Over the years, we frequently have prospective clients ask us the same general questions about us and their legal matter. This section is therefore designed to provide you with very basic answers to some of those questions.
Please understand that the information provided below is for informational purposes only. The information in this section is not legal advice nor should it substitute for legal advice. Nor does the information serve as statements of law. Please do not act upon any information below without first seeking professional counsel. The answers are all based on California law only, and the answers may vary by jurisdiction.
- Why should I hire an attorney?
- Why should I hire PL?
- What factors should I consider when hiring an attorney?
- How do I know if an attorney's fee is fair?
- What is a "Statute of Limitation"?
- What is a contingency fee?
- What are "pre-paid" legal services?
- What if I have a dispute with my attorney over fees?
- Is what I communicate to my attorney confidential?
- Is my attorney required to advise me of any settlement offer made in my case? If so, who has the authority to settle my case?
- Will I be required to work on my own legal matter?
- What are the basic stages of litigation?
- What is arbitration?
- What is mediation?
- Will I be kept informed about the status of my legal matter?
- Is there a State agency that governs attorneys?
- How does the firm bill me?
Insurance Law Information Center:
- Generally speaking, what should I do when my insurance company has denied my claim, or rescinded or cancelled my policy?
- What does "insurance bad faith" mean?
- What does the "duty to defend" mean?
- When does my insurance company have a duty to provide independent counsel?
- When does my insurance company have a duty to settle a lawsuit?
- When does my insurance company have a duty to pay a judgment (even if it is more than the policy limits in some cases)?
- How important is the insurance application?
- What types of claims can I make against an insurance company, and what are the types of damages I can recover?
- What if someone, such as a spouse, agent or a broker, fills out my application for me?
- Should I apply for an insurance policy over the internet?
- What does it mean when an insurance policy is "rescinded"?
- Under what circumstances can an insurance company rescind my policy?
- What does it mean when an insurance policy is "cancelled"?
- At what stage should I involve an attorney when my insurance company has denied my claim or rescinded my policy?
- Should I file a complaint with a state agency such as the Department of Insurance or the Department of Managed Care whenever I have a dispute with an insurance company?
Employment Law Information Center:
- Am I an "at-will" employee?
- What does "at-will" employment mean?
- What should I do if my employer terminates my employment?
General Information Center
This is a very common question. We believe every prospective client should ask this question of each attorney they are considering and every good attorney should be able to provide a meaningful response.
The bottom line like anything else: you get what you pay for. Many times consumers spend very little time making large purchases regardless of the financial cost. But when it comes to protecting their personal or company's legal interests they sometimes question whether an attorney is really necessary. The primary reason for this is that clients sometimes ignore, or simply do not see, the immediate benefit of hiring an attorney until it is too late.
The benefits to hiring a qualified attorney are innumerable. An attorney is an advocate who gives a voice to those who may not otherwise be heard. An attorney is skilled at marshaling the relevant facts for a persuasive presentation. An attorney can serve as a skilled advocate by committing words to paper to persuade a particular reader or reflect the parties' intent should their intent become an issue in the future. An attorney can serve as an oral advocate and compose words to instill emotion in a jury, persuade a trier of fact, or communicate a particular tone. An attorney can ensure each individual has equal access to the court system. An attorney can look forward and then take action based on what his or her experience tells them in order to try and avoid problems in the future. An attorney speaks for society's downtrodden. An attorney can expose a weakness in the law and effect legislative change.
Perhaps most importantly, the right attorney has a significant amount of experience dealing with the particular issues in question, and knows not only what can be learned in the law books, but also the unwritten expectations, the "tricks of the trade," so to speak. An experienced attorney can often divine other's motivations, or predict other's next moves, based on having dealt with similar issues before. In much the same way you would not try to treat a medical condition without the guidance of a doctor, using a lawyer will give you a resource that often leads to far better results.
There are additional specific benefits for our contingency clients. The client can engage our firm to step in and immediately begin zealously advocating the client's position without the client having to pay attorneys fees out of their own pocket. For our clients in the insurance or employment context this means the client has attorneys who are comfortable with the David vs. Goliath dynamic of litigation and will stand up against large corporations so the consumer does not have to go at it alone.
