Over three years ago, my clients, Stoller Group, Inc. and its subsidiaries, settled their claims against AIG in the above-entitled lawsuit, which lawsuit AIG had initiated in the Houston Division of the Southern District of Texas as Case No. 4:16-cv-00026. That litigation spawned yet another case that recently settled as well freeing me to reflect upon some of the lessons learned from the AIG case.
Insurance Company Brain.
When I explain to policyholders why it is important to be represented in insurance coverage disputes by a policyholder advocate, I often talk about the danger that an attorney who has represented insurance companies will have developed “insurance company brain.” Insurance company brain is a debilitating condition where the attorney has become so attuned to viewing an insurance policy through the lens of what the insurance company would say it means that the attorney cannot even conceive of reasonable alternative interpretations. Under Texas law, an insurance policy susceptible of more than one reasonable interpretation must be resolved by adopting the construction that most favors the insured, even if the construction urged by the insurance company appears to be more reasonable or a more accurate reflection of the parties’ intent. So, being able to break free from an insurance company’s pre-conceptions of what certain policy language means is indispensable to a successful policyholder advocate.
Take the phrase “policy period.” To an attorney with insurance company brain, the idea that the phrase “policy period” could mean anything other than the period from the inception date of the policy to the expiration date of the policy is inconceivable. That was exactly AIG position when it sought to invoke an exclusion for:
- Personal and advertising injury arising out of oral or written publication of material whose first publication took place before the beginning of the policy period.
However, “policy period” more appropriately refers to the period of time for which coverage is afforded under a policy, that is, the period during which an action or event must take place for coverage to be afforded under a policy. As the personal and advertising injury coverage, at issue, had a retroactive date, “beginning of the policy period,” at least in that context, could reasonably refer to the retroactive date. In the end, the district court in the AIG case agreed.
In reaching that conclusion, the district court rejected the recommendation of a magistrate judge, who reached the opposite conclusion. This highlights yet a second danger. The magistrate judge’s unpublished opinion can be found on caselaw databases such as Westlaw. The district court’s decision, which was rendered from the bench following a hearing on Stoller’s objections, cannot. In fact, there’s no mention of the district court’s decision even in the history for the magistrate judge’s opinion. No wonder district courts and magistrate judges take citations to unpublished opinions in briefs with more than a little grain of salt. Keep that in mind if someone advises you that you do not have a case based on an unpublished opinion in another proceeding.