Claims and Bad Faith Law Blog

Duty to Indemnify Distinct From Duty to Defend, Coverage Distorted.

In a case involving New York law, the Supreme Court of Delaware highlighted a distinction between the duty to indemnify and the duty to defend that is recognized in most if not all jurisdictions as to a liability carrier's duties to its insureds:

          Although the Insurers' fraud defense required them to prove that Conduent manufactured indemnity coverage through the settlement, the Insurers left the impression at trial that they had no coverage obligations at all.....  The Insurers' duty-to-defend issues and coverage position pre-Settlement had little if anything to do with whether Conduent fraudulently settled the State Action to secure indemnity coverage.  By probing these issues [at trial], the Insurers caused confusion between indemnity coverage and the duty to defend.

AIG Spec. Ins. Co. v. Conduent State Healthcare, LLC, ___ A.3d ___, 2025 WL 369450, at *8 (Del. Feb. 3, 2025)/

Case law on the issues discussed in this post is collected in Volume 1 of the Third Edition of LITIGATION AND PREVENTION OF INSURER BAD FAITH § 3:52 (Thomson Reuters West Publishing Co., with 2025 Supplements in process).

Please read the disclaimer.  ©2025 Dennis J. Wall.  All rights reserved.  Interested in many things including Claims and Bad Faith Law?  Sign up for a free subscription to my Substack newsletter. 

OFF WITH THEIR HEADS!

Or, how dare they question the regime?

Administrative Stay Order.  (Author Photo)

When the regime refused to turn the planes around and return the people it had abducted to a notorious prison in El Salvador, Judge James Boasberg held a Hearing on whether the regime should be held in Contempt of Court.

After the Hearing was over, Judge Boasberg wrote down all the evidence.  He also wrote down all the reasons why he found Probable Cause to hold the regime in Contempt based on all that evidence.  His Order is 46 pages long. He does not seem to have overlooked anything.  Download JGG v. Donald J. Trump Contempt Findings . Memorandum Opinion filed 04.16.25 (D.C.D.C. No. 25-766 (JEB)) 

The regime filed an appeal, of course.

Look at this appeal like an appellate lawyer would, and early on you would find out who your judges are.  Then you would find out all you could about them.

The regime not only filed what they call an emergency appeal, they also filed what they called an emergency motion to stay (or stop) the Contempt proceedings in Judge Boasberg's Court.  (Everything is an emergency with these people.  They don't dare give you time to think.)

Under the D.C. Circuit Court rules, the emergency motion was referred to a special panel to decide it.  The D.C. Circuit rules provide that the special panel can stay with the case and decide it too,  although that would be unusual.

There were three judges on the special panel in this case, which is usual.  Two of the judges voted for an administrative stay, and one did not.  As the two judges stated in their Administrative Stay Order in this case, in the D.C. Circuit Court the purpose of an administrative stay "is to give the court sufficient opportunity to consider the emergency motion[.]"  

The two judges who voted for a stay  are GREGORY KATSAS and NAOMI RAO.

Judge Katsas practiced law at Jones Day.  He moved over to the job of Deputy White House Counsel alongside Don McGahn, who also came from Jones Day.  David Enrich, who wrote a book about Jones Day, wrote that when Gregory Katsas left Jones Day for his new job at the White House in the first round of the regime, that "Greg Katsas received a bonus -- 'at the discretion of the managing partner,' as he explained in a government filing -- that brought his compensation to nearly $4 million for the year."[1] 

Naomi Rao is well-known to everyone who follows the rulings that sometimes come out of her pen when she can get another vote on the D.C. Circuit to make her ruling the Opinion of the Court.  Many of her dissents are just as well-known.

Both Judge Katsas and Judge Rao were nominated by the same man who is the current first-named appellant, the present head of the regime and the co-president (no, not Elon Musk, the other one).

The third judge on the special panel in this case, the judge who did not vote to grant an administrative stay in this case, is CORNELIA "NINA"  PILLARD.  Judge Pillard was nominated by President Obama.  The special panel's Administrative Stay Order reveals that she dissented because she did not think it was proper; in fact, she thought "there is no ground for an administrative stay."