Under a contingency fee arrangement the attorney is invested in the client's case based on the amount of hours it will take to prosecute a case and the expenses the attorney will be advancing out of his or her own pocket. Thus, the attorney is just as motivated as the client to maximize the client's recovery, but in any event should at all times do what is in the best interests of the client.
For our hourly clients, the benefits are innumerable. The client gets an experienced attorney whose experience and knowledge of the law can assist the client in making important personal and/or business decisions, and provide the client with options he or she may not otherwise have without legal assistance.
In the civil context, the bottom line for a plaintiff is to recover money and the bottom line for a defendant is to avoid paying any money, or as little as possible. Thus, when someone is sued, that person's or company's assets are on the line until the lawsuit is resolved. That is why it is very important to have an attorney who can navigate the client through the court system and apply his or her experience to the situation at hand.
To further answer this question, we will use three common scenarios.
A common scenario is a client who wants to perform what they consider a simple task, e.g., filing an insurance claim, communicating with an insurance company after a claim is denied, filing an employment claim with a state agency, forming a company, drafting a contract, negotiating a purchase or sale, or even defending a small lawsuit.
In the words of William Shakespeare, "and yet, methinks, I could be well content to be mine own attorney in this case." (1 Henry VI (V, iii, 165).) There are many people who think they can adequately represent their own interests when it comes to legal work.
There is no question a prospective client can search the internet or purchase a book at the bookstore that purports to provide basic legal information or advice. Of course, any prospective client can engage in self-help such as drafting their own contracts or prosecuting or defending their own lawsuit. Those kinds of persons normally find themselves seeking out legal help when it is too late, which more often than not could have been avoided had they sought an attorney's advice in advance.
There is no one-size-fits-all approach to the practice law. Therefore, it is not wise for consumers to copy contracts, or even wills or trusts, from the internet or a book thinking it will protect their interests. Many times, a consumer can commit a major blunder if they do not realize the legal significance of a particular document, act, or omissions. It is therefore wise to seek out legal help from a qualified professional attorney.
Good attorneys earn their fees by zealously protecting a client's interests and serving as an aggressive advocate for a client's particular position. This could mean avoiding a lawsuit before one is filed, aggressively prosecuting or defending a lawsuit when filed, drafting documents today to protect against what may occur in the future, or effectively negotiating a certain point.
There are many important factors a person can consider before hiring an attorney to handle their personal or business legal matter. Here are some of them:
- You should always ask questions. A good lawyer will not be intimidated by direct questions and he or she won't mind answering them.
- Does the attorney have experience in the type of legal areas in which you need representation? A good attorney is confident in the areas in which they practice. At the same time, that attorney should also know the limits of his or her abilities and experience, and if they do not accept your matter, the attorney should be willing to help you seek counsel that will suit your particular needs. For a detailed look at the types of cases our firm handles, please click here.
- Is the attorney able to devote the time and resources necessary to zealously represent your interests?
- Is the attorney a good strategist? Does the attorney conceive, develop, and execute a litigation or transactional strategy that will best advance your interests?
- Is the attorney proactive versus reactive? Does the attorney take a proactive approach to the practice of law, or simply react to the opposition's moves? For a look at our firm's philosophy, please click here.
- How does the attorney feel about winning? Winning can mean a lot of different things in a lot of different contexts. However, an experienced attorney will understand the client is looking for someone to zealously represent their interests at every turn.
- Is the attorney cognizant at all times of his or her ethical obligations?
- Is the attorney willing and capable of trying a case in the event a legal dispute goes to trial?
- Is the attorney capable of handling an appeal in your legal matter, if necessary?
- Is the attorney a good negotiator?
- Are you comfortable around the attorney? An attorney-client relationship is a professional relationship. You may be called to work with your attorney closely in many aspects of your legal matter. It is therefore important that you feel comfortable interacting with him or her.
- Does the attorney take time to explain things to you and to answer your questions?
