Losing A Winning Case

Lots of lawsuits are in the news these days over the ways government works. Or maybe over the ways government is supposed to work, as argued by the two opposing litigants. When results come out, the winners crow that justice was served and the losers argue that the judges were in the tank for the other side. But in my experience, this kind of thing happens all the way up and down the court system, and in even the most basic disputes. And in these disputes, judges can sometimes find a way to make things “come out right”, never mind the law.

For much of my career, I represented insurance companies in a kind of case called “subrogation.” This is a fancy word for this situation: You suffer a loss. Your insurer pays you. By paying a claim, the insurer steps into the policyholder’s rights against anyone else who might have caused that loss. This gives the insurer the right to sue that 3rd person to recover at least some of the money they paid out.

One of my first cases of this kind arose out of a house fire. It was an old house in a sketchy neighborhood that was being rented to the kinds of tenants who bump along the bottom edges of productive society. It was a cold day and the tenant moved his motorcycle into the enclosed back porch to work on it. He took off the gas tank and began pouring gasoline into a bucket. About 3 feet from the gas-fired water heater. You can probably figure out what happened from here. The tenant, who only suffered some minor burns, was probably the luckiest man alive that day.

The insurer paid the landlord’s fire claim and hired my office to sue the tenant. I always hated these cases – a lot of money was involved and my claim was against some poor schmuck whose idea of striking it rich was to find a $50 bill on the sidewalk, so the odds of any significant recovery were near zero. The tenant had a lawyer – the law firm had once handled a big injury case for someone in the client’s family, and took this case on more or less out of charity. I was on friendly terms with the other lawyer and we tried to get it settled, but the guy simply had no money. My client was willing to be reasonable, but could not agree to take nothing, so there was no choice but to go to trial.

On the day of trial, I knew I had a winning case. First, the lease explicitly prohibited tenants from working on vehicles on the property. Second, how could it possibly not be negligent to pour gasoline in such close proximity to an open flame? The poor dumb tenant may not have known what would happen in that situation, but the law looks at it from the perspective of “a reasonable man”. And no “reasonable man” would have done what that guy did. The other lawyer sized the case up in exactly the same way. He shrugged his shoulders and said that all he could do was brace for impact and then probably follow up by handling a bankruptcy for the poor unfortunate who he represented – which would get him out from under any judgment I might obtain.

I never asked for a jury in these cases because at least some jurors would never want to award money to an insurance company, even if the law said it was entitled. The other guy did not ask for a jury either, so we were both in the hands of the judge.

During the trial, my witness testified just like I wanted him to, and everything went right for me. It became evident that the tenant was a nice guy, but was not much more intelligent than his motorcycle. The defense attorney did what he could, and got his client to say that the landlord had seen him keep his motorcycle on the back porch. That was the best he could come up with. Which turned out to be all that the judge needed – even though the landlord had never seen the motorcycle being worked on .

I lost that trial. The judge found the tenant negligent, but also found the landlord negligent for failing to foresee that the tenant would work on the motorcycle and start a fire. At the time, even a little bit of negligence by the one bringing the suit would defeat any amount of negligence by the wrongdoer. And because the landlord’s negligence barred any recovery, the insurer’s rights went no farther and were barred too.

The judge knew good and well that the landlord was not negligent. So why did he decide the way he did? Most likely, the judge understood that the former tenant would never, ever be able to repay any of that money and that he would be off the hook anyway after filing a bankruptcy. The judge simply found a way to get to the same place faster and more cheaply. For what it’s worth, if the guy who caused the fire had been insured so that it would have been a case of insurance company vs. insurance company, I am pretty sure this judge would have ruled in my favor. But it wasn’t, and he didn’t.

Results like this can sometimes be straightened out through an appeal. However, this judge knew that I would never appeal the case because even after a successful appeal, I wouldn’t collect from the tenant. The judge also knew that (1) the insurance company would not be hurt because it was never going to get any real money and (2) that my client’s claims manager would blame him and not its young lawyer. So that day, the judge exercised his discretion in a way that would get the case to a “correct” result, even though it was not strictly in tune with the law. It was perfect, really – nobody came out ahead and nobody got hurt.

That was the day I learned that a judge can have a lot of control over the result of a case whether the law is on your side or not. I also learned (that day and many times since) that most judges do not like to make decisions that seem hard or harsh, or to make rulings that don’t seem fair. Sometimes it is politics, but more often it is not. Most of the time, it is simply finding a way to make rulings that will steer a case into a place that the judge considers to be the right result.

When I got back to my office, the senior attorney smiled and said “Yeah, I wondered if something like this would happen.” Before that day, such a thought had never occurred to me. After that day I understood that i could take a sound, well-prepared case to trial – and could still lose for reasons completely beyond my control. I learned one other thing from that trial – really bad things can happen with an open container of gasoline.

23 thoughts on “Losing A Winning Case”

  1. When the law does not favor you, we always tried to find that “peg the judge could hang his hat on.” I have always imagined that insurance companies work hard to avoid juries just like the medical profession does. What jury is not going to feel sympathy for a severely ill or injured plaintiff even if the hospital and doctor did nothing wrong?

