[00:00:05] Speaker 00: I'm sorry, either we were in court because the statute of limitations had not expired and the case was remanded to the trial court or the district court to ferret out what claims whether the pre-suit conduct gave rise to a separate independent cause of action, whether the pre-suit conduct was a claim in and of itself for bad faith, or whether those pre-suit negotiations between the insurer and the plaintiff's counsel just simply were irrelevant. [00:00:39] Speaker 00: So in our view, even if the court decides that the claims for pre-suit conduct are not a cause of action in and of themselves, what the insurer knew when the plaintiff filed suit in the underlying case is still relevant to evaluating whether the insurer fulfilled its fiduciary duty to the insured. [00:01:02] Speaker 00: So having said that, The arguments, what the district court did is he pretty much excluded consideration of any communications between the insurer and the plaintiff's counsel in the underlying case before the lawsuit was filed. [00:01:18] Speaker 00: But we think that that information that came in this time period between when the insured, Dr. Dodds, reported the claim, and the time that the plaintiff's counsel filed the lawsuit are pretty important. [00:01:34] Speaker 00: In April of 23, I'm sorry, on April 23rd of 2013, Prime begins communicating with the insured. They begin communicating with the attorney for the decedent's family. [00:01:50] Speaker 00: On that day, the plaintiff's attorney provided information the adjuster with the medical records, which included a police report, which kind of outlined horrific events that ultimately resulted in the death of April Jenkins. [00:02:09] Speaker 00: Between April 23rd and the date that the plaintiff filed the lawsuit, which was in August, I believe it was August 22nd of 2013, there were, the prime adjuster spoke with the insured seven times. They were exchanging information. [00:02:30] Speaker 00: You know, I believe Dr. Dodds was, you know, telling the insurer what happened or, you know, giving her side of the story. They communicated about what Dr. Dodds believed may or may not have been a contributing cause to the death. [00:02:47] Speaker 00: So you have seven times where the adjuster is getting information from the insured that the adjuster is using and evaluating the claim. And there are also three separate communications between the adjuster and the counsel for the plaintiff in the underlying case. So there's no doubt that. Prime was taking an active role in evaluating this case before the plaintiff filed the lawsuit. [00:03:11] Speaker 00: The plaintiff did make a pre-suit demand for limits. [00:03:17] Speaker 00: And what the plaintiff asked for is, we believe you should tender the limits of your policy in exchange for a limited liability release, which under Georgia law, [00:03:26] Speaker 01: Oh, so I didn't mean to talk over. That's all right. Why don't you why don't you finish your thought? Sure. [00:03:33] Speaker 00: Sure. I was saying that what the plaintiff had demanded was a limited liability release, which would preserve, which would allow the plaintiff to accept the proceeds of the insurance policy, but still proceed against the insureds to the extent there were other policies of insurance available. [00:03:49] Speaker 01: Okay, and that's what I want to ask you about. So my understanding of Mr. Savage's email is he says to Mr. McBride, you know, I think you in good faith within two weeks should tender your liability limit in exchange for a limited release. [00:04:09] Speaker 01: So if Mr. McBride had said, okay, I will offer you or I accept um i will give you uh fifty thousand dollars um and would there have been an enforceable contract to settle uh and part of that question would be uh i think there's two tenants two principles there one is is mr savage's email an actual offer under utah law and secondly um Is the term limited release, did Mr. Savage communicate in his request for an offer, did he communicate his willingness to accept a demand for a limited release? [00:04:59] Speaker 01: And what would the limited release have entailed? [00:05:05] Speaker 00: In our view, that would have been an enforceable demand or settlement offer, however you want to describe it. [00:05:12] Speaker 00: For the limits of the insurance policy was at that point, to be honest with you, they believed that limits were $100,000. [00:05:20] Speaker 01: Well, so I don't mean to keep interrupting you. Sure. But so could there have been an enforceable contract if Mr. Savage, this is a classic, I think, law school exam. There's not a meeting in the minds when Mr. Savage is saying $100,000 and Mr. McBride thinks it's $50,000. [00:05:43] Speaker 01: If he had accepted, how could there have been an enforceable contract if they both had different unexpressed definitions of what