- Is the attorney able to provide answers in clear and understandable terms?
- Does the attorney return your phone calls or e-mails within a reasonable time period?
- Does the attorney listen to what you have to say?
- Do not feel intimidated by the attorney you are considering. You should never allow a lawyer to strong-arm you into choosing their firm. The lawyer's professionalism and experience should speak for itself.
The answer to this question can be found in California Rules of Professional Conduct rule 4-200. That rule states:
"(A) A member shall not enter into an agreement for, charge, or collect an illegal or unconscionable fee.
(B) Unconscionability of a fee shall be determined on the basis of all the facts and circumstances existing at the time the agreement is entered into except where the parties contemplate that the fee will be affected by later events. Among the factors to be considered, where appropriate, in determining the conscionability of a fee are the following: (1) The amount of the fee in proportion to the value of the services performed; (2) The relative sophistication of the member and the client; (3) The novelty and difficulty of the questions involved and the skill requisite to perform the legal service properly; (4) The likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the member; (5) The amount involved and the results obtained; (6) The time limitations imposed by the client or by the circumstances; (7) The nature and length of the professional relationship with the client; (8) The experience, reputation, and ability of the member or members performing the services; (9) Whether the fee is fixed or contingent; (10) The time and labor required; (11) The informed consent of the client to the fee."
Our firm's hourly rates are based on the attorneys' years of experience, efficiency of work, and overall effectiveness. The rates may be revised by the firm annually based on generally understood prevailing rates in the Los Angeles/Orange County legal community.
Our firm's standard contingency fee is 40% of the client's gross recovery, and the client pays the costs our firm has advanced out of his or her remaining portion of the recovery.
The principal of PL, Neil Pedersen, has developed a business plan that avoids the accumulation of unnecessary overhead and operating expenses that would otherwise require the firm to charge higher hourly rates similar to what the larger firms charge.
A statute of limitation is a statute that sets the time limit within which you must file your claim in court. If you do not file your claim within the statutory time limit then you are forever barred from bringing the claim. This is why it is important you seek legal advice early on so you do not miss the particular statute of limitation that applies to your matter.
This is one type of a fee arrangement our firm offers. Under our standard contingency fee arrangement, we agree to represent the client in exchange for the client's agreement to pay us a percentage (normally 40%) of the client's gross recovery. Our firm advances all costs on the client's behalf, and those costs are then re-paid out of the client's portion of the gross recovery. We do not get paid our attorneys fees unless and until there is a recovery. To give you an example of how this standard fee arrangement works, assume the client's matter settles for $100,000 and the client's costs are $3,000. Under our standard contingency fee agreement, we recover 40% of the $100,000, which is $40,000. The remaining $60,000 is the client's portion, and from that the client then pays the $3,000 in advanced costs, leaving the client with a net recovery of $57,000.
Pre-paid legal services are a fairly recent trend in the legal setting. A pre-paid legal services plan is where a consumer agrees to pay a monthly fee in exchange for the right to contact an attorney for very basic, limited legal advice. That attorney then agrees to provide that consumer with a very limited amount of legal advice or services, which normally has time and workload restrictions. We do not offer pre-paid legal services. We believe legal services should be specifically tailored to fit each individual's need, and we believe that there is no one-size-fits-all approach to the practice of law. An experienced lawyer develops and applies a unique strategy to a client's needs on a case-by-case basis. Conversely an experienced lawyer does not offer a general strategy, legal service, or product that is generically designed to fit a large group of individuals.
The State Bar of California provides a process by which all fee disputes between an attorney and her client can be handled, known as Mandatory Fee Arbitration. This is a low cost alternative dispute resolution forum for resolving fee disputes between the attorney and the client. Our firm's engagement letter contains a mandatory fee arbitration provision.
With very limited exceptions, yes. An attorney has a legal duty to maintain inviolate the confidentiality of all confidential information relating to the representation of a client. The exceptions to this rule are: (i) to prevent a criminal act that the attorney reasonably believes is likely to result in death or, or substantial bodily harm, to another; and (ii) the client gives his or her consent to divulge the information. Otherwise, confidential information you tell your attorney cannot be divulged.