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    • All true. Giving the judge a grab-handle is essential! I also learned to work on arguments that incorporated some basic sense of fairness. This was sometimes really hard to do, like when I had to try a case in small claims court against an Amish guy who let his dog run wild before it ran into the front bumper of a Lincoln Navigator. Yes, the insurance company wanted me to sue the owner of the uncontrolled, suicidal dog for damage to the car. As you could imagine, I was pretty much restricted to technical legal arguments on that one.

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  3. My father spent his entire life in the insurance biz, not residential but business and workman’s comp and the like. I heard him espouse many years ago, the need for “professional juries” that understood the law. The idea being, that it’s unlikely to get a jury of “your peers” that’s any where near smart enough to understand what’s going on. It always reminds me of humorist Fran Leibowitz, who once mentioned that she prayed she never ran afoul of the law, since it was impossible to be tried by a jury smart enough to be her peers.

    What’s wrong with the story about the motorcycle guy, is that here we have a person so bereft of intelligence, that he not only dragged a motorcycle into a residential house to work on, he then was messing around with an open can of gas near open flame. He will never be called to account to pay for his stupidity, and he is roaming the earth among us, using his stupidity to create more havoc and loss. At least before OSHA, he might have killed himself in an industrial accident. Our stupid world getting stupider.

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    • In law school, there was a professor who routinely used the acronym of PDB (Poor Dumb Bastard) to describe the hapless injured person in cases we studied. I ran across quite a few PDBs in my career, and this guy qualified. I have wondered if we are actually getting fewer of these people, given the large (and getting larger) number of folks who are destroying themselves with drugs. The people who have been telling us all to “learn to code” have been slowly eliminating jobs for that group of people and they all seem to be “on disability” now.

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      • Maybe the move to get people to learn a trade will be hugely beneficial – maybe not for most drug users, but certainly for people who realize we need plumbers and electricians, not bankers and desk jockeys.

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      • I think if anyone thinks that a person that did that egregious mayhem with motorcycle and gas can would be smart enough to learn and follow plumbing and electrical codes correctly, I think you would be sadly mistaken and may possibly be insulting electricians and plumbers! I went to a trade and technical high school, and a technical college, and while the world needs qualified trades people as well as bankers and computer coders, those trades are equally tech and education dependent! Back in the day when factories recruited “unskilled labor”, a literal moron might have the possibility of a job that would cover their living; but there’s almost zero places for those types of people in modern societies. I grew up in two very blue collar and union areas, and there were always very educated people (mostly Germans) in the trades (who mostly sent their kids to college for “clean” future jobs), and people that may not have been even able to write or understand paperwork, hanging on around the edges. No edges any more.

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  4. This was interesting to me as I once worked in insurance (mostly auto) for a while and found the law interesting. I think this judge sounds like a common sense/compassionate person. Judging by this case, anyway.

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  5. Very interesting – and timely. I learned yesterday about having another deposition within the next 60 days.

    The last trial I was involved with (you know where I work) had the potential of getting ugly – dead six-year old, grandpa involved, etc. We settled. However, it was a pragmatic choice that made complete sense once I thought about it. The settlement was nothing extravagant but was less than what would have been paid out for further attorney costs, expert witnesses, etc.

    The coaching I received prior to my first deposition (a three-hour affair by an attorney whose ex-wife was a coworker, thus no axes for grinding there) was everyone was simply seeking the truth. I’m not convinced of that. Every deposition since has been seeking any way to get leverage, either real or perceived, more than determining the truth or context of the situation. But perhaps that is just my limited experience.

    All that said, the process is fascinating.

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    • I think your limited experience is mostly correct. Yes, you are looking for the truth, but it’s much better to catch the other side in a lie. I used to tell clients before their depositions that their testimony would never win the case, but there were several ways to lose it. 🙂

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  7. Very interesting. I’ve always wondered though, if as you say, a judge can steer a case into a place that he/she considers to be the right result, and he/she instructs the jury before they retire – what happens if the jury comes back with a result the judge doesn’t like or thinks is incorrect according to the law. Yes, I know there is an appeal process but it’s lengthy. Does the judge know the jury’s decision before they say it in court? What if the jury is, as someone alluded to below, not very smart?

    There was a lengthy court case here in the news for months involving five young teenage hockey players who allegedly sexually assaulted a young girl in a hotel room after a night of partying after a banquet for the winning team sponsored by a hockey association . The judge dismissed the jury twice….the second time apparently because one of the defendants lawyers, (all five had their own lawyers) said hello to one of the jury members in a lunch lineup. But I wondered if that lawyer didn’t do that deliberately, as he wanted the judge to judge the case by law alone, which she did and ruled them not guilty. Whereas a jury might have felt more sympathetic to the girl, whom the judge ruled an unreliable witness. The victim didn’t even bring the case herself as she had settled out of court with the hockey association several years prior in a civil lawsuit and was upset about it being later brought forward years later as a criminal case.

    I think the interpretation of the law might be like medicine….not quite as cut and dried as people like to think.

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    • Jury trials are different, because the jury weighs evidence and makes findings of fact. The judge has less leeway, but still decides what comes into evidence (and there are always lots of arguments over this) and decides on the instructions of law that the jury gets.

      I agree completely with your last point. Everything looks black and white in the abstract, but then some set of facts comes along that makes things mighty gray.

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  8. That was interesting JP and what a shock for you … first, after the judge’s ruling and second, to return to the office and the senior attorney said he thought that would happen. That young man was lucky to be unscathed by his carelessness!

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