the liability limit was. [00:05:57] Speaker 00: I see what you're saying. And I think at that point, just from experience, the way these communications go forward, you know, they would prime would tender what they believe their limits were, which was fifty thousand dollars. And we would a limited liability release. It's kind of a term of art, I guess, for lack of a better term, where it just what it does is it gives your insurer a huge benefit in that their personal assets are protected. And you can if there's other insurance, you can still pursue those claims, but their personal assets are protected. [00:06:28] Speaker 00: And that's a big value. [00:06:31] Speaker 00: So I think it would have been. [00:06:34] Speaker 00: incumbent on prime to to ferret that out like we we have initiated and we've said we are willing to to take the limits and then it becomes prime's issue to to respond and say okay we believe the limits are whatever we think they are and you go from there and i think an important part of these um eroding this policy was a burning limits or an eroding limits policy and From Prime's perspective, their liability under this policy was capped at $50,000, whether they paid that in settlement or whether they paid that in defense costs. [00:07:04] Speaker 00: So they knew their exposure was $50,000 at that point. And so at that point, I would think their duty is to use that $50,000 to buy the most and best benefit for their insured, which is, in this case, paying and tendering the limits in exchange for a release that helps the insured down the road. [00:07:29] Speaker 01: Well, then why in August did Mr. Savage reject the $50,000 tender? [00:07:35] Speaker 00: In August of, I'm sorry, you're talking about after the suit was filed. Right. [00:07:39] Speaker 01: So in August 2013, they tendered the $50,000. And as I understand your briefing is that, well, Mr. Savage rejected that. [00:07:49] Speaker 01: not because it was an unreasonable offer, but he knew, or at least he thought, unbeknownst to Mr. McBride, that there was a potential claim against the nurse, the attending nurse. And so you're saying, well, Mr. Savage was justified in rejecting that offer, but if what you're saying is right, then how could there be an inference of bad faith if in April of 2013, Savage says, offer the liability limit. [00:08:30] Speaker 01: You're acknowledging today that it is a $50,000 liability limit. He offers that in August of 2013. [00:08:38] Speaker 01: And this man who you say would have accepted that offer actually rejected exactly the same offer that you're saying would have been accepted 56 months earlier. [00:08:47] Speaker 00: I think the timing makes a difference because by that point we had had, I'm sorry, the plaintiff's attorney had to file a lawsuit. [00:08:55] Speaker 00: And The release, the response from the insurance company from Prime was that we'll get a full release. And Mr. Savage believed that a full release would impair his ability to go against other tortfeasors. And so at that point, he was not willing to accept that. [00:09:14] Speaker 01: But you have an argument that he communicated that, right? [00:09:18] Speaker 00: Right. But I would, you know, that's kind of, it's a two-way street. The insurance company is the one with the fiduciary duty to their insured. [00:09:25] Speaker 01: Can I ask you one last question? And I promise to shut up after that. So I've asked you too many questions. But if hypothetically, and I know you don't agree with this premise, is that Mr. Jenkins, Mr. Savage, anyone on behalf of Dr. Dodds, CLJ, Jenkins, never communicated an offer or a definitive willingness to accept $50,000 to settle in the entirety of the claim, do either one of your bad faith theories, can you prevail under either one of your bad faith theories? [00:10:07] Speaker 01: From my reading of the briefs, my understanding is that the premise of both theories is that Prime didn't offer $50,000 early enough, and if they had done that, they would have, McBride would have, or Savage would have accepted it. [00:10:34] Speaker 01: If he never communicated that he would have accepted $50,000, can you prevail? [00:10:40] Speaker 00: Yeah, I believe we can because I think we agree that once suits file, the duty of the insurance company or the adjuster is a fiduciary duty. And so that duty, again, when you've got such small amount of money that you're willing, that you can work with, we think that the fiduciary duty dictates that you be more proactive in trying to get the case resolved. Don't just sit back on your heels. Be active with the plaintiff's attorney. It looks, and I'd like to reserve two minutes for rebuttal if I could, but the approach taken by the prime adjuster looks like a check the box approach. [00:11:20] Speaker 00: And we think it requires more. Dr. Dodds testified continually that she didn't