As the client, you are the holder of the attorney-client privilege, and therefore you are the only person who can waive that privilege.
Yes, an attorney is required to promptly communicate the amount, terms, and conditions of any written offer of settlement to his or her client.
Unless otherwise agreed, the client is the only person with the authority to accept or reject a settlement offer. When communicating a settlement offer, an experienced attorney should give the client realistic advantages and disadvantages of accepting the offer so that the client can make an informed decision. The ultimate decision to settle lies exclusively with the client.
At our firm, yes. A client can be involved in many aspects of his or her legal matter. At the outset, it may mean gathering documents and information to allow the attorney to evaluate the client's legal matter before agreeing to take the case. Once the attorney agrees to accept a matter, the stage of litigation the client is most often involved in relates to the discovery process. We require that a client participate in answering written discovery, to the extent necessary. This may mean answering written questions and gathering relevant documents, or even performing very basic investigations. The client will also be required to appear at deposition. Many times clients can offer valuable insight into the type of discovery that he or she should conduct in the litigation.
Requiring that the client participate in the litigation process does many things. It ensures that the discovery is accurate and complete, which is critical since the client is required to answer the discovery under the penalty of perjury. It allows the client to actually participate in the overall process and have a stake in his or her own legal matter. Finally, it allows the client to keep abreast of the status of the case and the factual and legal strategies the attorney is employing on their behalf.
Each litigation is different, and it can take on many different forms and go through many different stages. If you are interested in the various states of litigation, please see What to Expect if You Are Involved in a Lawsuit.
The experienced litigators at PL handle every aspect of the litigation from intake all the way through appeal, if necessary. This means our clients are not required to engage a different attorney to handle different aspects of their case.
Arbitration is an alternative forum for resolving a dispute whereby the parties either voluntarily, or are required by statute, to submit the dispute to an impartial third party for resolution instead of by a judicial tribunal such as a judge or a jury. Arbitration is required under two different circumstances:
- A party can contractually agree in advance to resolve a particular dispute by arbitration, i.e., contractual arbitration; or
- A party can be statutorily required to arbitrate his or her claim, i.e., judicial arbitration.
Arbitration can be binding or non-binding. Binding arbitration means the arbitrator's decision is final, except for a very limited, narrow set of exceptions. That means the client normally does not have the opportunity for a reviewing court to take a second look at the arbitrator's decision. Non-binding arbitration means the arbitrator's decision is not final, and the plaintiff can proceed to a court of law to have his or her claims heard before a judge or a jury.
The most common type of arbitration is binding contractual arbitration. In that instance, the contract governing the parties' relationships will contain some form of an arbitration clause. Many businesses offering consumer services, such as many medical insurance companies, require that the consumer agree to binding arbitration in advance. The arbitration agreement can be formed at virtually any stage of the relationship, e.g., when an insured signs an insurance application, when an employee signs an employment agreement or handbook, when the consumer purchases a car, or when a consumer is issued a credit card or opens a bank account. Large corporations offering a service such as insurance have superior bargaining strength, and can easily force a consumer to agree to arbitration. Unfortunately, consumers rarely pay attention to the fine print, and do not realize they may have walked away from their constitutional right to a jury trial until a problem arises.
Some practitioners believe arbitration benefits only the defendant, and enables the defendant to remain shielded from large jury verdicts, and even public scrutiny. The main reason insurers require arbitration is to protect against a large jury verdict and a punitive damages award when their egregious or unlawful conduct is exposed. Since arbitration means a third party arbitrator (as opposed to a jury of your peers) will hear and decide your case there is a greater likelihood the arbitrator will not be as sympathetic towards you as would a jury. Also, an arbitrator very rarely awards punitive damages. Hence, large defendants who engage in unlawful conduct are typically the ones who benefit from arbitration. Arbitration can also make litigation more expensive since the parties are not only paying administrative fees, but also an arbitrator's hourly rate, all of which are in addition to the parties' attorneys fees. Often, a litigant's discovery rights in arbitration are limited. Finally, many arbitrators earn significant arbitration fees from large corporate defendants who require that one particular arbitration company handle all arbitrations, which may have an effect on the impartiality of the overall process.
