really wanted to do though, and this was perhaps more important in my

decision to decline that retention, was that the insurer wanted to write me a script

that I would appear at trial and recite for a flat fee.

Well, I said, "No, thank you to that," because I wouldn't be in a position to

vouch for what was said. I wouldn't it wouldn't be my own opinions and I just

didn't want to be bought and paid for in that way

But I Don't know if I'm in the minority or not But I know there are plenty of

lawyers who believe they are qualified to testify about claims handling and they're

ready and willing to do so So many of these lawyers in my experience are no longer

really practicing law but they feel like they had enough experience as an insurance

defense lawyer or a coverage lawyer to hold themselves out as an expert and maybe

that's true maybe they can qualify as an expert in fact I've come up against

lawyers who are valid claims handling experts. One I have in mind is a professor of

law from a university in Texas who writes about claims handling,

reads voraciously about claims handling in the industry, teaches claims colleges and

really has more industry experience it seems than he has legal experience and when

he testifies he's a good witness and I think he knows what he's talking about.

So the takeaway from this is just it seems like courts are not keen on having

lawyers testify as claims handling experts and you probably shouldn't be allowed to

have a lawyer testify as a coverage expert because that's what the court is there

for. As I've shown though sometimes courts find that helpful might not be helpful to

a jury and so the difference may be at least in my case where I testified it was

a court trial, not a jury trial. But more importantly to all of this is even

though they got there in different ways in Brandt and Sheehy, in both cases the end

result was that a lawyer who had previously represented the insurance company was not

permitted to testify to claims handling aspects because there was a conclusive

presumption that the attorney had obtained confidential information and would use it

or Couldn't help but use it in providing his testimony before the particular

criminal, court or jury, and that was a violation of the rules of professional

conduct because of the conclusive presumption of a conflict of interest. So try to

avoid lawyers as experts, and if lawyers volunteer to be experts,

make sure that They've never represented the insurer, or as in the case in brand,

consulted with the insurer and taught claims handling procedures to the insurance

personnel. Those things were conclusively presumed to create a conflict of interest

and resulted in disqualification of that lawyer as an expert witness.

Just be careful about people offering to give expert testimony.

Lawyers, particularly policyholder lawyers, want somebody to talk about how negligent

and bad the insurance company was. And another lawyer that's willing to do that may

not be your best bet, and you may be left with no expert at all to testify in

your trial. It's better to find a qualified industry professional who can look at

the case not as an advocate but as a genuine expert and evaluate it objectively in

line with the standard of care prevailing in the insurance industry. So that's it

for this episode of Coverage Counselor's End. I'll look forward to speaking with you

next week. Until then, t