understand really what was going on. And I'd like to reserve my time. Thank you. [00:11:30] Speaker 03: You may. [00:11:31] Speaker 03: Let's hear from Mr. Trumbo. [00:11:33] Speaker 04: Your Honors, may it please the court, a couple of reactions to what was just argued today. First, I think they're saying that Judge Shelby ruled that he can't for any reason even consider what was done before the filing of the lawsuit. [00:11:57] Speaker 04: I don't think that's right. So he did, for example, note that CLJ must have known or had notice of its limits and of the depleting nature of the policy in part because of what happened back in 2008 when they were receiving information The reason why this doesn't help knowledge about the negotiations prior to the lawsuit, the reason it doesn't help CLJ's argument is because Prime on the day after the lawsuit was filed, once we're looking at, okay, is Prime going to commit some act of bad faith now? [00:12:37] Speaker 04: From day one, they tendered their full limits in part because they know the information that was just argued that they were given. [00:12:49] Speaker 04: Another point, the argument was made that in April of 2013, that Mr. Savage at that point believed that the limits were 100,000. [00:13:03] Speaker 04: there's nothing in the record to say that he knew what the limits were. He had just a few days prior in a letter asked, what are the different policies? What are the limits? And it's in response to that April, 2013 email that Prime tells him what the limits are. [00:13:25] Speaker 04: So this idea that he had even in his own mind when he said, I think you should tender a figure, I don't think that's accurate. He must have, I mean, presumably been thinking in terms of millions, not tens of thousands in settling a wrongful death case. And so the idea that that he had something in his own mind that could have been accepted. I don't think there's any support for that in the record. [00:13:56] Speaker 01: Mr. Trumbo, could I ask you a question about the exchange in April of 2013? Could a reasonable fact finder infer that irrespective of whether this was a definitive offer on Mr. Savage's part, Mr. McBride was in fact at that pre-suit vantage point representing both Dr. Dodd, CLJ, as well as Prime. And he does get a communication from the claimant's attorney. [00:14:34] Speaker 01: Why is it in at least a reasonable inference of bad faith that Mr. McBride didn't turn around and call Dr. Dimes and say, you know, we might be able to get rid of this thing, you know, early, you know, he, you know, he, he didn't make a definitive offer, but he said, you know, we think he, he thinks we ought to make a, you know, a, a quick two within two weeks offer. And, uh, you know, Dr. Dodds, why not do that? [00:15:05] Speaker 01: And she might have had this narrow window, as you know, from being an experienced litigator, that, you know, many cases do have a particular window where settlement is more conducive than it is later in the litigation, before there's a medical examiner's report and the like, a lot of uncertainties that are going to be no longer uncertainties after a short while. Why isn't it bad faith not to have communicated to Dr. Dodds about that introductory salvo from Mr. Savage? [00:15:37] Speaker 04: So I think the response to that email shows how Prime had understood the email. So Mr. Savage says, I'm about to talk to the medical examiner presumably to try to confirm his theories of what happened. And he asked for more information about potential nurses or other people involved. So Mr. Savage is doing his investigation. [00:16:07] Speaker 04: And so Prime responds back, answering everything, all the information it had at the time and saying, hey, based on what you hear from the medical examiner, please forward to us the report, let us know, and continues the conversation and says, by the way, I'm hearing something from Dr. Dodds that would be interesting in terms of potential cause of death here, because he was hearing from Dr. Dodds that there's a bad batch of propofol that got recalled shortly thereafter. [00:16:41] Speaker 04: And so he's engaging immediately, and he doesn't receive any response back from Mr. Savage saying, no, no, no, I don't want to wait for a report. I want you to tender your limits. He doesn't get any indication that there's a disagreement with this approach. And so under these facts, especially when the cause of death is unknown, there are Dr. Dodds is saying that she did not commit malpractice and that she wanted to see the report. [00:17:14] Speaker 04: And especially since ultimately the report says that it's a natural death, I don't think a reasonable jury could infer that at that moment there was a duty to understand this as an offer and to immediately offer a number that that the other side hasn't even indicated they would accept. [00:17:40] Speaker 