Some practitioners believe there are some advantages to arbitration. Arbitration can be more streamlined so that the parties can reach an arbitration hearing much quicker than they can reach a trial. Some practitioners believe that arbitration is a more cost-effective way of handling a dispute due to the streamlined approach. From a defendant's perspective, punitive damages are very rarely awarded and arbitrators tend not to be as sympathetic towards a plaintiff as would a jury. In some cases, an arbitration provision may even serve as a deterrent to a plaintiff taking any action in the first instance.
Mediation is much different than arbitration. Mediation is a process by which the parties choose a trained neutral to facilitate settlement negotiations between the parties. A mediator can be an attorney or a retired judge with experience in the particular area of law. Normally, the parties are placed into separate rooms and the mediator floats between the parties as he or she conducts separate "caucuses" to try and understand the dispute and find a resolution acceptable to both sides.
There is no such thing as "binding" or "non-binding" mediation. This means mediation is generally a voluntary process. If the mediation is unsuccessful, the parties continue to litigate. Sometimes a contract may require a party to first mediate his or her dispute before filing a lawsuit, which is common in standard real estate purchase contracts.
Our firm believes that mediation is a useful tool when the parties reach a point where the old-fashioned way of settling a matter (i.e., letter writing or verbal discussions between counsel) breaks down and the parties are unable or unwilling to move any further. At that point, it sometimes makes good business sense to have a trained mediator try and bring the parties closer together to reach some sort of a resolution. Normally, the parties split the cost of a mediator.
At our firm, yes. As the client, you are always entitled to know the status of your legal matter. You should feel comfortable asking questions at any stage of the litigation, and your attorney should provide substantive answers. You should not feel uncomfortable calling your attorney to inquire about the status of your legal matter.
At our firm, we go one step beyond and do something most firms do not. We copy our clients with every single pleading, motion, letter, or document that we send or receive relating to your legal matter. Normally we mail the documents to the client at the client's expense. For those clients who are technically savvy, we scan and e-mail the client .pdf versions of those documents to avoid the client having to pay the postage cost. This way the client can read whatever documents they wish to stay abreast of their own legal matter.
Yes, the State Bar of California. The State Bar is the regulatory agency for California attorneys in charge of admissions and discipline. It regulates attorneys and assists in providing rules and standards for ethics, such as the Rules of Professional Conduct, which attorneys are required to follow. It also helps consumers find legal assistance, learn about the law and the legal system in California, or work better with an attorney. Their website is www.calbar.ca.gov.
The answer to this question depends on whether the matter is taken on a contingency or hourly basis. Under a contingency fee agreement, we do not provide the client invoices unless they request a copy. When a case settles or the judgment is paid, we provide the client with a complete accounting of the money payout, including the costs advanced on behalf of the client. As the client, you are always welcome to request a copy of your invoice at any time.
When we accept a matter on an hourly basis, we invoice the client every 30 days and payment is due within 15 days from the date appearing on the invoice. The invoice contains detailed information such as the particular tasks performed on the matter, the time spent performing those tasks, the attorney who performed the particular task and their hourly rate, the costs incurred on the matter, and the total amount due. At our discretion, we can require that the client provide a deposit that must be refreshed when the dollar amount drops below a certain benchmark.
Insurance Law Information Center
First, you should not panic. Many policyholders panic and instantly begin communicating or fighting with the insurance company to try and convince the insurer it is wrong and to reverse its decision. Very rarely is a consumer successful at overturning an insurer's decision without the help of an attorney. Also, consumers sometimes turn to various state agencies for assistance and submit complaints. While some state agencies are designed to protect the consumers of this state, they unfortunately are unable to give your legal matter the attention it deserves and cannot offer you legal advice about your specific case.