Knowing what you know now, suppose that right now you are sitting with the lawyers representing JGG and the other people who were abducted to El Salvador.  In this case, your lawyers are effectively representing the Judge who found Probable Cause to hold the regime and its leader in contempt of Court.

Suppose further that all you know about your judges on appeal is what I have told you here.  (I guarantee that this is enough to know for purposes of evaluating how they might rule and what arguments to craft that might work best, if at all, which good appellate lawyers have to do in every appeal.)

Do you think that you have a 100% chance of winning this appeal?  OK, probably not.  How about 50-50?  25%?  Lower %?

You make the call.  But wait!  Before you make the call, wait to see if the special panel sticks around to decide the whole case.  If that happens, unusual though it might be, it will likely predict the outcome right then and there.

My call is that the special panel will decide the whole case.  I also predict that Judge Katasa and Judge Rao will go with the regime.  I would not be surprised if their opinion put the blame on Judge Boasberg and on the people who were kidnapped because, after all, Judge Boasberg had the audacity to issue rulings against the regime right there in his Courtroom and all,  and those people who were kidnapped also got in the way standing there on the street or in their homes or wherever.

Whatever their opinion says, my prediction is a 2-to-1 decision in favor of the abductions and against the 46 pages of evidence reviewed by the District Judge when he found Probable Cause to hold the regime and the regime's current leader in contempt of Court.

Please read the disclaimer.  ©2025 Dennis J. Wall.  All rights reserved.  Interested in many things including Claims and Bad Faith Law?  Sign up for a free subscription to my Substack newsletter.

 

[1] DAVID ENRICH. "SERVANTS OF THE DAMNED / Giant Law Firms, Donald Trump, and the Corruption of Justice," p. 242.  I previously referred to Jones Day and Mr. Enrich's book in an article posted here on Good Friday, April 18, 2025.

When Unfair Claims Settlement Practice Violates Consumer Protection Statute.

The Supreme Judicial Court of Massachusetts has found an interplay between an Unfair Claims Settlement Practices Act, on the one hand, and a Consumer Protection Statute, on the other.  In Massachusetts, a violation of Massachusetts General Laws Chapter 176D or the equivalent of an Unfair Claims Settlement Practices Act, is in law the same thing as an "unfair or deceptive act or practice" as that term figures in claims made under a Consumer Protection Statute, Massachusetts General Laws Chapter 93A.[1]  As the Court has held:

          Recovery under G.L. c. 93A for a violation of G. L. c. 176D, § 3 (9), is unlikely when "[a]n insurance company ... in good faith denies a claim of coverage on the basis of a plausible interpretation of its insurance policy."[2]  

[1] McGilloway v. Safety Ins. Co., 468 Mass. 610, 618, 174 N.E.3d 1191, 1199 (Mass. 2021).

[2] McGilloway, 488 Mass. at 618, 174 N.E.3d at 1200.  Accord, Marandino v. Utd. States Fire Ins. Co., No. 23-cv-40072-DJC, 2025 WL 902352, at *6 (D. Mass. March 25, 2025).

Case law on the issues discussed in this article is collected in Volume 1 of the Third Edition of LITIGATION AND PREVENTION OF INSURER BAD FAITH § 3:28 (Thomson Reuters West Publishing Co., with 2025 Supplements in process).

Please read the disclaimer.  ©2025 Dennis J. Wall.  All rights reserved.  Interested in many things including Claims and Bad Faith Law?  Sign up for a free subscription to my Substack newsletter. 

James Uthmeier The Unelected Florida Attorney General.

(Author Photo of the inside book cover)

Jones Day was so famous that a book was written about that huge law firm, SERVANTS OF THE DAMNED, by David Enrich.

One James Uthmeier worked at Jones Day before he took a job advising the Commerce Secretary in the first iteration of the current regime.  (The Secretary of Commerce at the time was a client of Jones Day.)  He is mentioned briefly on page 241 of the book.

As described in the book, one of the things that made Jones Day famous enough to get their own book was writing threatening letters.

James Uthmeier left the Commerce Department and at some point became the Chief of Staff to the Governor of Florida.  When the Florida Attorney General resigned, the governor appointed Mr. Uthmeier to the post.