04: But discussing 2013 does make me want to emphasize that the mandate rule is an important aspect of this case. [00:17:51] Speaker 04: We don't need application of the mandate rule to win this appeal, but it does move the case forward and narrow the focus on things that haven't already been litigated previously. [00:18:00] Speaker 01: So let me make sure that I understand both of the things you said about the mandate rule, coupled with what you said earlier. So you're not disputing that Ms. Pinckney can rely on really all of the information from April until, or February until August of 2013. [00:18:25] Speaker 01: All you're saying is that she can't predicate a bad faith claim solely on the refusal to make a $50,000 offer within a couple of weeks or soon after Mr. Savage's email in February. Is that correct? [00:18:44] Speaker 04: Yes-ish. So they haven't presented yet a scenario where they're trying to prove a viable cause of action, and the pre-lawsuit discussions are a relevant fact. So at trial, if there were a viable cause of action moving forward for post-trial, lawsuit conduct, it's conceivable that they could bring up pre-lawsuit discussions, though it's also very conceivable that the court could rule that out as not sufficiently relevant. [00:19:19] Speaker 01: Well, I mean, but you're not only making it relevant, you're highlighting it. You know, for example, you've argued back in 2008 that when the policy was transmitted, that there was an explanatory email specifically telling Dr. Dodds that this is a wasting policy and that the expenses are going to come off of the $50,000. And so that's what I'm trying to get a handle on is a large part of your argument is things that happened far before August of 2013, in fact, as early as 2008. [00:19:59] Speaker 01: And I thought I heard you say earlier that you're not arguing that pre-August 2013 information isn't admissible. And that's what I'm trying to get a handle on is what exactly is the takeaway from your argument? [00:20:16] Speaker 04: That's right. The point I'm making is the specific email information with a request to tender, that very well may be completely irrelevant to what gets argued if the case were to move forward. But you're right that I don't think Judge Shelby suggested that there's no fact pre-lawsuit that can be relevant or considered. The point he was making is he was being asked to determine whether there is a viable bad faith claim to move forward And you have to rely on alleged misconduct that happened after the lawsuit was filed if it's going to be a tort bad faith, which is what got remanded back under the mandate rule. [00:21:03] Speaker 04: So the short answer is yes, you're right. That's what our argument is. [00:21:08] Speaker 02: So are you saying that the pre-August 22 evidence may be admissible as relevant background? [00:21:24] Speaker 04: It could be. [00:21:26] Speaker 04: Right, that really hasn't come to a head, but it could be potentially admissible as relevant background of, for example, the day of the filing of the lawsuit. What did Prime know about the claim at that time? [00:21:43] Speaker 04: What did CLJ know about the claim at that time? That's relevant. That's certainly relevant. [00:21:49] Speaker 04: And so you would have to be talking about, okay, they did receive information about the claim prior to the lawsuit because that speaks to, okay, at that point in time, what should Prime be doing? Again, the reason that it doesn't help them in this case is because Prime immediately tenders the full limits. So this isn't a case where- [00:22:11] Speaker 02: If there is no evidence pre-August 22 that actually supports the claim of bad faith settlement, then that's the end of the game according to you, correct? [00:22:36] Speaker 02: What I'm getting at is what evidence is there that's in the record that occurred before August 22 that would support a claim for bad faith in the process of settlement. [00:22:53] Speaker 04: Yeah, so the only thing that the other side has pointed to is this email in April of 2013 of you should tender your limits for a limited release. What limited release means, they don't explain. Even in the briefing in this case, they didn't explain or they don't explain what limited release means or how that could be viewed as an understood term of art. They haven't supported that with any authority. [00:23:22] Speaker 02: If that female comes into evidence, notwithstanding your argument, if we deem that it's appropriate that it did come into evidence, then is there a genuine issue of material fact? [00:23:36] Speaker 04: There's not. We do address for both duty, breach, and causation. We address why that email is insufficient to have a viable cause of action. But again, I emphasize that this court's first decision in this case precludes that email from being valid. uh the basis for a finding of uh that there