Second, you should ask the insurance company to state in writing all of the reasons for denying your claim, or canceling or rescinding your policy. This way, a written record as to the insurance company's position begins early on in the process.
Third, you should read your insurance policy carefully. Most insurance policies contain a mechanism for the insured to challenge the insurer's decision through an internal appeal and grievance process, which can be time sensitive. Most policies place time restrictions on when an insurer must take certain steps to protect his or her rights under the policy. If you do not feel comfortable reading through the policy, you should have qualified insurance counsel do it for you as soon as possible so that you do not miss any contractual deadlines.
Fourth, whether you decide to engage our firm or a different attorney, we recommend that an attorney be involved in the claim process as early as possible. The lawyers in our firm have a combined total of over 26 years experience in litigating insurance issues. We assist the policyholder at every stage of the claim process, including drafting a written response to the claim denial all the way through trial, and appeal if necessary. It is always best to hire qualified counsel early on because more times than not the attorney is able to quickly spot the insurance issues and begin developing ways to resolve them.
Fifth, with the one exception stated below, you should refrain from responding to the claim denial letter with letters of your own without the assistance of qualified insurance counsel. Many times an unsuspecting insured can make harmful statements to the insurer, or fail to communicate critical information that helps support the claim.
Sixth, you should fully cooperate with your insurance company in providing information about your claim and responding to their requests for information. As an insured, you have a legal duty to cooperate with your insurance company while your claim is being considered. As an insured, you never want an insurance company to later argue that you denied the insurance company requested information that would have allowed the insurer to adequately investigate and consider the claim. Cooperating may mean that you undergo an examination under oath, which under many policies is required. By not cooperating you are simply giving the insurance company ammunition to use against you when they deny your claim. You want to be the one who later argues you did everything you were required to do under the terms of the policy, and it was the insurer who shirked their responsibilities.
The term "insurance bad faith" is a moniker coined by courts and lawyers to describe generically an insurance company's conduct legally known as "breach of the implied covenant of good faith and fair dealing." Every contract, including insurance contracts, contains an unwritten legal duty that runs to both parties to the contract that promises to not do anything to unfairly interfere with the other's expectations under the agreement. The term is a bit misleading because it suggests a policyholder must prove "bad faith"something akin to an evil motive on the part of the insurer in order to win at trial. While this is a common theme told to a jury, it is not a requisite element. The insured must prove that the insurer "unreasonably withheld" the policy benefits and not that the insurer acted in "bad faith."
Most liability policies sold contain a provision that places on the insurer the duty to defend its insured against certain lawsuits. Such policies usually include Comprehensive General Liability, Homeowners and Renters, Employer's Liability, Directors and Officers and others. Often, the process of tendering the claim can be confusing or unfamiliar. Although insurers have a duty to look for a reason to provide a defense, often the research and analysis of a competent and known insurance attorney is the only way the insurer can be convinced to pick up the defense of the lawsuit. In complex cases, the identification of, and coordinated tender to, dozens of insurers potentially on the risk requires the unique and substantial experience our firm can provide. When the insurer wrongfully refuses to defend, our firm is uniquely qualified to litigate the issue.
Once an insurer has agreed to defend a lawsuit, issues arise about who gets to control the litigation, including the issue of who gets to pick the attorney to represent the insured in the lawsuit. Although the insurer's duty to surrender control of the litigation to the insured under certain circumstances is set forth in statute and case law, there is nonetheless often a real battle over that issue. Insurers, of course, want their attorneys representing the insured. It is usually in the client's best interest to have attorneys selected by them to defend the lawsuit. This is because attorneys selected by the client will consider all of the client's interests, including the ultimate interest in getting the insurance company to pay for most or all of any liability that might occur. Most panel counsel will not consider your coverage interests, claiming to be "coverage neutral." Who wants an attorney that is neutral about anything related to their lawsuit? Our firm is very good at negotiating this issue, and if necessary, litigating it.