A relatively recent appointment, Uthmeier has made headlines with at least one letter.  For example, he wrote a letter to the Mayor of Orlando threatening to remove the Mayor from office if Orlando did not follow the immigration laws, among other things.

In context, the Florida governor has already removed two elected officials from public office, both Democrats.  One, the State Attorney who is headquartered in Orlando, ran and won re-election after she was removed from the office.  Mr. Uthmeier has recently made comments about her, but so far apparently only verbal comments and not in writing.

Back to the Mayor of Orlando and the threat to remove him from office if Orlando did not enforce the immigration laws.  The Mayor wrote back immediately after receiving the letter from General Uthmeier to inform Uthmeier that, in essence, Orlando is following all the laws including the immigration laws.

Not content with the Mayor having the last word apparently, Mr. Uthmeier gave a TV interview following the Mayor's letter, and he said that his letter worked and then pretty much repeated as the Mayor had said, that Orlando was following the law.

It would have been interesting to see if the Florida Attorney General would have actually sought the removal of the Mayor of Orlando from office.  But by what authority, General, by what authority?  Perhaps we will never know, but in the meantime, there is the State Attorney who might be removed from office ....

It is Good Friday.  Please read the disclaimer.  ©2025 Dennis J. Wall.  All rights reserved.  Interested in many things including Claims and Bad Faith Law?  Sign up for a free subscription to my Substack newsletter. 

'TO MAKE A REASONABLE OFFER AFTER LIABILITY IS REASONABLY CLEAR.'

In Urban v. Zurich Am. Ins. Co., 752 F. Supp. 3d 310 (D. Mass. 2024), a U.S. District Judge in Massachusetts considered whether the liability insurance carrier defendant had violated Massachusetts statutes by failing to make a reasonable offer after the policyholder’s-insured’s liability had become reasonably clear.

           As to whether the policyholder-insured’s liability was reasonably clear at any point during the underlying claim, this case involved the possibility of a jury finding of comparative negligence.  The Court pointed out that “[w]hile comparative negligence can, in some cases, prevent liability from becoming reasonably clear,” insurance carriers have an obligation to make a reasonable settlement offer, which they cannot avoid “by hiding behind the gamesmanship of anticipated success at trial.”  Urban, 752 F. Supp. 3d at 341.

          As to the reasonableness of the carrier’s offers, the Court noted that under Massachusetts law (as under the law in most if not all U.S. jurisdictions) all insurance carriers are subject to the following legal standard:  “Reasonableness can be measured by looking to the undisputed evidence indicating the damages suffered against the offer tendered.”  Urban, 752 F. Supp. 3d at 344 (emphasis added). 

          The Court in this case awarded double damages against the defendant carrier in the amount of “$2,841,358.26, plus attorneys’ fees” because it failed to make a reasonable offer after the liability of its policyholder-insured had become reasonably clear in the underlying case.  Urban, 752 F. Supp. 3d at 346.

Third-Party Bad Faith case law on the issues discussed in this article is collected in Volume 1 of the Third Edition of LITIGATION AND PREVENTION OF INSURER BAD FAITH § 3:28 (Thomson Reuters West Publishing Co., with 2025 Supplements in process).  First-Party Bad Faith case law on these issues is collected in Volume 2, § 9:14.

Please read the disclaimer.  ©2025 Dennis J. Wall.  All rights reserved.  Interested in many things including Claims and Bad Faith Law?  Sign up for a free subscription to my Substack newsletter. 

 

DÉJÀ VU, ALL OVER AGAIN.

It worked for them before.  The regime notoriously spirited one Mahmoud Khalil out of New York City before a federal judge there could rule in his case.  Then the regime argued that the federal judge had no jurisdiction since Khalil was no longer there.  “The regime's response to Khalil's demand to return him to New York City was to say that the federal Court there has no jurisdiction.”  The Doctrine of Nanny Nanny Boo Poo, posted here on March 18, 2025.