was a wrongful act and and an act of bad faith because this court remanded only a tort bad faith and it explained in its decision that uh that it was applying black it applied black it explained that under utah law anything before the lawsuit is contract anything after the lawsuit is tort And then the court held CLJ to its briefing and said, CLJ is only asserting a bad faith on this appeal based in tort. [00:24:39] Speaker 04: And it said, therefore, we're only going to consider this under a tort theory. [00:24:44] Speaker 04: That in and of itself, if you put two and two together, that means that this court was only considering for remand. under Black, a theory of things that happened after the lawsuit was filed, acts of quote unquote bad faith after the lawsuit was filed. But as icing on the cake, the court then proceeded to list the theories of liability that CLJ was relying on on appeal. And conspicuously missing from that list is the only theory of liability that predates the filing of the lawsuit, which was this alleged missed opportunity in April of 2013 based on this request for a tender. [00:25:34] Speaker 02: On that theory, if your theory is appropriate, then there still leaves the proposition that there's wiggle room under that specific a phrase, I think it's an apposition, in black, correct? [00:25:54] Speaker 04: Okay, so you're referring, I believe, to the without more language in Black. Yes, yes. I do want to make crystal clear what that means, because the reply from CLJ actually points out that that language is borrowed from Beck, the prior decision. And in fact, a lot of the key analysis in Black is responding to the language in Beck and trying to explain why Black is consistent with Beck. Beck has a footnote explaining what it meant by without more. [00:26:25] Speaker 04: And it says that, look, even though you're going to be filing your bad faith claim as a contract claim under Beck, it doesn't mean that you can't have other tort claims that are independent from your bad faith claim and they list for example if the insurer excuse me can I finish my thought uh my time please complete your response to Judge Murphy's question so the um if the insurer's conduct is both bad faith and fraud then you could have an independent cause of action for fraud and there's nothing in back or black that prevents that or if it's also an intentional affliction of emotional distress, or if it's also a violation of a statute, those are the three examples that gives, then you can have additional causes of action in tort in addition to your contract claim for bad faith. [00:27:23] Speaker 04: So that's what the without more meant. And that's not applicable in this case. [00:27:26] Speaker 02: So you're saying that the three examples, fraud, emotional distress, and I can't remember the other, are the only things that are included in more. [00:27:38] Speaker 04: No, no, no. [00:27:40] Speaker 02: The word more. [00:27:44] Speaker 04: No, that's not true. There's subsequent cases that have even talked about misrepresentation as an independent tort. The point is that if your conduct is bad faith and you have a claim of bad faith or breach of the implied covenant of good faith, then under black if it's pre-lawsuit that has to be a contract claim but what it's saying is that if if the insurer's conduct also breaches some independent duty that's not arising from the contract nothing in black prevents you from filing that even if it's a tort claim So the three examples that were given in Beck were fraud and an intentional affliction or a statutory claim. [00:28:32] Speaker 04: But that's not an exclusive list. It just has to be independent from. The problem here is that they're wanting to disagree with Black. They're saying that the claim mishandling, that it should morph into a tort claim. And that's not what the court meant by the without morph. [00:28:53] Speaker 03: Right Council, thank you very much. Thank you. [00:29:00] Speaker 03: We have some rebuttal time. Amy, would you add two more minutes to Ms. Pinckney's rebuttal? [00:29:09] Speaker 03: You're muted. [00:29:14] Speaker 03: Ms. Pinckney, you're on mute. [00:29:20] Speaker 00: I apologize, Your Honor. [00:29:23] Speaker 00: Mr. Trumbo mentioned that at the time in the pre-suit settlement demand in April of 2013 that we didn't know what the limits could be $100,000. I think he's correct in that. I didn't mean to be misleading. [00:29:39] Speaker 00: We first learned or the plaintiff's counsel first learned that $100,000 were the potential limit when we made the cotton demand in April of 2014. So he was correct in that statement. [00:29:56] Speaker 00: And I think what... Ms. [00:29:57] Speaker 01: Binkney, can I stop and ask you a question? I don't want you to lose your train of thought. From February 2013 to April in 2014, I know Dr. Dodds testified and you've argued that