Often in litigation, either after the insurer has rejected the defense of the lawsuit, or has accepted the defense and is paying for counsel to defend, a settlement is determined possible within the policy limits of the insured. Under certain circumstances, the insurer can be compelled (by the threat of future exposure to the entire judgment amount in excess of policy limits) to pay the settlement. Our firm is very familiar with the insurer's duty to settle, and when and how to implicate that duty.
Those same insurance policies that contain a contractual duty to defend also provide for what is known as indemnity coverage; that is, coverage for judgments against the insured. However, often a judgment is not clearly covered, and disputes arise related to whether the insurer is required to pay the judgment, and if so, to what extent. The attorneys at our firm are fully aware of the insurer's duties with regard to payment of judgment, and can be very helpful in this process. Again, as with all of an insurer's obligations, if the insurer wrongfully fails to carry out its obligation to pay some or all of the judgment, coverage litigation and perhaps even bad faith claims can be competently and successfully carried out by the firm.
It is very important. The insurance company will do everything in its power to hold you personally accountable for the information you provide (or don't provide) in an application for insurance. The application asks for certain types of information that the insurer's underwriters will say they considered when determining whether the insurer wants to undertake a particular risk, e.g., insure a house, car or a boat, or provide medical insurance. The insurer argues it relies upon the accuracy and completeness of the information contained in the application when issuing the policy.
If the information in the application is later determined to be inaccurate, incomplete, or false then the insurer may have the right to rescind and/or cancel the policy and the insured can be left facing a claim that the insured may have to pay on their own. Normally, the application states that the insured's signature means the insured attests to the truthfulness, completeness, and accuracy of the information in the application.
Generally speaking, there are two basic claims a policyholder asserts against the insurer: breach of contract and breach of the implied covenant of good faith and fair dealing (i.e., "bad faith."). The former is simply a breach of the terms of the policy. The later is based on a promise implied into every insurance policy issued in this state that the insurer will not do anything to unreasonably deprive the policyholder of the benefits under the policy. Other claims may include fraud, injunctive relief, or a claim for unfair business practices.
In order to recover damages, the insured's first step is to prove the claim(s) is covered under the terms of the policy. If successful, the insured will be entitled to the amount of the policy benefits as part of the insured's general damages. Case law also suggests an insured can recover for emotional distress associated with the breach.
To recover additional damages, the insured must prove the insurer's withholding of benefits was unreasonable. If successful, the insured can recover damages for emotional distress and recover the attorneys fees the insured incurred in pursuing the policy benefits, sometimes referred to as "Brandt fees," named after a California Supreme Court case.
Finally, if an insurer's conduct is found to be fraudulent, malicious, or oppressive by clear and convincing evidence, then a jury may also award punitive damages. In certain instances, an insurance company can also be ordered to refrain from doing something by way of an injunction.
This is a common scenario for many insureds. Many prospective clients tell us that someone other than themselves, such as a spouse or the insurance agent, completed the application for the insured. Another common scenario is someone other than the insured reads the questions on the application aloud and the insured then provides verbal answers based on the questions they heard. To avoid any problems or inaccuracies, you should personally complete and sign the application yourself when possible. You should make sure you understand the question being asked and that you answer truthfully, completely, and accurately to the best of your ability.
Technology combined with the internet has permitted insurance companies and insurance agents and brokers to tap into a new base of potential insureds by advertising and soliciting insureds over the internet. Most large insurance companies allow a potential insured to prepare and submit on-line insurance applications over the internet. Whether the application is prepared while sitting at your kitchen table, in an agent's office, or the public library, you should read and verify that the information provided is complete, accurate, and truthful. An insurance application is not something you should rush through, which we commonly do when "surfing" the internet. It is sometimes too easy to click on links on a webpage to complete an on-line application. Therefore the conventional methods of preparing and submitting an insurance application often times work better. It is much easier to flip through a paper application to re-read questions than it is to review an electronic version. Also, you can take your time to complete a paper application and come back to it when needed before submitting it versus completing the application on the computer in a single sitting.