In that case, the federal judge in New York City ultimately agreed.  But that was because Khalil filed a habeas corpus petition.  The Latin basically means, “deliver the body,” and the federal judge in New York City ruled that if there was no body in New York City, then he did not have jurisdiction in a habeas case.

That’s not what happened in the case of Kilmar Abrego Garcia.  The regime took Abrego Garcia to prison in the Salvador gulag, outside of the United States, where his life is undeniably in danger.  An immigration judge ordered years ago that Abrego Garcia’s life was in danger if he was sent to El Salvador, and that as a result he should not be sent there.

The regime admitted that their abduction of Abrego Garcia was a mistake and they should not have done that to him.  Moreover, Abrego Garcia’s lawsuit was not a habeas corpus petition since he had already been removed from the U.S.  Instead, he alleged that the regime violated his Constitutional rights in sending him out of the country to prison in El Salvador.    See  Download Abrego Garcia v. Noem Complaint Doc. No. 1 filed March 24 2025 (D. Md. Case No. 8.25.cv.00951.PX) and Download Abrego Garcia v. Noem P's Emer. M. TRO Doc. No. 2 filed March 24 2025 (D. Md. Case No. 8.25.cv.00951.PX).

So what could the regime’s lawyers do to make this case like Khalil’s?  Through a lawyer, they declared that Abrego Garcia’s case was really a habeas corpus case and, as in Khalil’s case, the federal court would not have jurisdiction. 

The regime added one further thought.  They argued that since Abrego Garcia had actually been removed from the country, that a United States District Court had no jurisdiction over his case and the Court could not order the regime to return him to this country.  A lawyer actually wrote that, and the regime actually said that.  See Download Abrego Garcia v. Noem Ds Opp. Memo. to P's Em.M.TRO Doc. 11 filed March 31 2025 (D. Md. Case No. 8.25.cv.00951.PX).

The U.S. District Judge in this case, Judge Paula Xinis, disagreed.  She denied Abrego Garcia’s first try at a Temporary Restraining Order, but she ruled in his favor on his second try, when he filed what the Judge called a Motion for Preliminary Injunction.  She granted his motion and also ordered the regime to return him to this country.  Download Abrego Garcia v. Noem Order Granting Prelim. Injunction (D M.Stay) Doc. 21 filed April 4 2025 (D. Md. Case No. 8.25.cv.00951.PX) and Download Abrego Garcia v. Noem Memorandum Opinion (D M.Stay) Doc. 31 filed April 6 2025 (D. Md. Case No. 8.25.cv.00951.PX)

The regime has now appealed to the Fourth Circuit Court of Appeals, where I understand that they have filed an emergency motion to stay the District Judge’s Order.  (Why might there be an emergency you ask?  There isn’t any emergency that I can see.)

Ordinarily, a motion for a stay on appeal, emergency or otherwise, would go to a panel of Fourth Circuit judges but there is a way to circumvent that normal process.  I will go into it later if it turns out that the regime is trying it, but I do not wish to give them ideas.

But that will not stop me from making a prediction for you about the ultimate success of the regime’s appeal in this case:  I think that the Fourth Circuit will reverse the District Judge and hold that although mistakes were made, it is not the regime’s fault, i.e., the regime does not have to take him out of harm’s way by removing him from the Salvadoran death-trap of a prison to which they mistakenly sent him.

I make this prediction because I do not think that many judges on the Fourth Circuit Court of Appeals have the stomach to order the regime to do something that the regime may refuse to do.  It may be that there are not many judges, federal or State, who have the stomach for the regime to defy their orders.  Whatever would they do in that event?  Rather than force the issue, I predict that they will side-step it completely.

They will rule that Abrego Garcia must stay in the prison in El Salvador without forcing the regime to obey the District Court.

At least for now.

Perhaps forever.

Time will tell.

Please read the disclaimer.  ©2025 Dennis J. Wall.  All rights reserved.  Interested in many things including Claims and Bad Faith Law?  Sign up for a free subscription to my Substack newsletter. 

 

Last Thursday ICE abducted a person who was standing trial.

(oneag news agency; Wikimedia Commons)

 

The person, Wilson Martell-Lebron, was on trial for providing false information on an application for a license. He was on trial for a crime.