she was confused about the policy limit. Did she ever indicate to prime between those periods and April 2014 and February 2013 that she thought that the policy limit was $100,000? [00:30:27] Speaker 00: I don't recall her testimony directly on that point. I think she expressed to her insurance defense counsel when the cotton demand or the April of 2014 demand was made. She testified about a conversation she had with her insurance defense counsel about what are the limits, what's available, and the insurance defense counsel replied that she didn't know. [00:30:50] Speaker 01: Okay, but you're not arguing that from February 2013 to April in 2014, that there was bad faith on the part of Prime for failing to explain to her what the policy clearly said, and that is that the policy limit per occurrence was $50,000. She was confused, you've certainly argued, but there's no bad faith in that 14-month period for failure to clarify her confusion because they didn't know it, right? [00:31:20] Speaker 00: Right. I mean, I think in answering your question, I think that's a fact question because it's clear she didn't understand what was going on. [00:31:28] Speaker 01: I mean, you might be or I might be confused about something in the case. But unless I tell you that I'm confused, how would you know that I'm confused about it? So how would Prime have known that she was confused about the policy limit if she never told him? [00:31:41] Speaker 00: Right. [00:31:43] Speaker 00: I understand your point. I think that would be a jury question because there's just so much going on about the reasonableness of the communications, because at one point, Dr. Dodds testified that she thought that the $50,000 limits was she had $50,000 available to indemnify her and an additional $50,000 to defend the claim. [00:32:03] Speaker 00: OK. And I think. [00:32:08] Speaker 00: it's important to note that what Prime learned pre-suit was that this was horrific allegation of malpractice, that there was a police report associated with it. So it's not like we're just waiting for the ME's report. What they knew was, and I won't go through the details, but what they knew through the documents provided by plaintiff's counsel was that this was a horrific incident that resulted in a death. [00:32:34] Speaker 00: And it might be important to point out that the prime tendered its limits before the ME report ever came out. So they initially in the correspondence, they were discussing, let's wait for the ME report, but they actually tendered the limits before they received that report. [00:32:50] Speaker 01: Would it have been unreasonable for them to have waited until September when the medical examiner's report had come out? [00:32:58] Speaker 00: I think that would be a jury question. We would say it would be unreasonable based on the facts that were described in the police report. [00:33:07] Speaker 01: Let me, I hate to take up your rebuttal time, but I do want to ask a question and I'll be honest with you, it's important to me. So with a complaint that Mr. Jenkins filed in August of 2013, He includes Dr. Grieco's declaration. And even Dr. Grieco, who was supporting Mr. Jenkins, says on paragraph nine, although I suspicion that this injury directly contributed to her death, I wish to read the final autopsy report before giving an opinion of the cause of Mr. Jenkins' death. [00:33:44] Speaker 01: And that's exactly what Mr. McBride told Mr. Savage when he received the February 2013 email that he wanted, depending on what the medical examiner's report shows. And the medical examiner's report shows, as Mr. Trumbo said, that it was a natural cause of death based on a pulmonary embolism. And Dr. Dodds testified in her deposition that she had told Prime that she thought that that medical examiner's report exonerated her. And so, you know, the reliance on, you know, crime's unwillingness to realize this is a slam dunk on liability seems a little far-fetched in light of Mr. Jenkins' own declaration that he attached to his complaint. [00:34:32] Speaker 01: I wanted to get your take on that. [00:34:35] Speaker 00: Sure. I think, again, that the facts are horrific. The patient woke up during the procedure and was screaming. And to make her stop screaming, they put a rag in her mouth. So even if it's not a death case, there's still a personal injury case there. And again, Prime offered its limits without receiving the ME report. So the fact that they are claiming it's so critical is belied by their conduct when they received it. I mean, by tendering their limits before they received it. [00:35:06] Speaker 00: I believe that my time is concluded and I thank you. [00:35:10] Speaker 03: Thank you very much. We appreciate the arguments, counsel. You're both excused and the court will be in recess till further notice. [00:35:17] Speaker 03: Thank you. [00:35:17] Speaker 00: Thank you.