When an insurance company rescinds your policy it means that the insurer has abrogated or cancelled the entire policy, the effect of which is to place the policyholder and the insurance company in the positions they would have occupied had the policy never been issued. Consequently, the insurance company will not pay any claims made under the policy and the insured will be left without insurance as though he or she never had it in the first instance. When a policy is rescinded the third party (such as medical providers) then turn to the insured for payment of money for services rendered, which in some instances can be hundreds of thousands of dollars.
In California, an insurer rescinds a policy by alleging that the insured has made some sort of a material misrepresentation on his or her insurance application. In order to cause the representation be "material," the insurer claims that it would not have issued the policy or undertaken the particular risk had it known about the information it claims was not disclosed on the application. Insurers argue that the misrepresentation does not necessarily have to be intentional, and instead argue the misrepresentation was even negligent or innocent. There is a large body of insurance law and therefore rescission can be a very complex area of insurance litigation. That is why you need qualified counsel to represent your interests following a rescission.
Cancellation is different than rescission. Cancellation means that the insurer will pay whatever previous claims were made under the policy, but the policy is cancelled prospectively as of a certain date such that no future claims will be paid and the insured will not have any insurance going forward.
Whether you decide to engage our firm or a different counsel, we recommend that an attorney be involved in the claim process as early as possible. Many times an insured who is not trained in insurance law can make factual mistakes that turn into damning admissions in a letter, or leave out critical information that supports the claim or refutes the rescission. Sometimes clients come to us early enough so that we can assist them in reviewing the claim prior to its submission and assist them in drafting claim letters so that the proper information is provided when the claim is considered. This way, if the insurer still denies the claim or stands on its rescission, a strong record of what has occurred has already begun.
Rather than immediately turning to qualified insurance counsel, a policyholder sometimes files a complaint with a state agency such as the California Department of Insurance or the Department of Managed Healthcare with the hopes that their issue will be resolved that way. While state agencies like those are generally designed to protect the consumers of this state as a whole, those agencies are many times unable to give your legal matter the attention it deserves. Nor can those agencies offer you legal advice about your specific case and the specific issues you are facing. A policyholder can also make mistakes that are deemed harmful admissions in written statements to these state agencies.
There is an appropriate time and context for filing complaints with state agencies regulating insurers in this state. It is therefore wise to consult with qualified counsel before making those complaints, or to assist you in doing so.
Employment Law Information Center
In California, all employees are considered to be employed "at-will" unless there is an agreement between the employer and employee to the contrary. Thus, unless you have a specific agreement with your employer that says you are employed for a certain period of time, or that you cannot be terminated unless the employer can demonstrate good cause for termination, you are an "at-will" employee.
If you are an "at-will" employee, that means you can quit at any time for any reason, without giving notice. However, it also means that your employer can terminate you at any time, for almost any reason, without notice. An employer cannot terminate you for a wrong reason, meaning that there are certain reasons for termination that are not acceptable under the law. An employer cannot terminate you simply because you are one in a class of people who are considered protected under the law. Those protected classes include, but are not limited to, race, religion, disabled status, age, gender and the like. Furthermore, an employer cannot terminate you in retaliation for engaging in a protected activity, or for refusing to engage in illegal or immoral conduct. For instance, you should not be terminated for reporting illegal discrimination or harassment in the workplace, nor should you be terminated for refusing to break the law on the job.
Unfortunately the great majority of the time you have no recourse for being terminated. In California an employer is allowed to discipline, refuse to rehire, and even terminate employees for any reason, even stupid or erroneous ones. Employers can act on bad information without investigating the accuracy of it. They can make rash, unprofessional decisions. They can be rude and uncaring. They can even act contrary to their own practices and procedures for the most part. There is rarely a legal right to sue an employer for engaging in any of this kind of conduct. However, if you have been terminated wrongfully -- meaning because you are a member of a protected class, or in retaliation for engaging in a protected activity -- you should engage competent counsel immediately.
There are time limits involved in employment litigation that are unique to that area of law. Some of those limits include the requirement to file documents with governmental agencies within a defined period of time after the termination. While you can file those documents yourself, it is far better to have an attorney assist you with that process, as a failure to name persons or include facts or claims can be used later on to limit your possible recovery.