On the first day of his criminal trial in Boston Municipal Court, Martell-Lebron was abducted by ICE. ICE says that he is from the Dominican and that he was in the U.S. without sufficient documentation. I understand that this is a civil offense, not a crime.

The criminal trial judge, Judge Mark Summerville, conducted an inquiry. He reportedly heard testimony about the incident from the Assistant District Attorney last Friday, testimony which finished up on Monday of this week.

Judge Summerville found that ICE premeditated their obstruction of justice in this criminal case. He further found ICE agent Brian Sullivan responsible, that Sullivan "conspired in a premeditated manner" to obstruct justice by abducting Martell-Lebron, and that Sullivan was a member of the prosecutorial team (at least for purposes of this issue).

Judge Summerville further found that ICE agent Sullivan "intentionally" and "egregiously" deprived Martell-Lebron of Constitutional rights, and that ICE and Sullivan have no intention of returning Martell-Lebron to resume his criminal trial.

The judge was quoted in reports as saying that "I find that this court cannot trust ICE to return the defendant back to court. I don't find that they're credible. I have no confidence in ICE no matter what they told the Commonwealth, that they would ever bring this defendant into court."

Following this inquiry, the judge found Sullivan in contempt.

The judge also dismissed the criminal charges against Wilson Martell-Lebron for prosecutorial misconduct.

So far, I have seen four of these videos filmed during three abductions which are becoming commonplace. ICE agents abduct someone and bundle them into a waiting black SUV. (I assume that they are agents from ICE because that is what they say, but who knows the truth of who they work for?)

It has not been reported so far as I know, but it is not hard to pick up a pattern from these kidnapping videos: There are always 6 people involved in the abduction, all of them always in plain clothes, they use handcuffs, and they are often but not always masked.

The person they abduct is always alone.

So, in this case, if the judge had wanted to, there seems to have been enough legally sufficient evidence to warrant finding 6 "agents" in contempt, without stopping just at Sullivan.

Back to Mr. Martell-Lebron's abduction and his criminal trial that was scheduled to start in Judge Summerville's courtroom last Thursday. I look at this situation from the standpoint of the people who were in that courtroom. There was the judge, the defense attorney, and the prosecutor. For some reason I do not know, reportedly there were also two Massachusetts State Troopers there.

The judge and the defense attorney apparently had no inkling that ICE was waiting to seize Martell-Lebron. The Assistant District Attorney did not know that ICE would seize the defendant during trial, the judge found.

The question becomes whether anyone associated with this incident knew that ICE was planning to abduct the defendant as soon as the trial concluded.  The reporting is unclear although one of the State Troopers reportedly testified last Friday that Ice Agent Sullivan told him and the prosecutor that ICE planned to abduct the defendant, apparently on the first day of trial.

A statement by a spokesperson for the Massachusetts State Troopers offered that the State Troopers followed the department’s policy of not speaking about ICE plans if they know what ICE is going to do.

Whatever anyone knew about ICE plans for Mr. Martell-Lebron, they apparently did not tell either the judge or the defense attorney.

• The judge, who is very likely to deal with the two State Troopers in future cases, has seen with his own eyes and heard with his own ears that the loyalties of these two State Troopers probably do not lie with him or his Court, or with Massachusetts and its laws. If they were, they would have told the judge what ICE was planning to do if they knew it in advance.  The judge reportedly said as much himself in the Hearing.
• Returning to that statement by a spokesperson for the State Police, this apparently was supposed to exonerate the two State Troopers involved in this situation because the Troopers supposedly neither stopped ICE or helped ICE. I call BS. They helped ICE by staying silent. That is what they wanted to do; we know that because that is what they did.

Think on this as well. ICE and its masters have made it pretty clear that they have no respect for persons they find on the street or in their homes including on Thursday of last week in Massachusetts.

And think on this: ICE and its masters showed clearly and beyond any reasonable doubt on Monday that they have no respect for judges, the United States, or the law.

Please read the disclaimer.  ©2025 Dennis J. Wall.  All rights reserved.  Interested in many things including Claims and Bad Faith Law?  Sign up for a free subscription to my Substack newsletter.