The past year has been difficult for everyone, with the Covid-19 pandemic forcing millions of people to lock down at home and businesses to shut their doors. But when corporations sought coverage for their unexpected closures, they often found that their insurance policies were desperately unclear on whether or not the companies were covered for pandemic losses.
Enter lawyers like New York-based Marc Ladd, partner at Cohen Ziffer Frenchman & McKenna. Ladd and his team specialize in insurance law, and have been invaluable supporters of corporations in their fight for insurance coverage through not only our current unexpected emergency, but many others in the past. He has fought for corporations’ coverage in a host of crises, from asbestos-related claims to major cases involving Hurricanes Sandy and Katrina.
That fight takes place both in and out of the courtroom: insurance law is often a matter of contracts on paper, but when a case needs to be taken to court, Ladd is no stranger to trials. In fact, his firm specializes in that area in comparison to other insurance litigators. Ladd has described himself as “a counselor before a lawyer,” and prides himself on building an honest and communicative relationship between himself and his clients, so he is able to identify which path will be the most beneficial to them.
His deep knowledge in the niche of insurance policies allows Ladd to give honest and thorough advice to his clients throughout the litigation process and beyond, including later analysis of policy renewals and proposed policy changes. The world of insurance law can often be murky because, as Ladd explains, “A lot of these insurance policies don't end up being triggered until 10, 12, 15 years later. So, it's almost like a re-creation of trying to understand what the parties’ intent was from the language in the contracts in order to get coverage for my client.” Rather than being intimidated by this lack of clarity, Ladd is energized by it. “There’s something that I enjoy,” he says, “about arguing between the lines about what the party's intent was from a written contract after the fact.”
In 2020, Ladd represented businesses in New York and beyond who were seeking Covid-19 coverage, and even represented famed pharmaceutical company and vaccine producer Pfizer Inc. The recent pandemic may have brought insurance coverage litigators to the forefront of legal consciousness, but Ladd’s expert experience has helped companies for years in the past, and will still for years to come.
Lawdragon: Tell me about your case on behalf of that outdoor mall in Las Vegas, with the insurance carrier that's refusing Covid-19 coverage. How significant is the suit, and what might the result mean for others?
Marc Ladd: Absolutely. So, we represent Grand Bazaar Shops, which is right on the Las Vegas Strip. Our client is the landlord of that space and has dozens of tenants – retail, bars and restaurants. When the pandemic started and the government stay-at-home orders were issued they suffered losses, like thousands of businesses across the country. So, they looked into their property policy, since their property was obviously being affected by the pandemic.
The matter came to us through a client relationship that we had success with in past years. Even though the policy had a forum selection clause for New York, this is at its core a Las Vegas business. So, we decided there was an endorsement in the policy that said that the insurer would submit to any jurisdiction of the insured's choosing.
When we filed in Nevada state court, the insurer tried to dismiss on all counts on every argument. There was a pollution exclusion in the policy, which led to debate over whether or not the virus constitutes physical loss or damage to property. All these issues are highly contested across the country. We feel that the Nevada state court made the correct decision in denying the insurer’s motion to dismiss on all grounds.
As we interpret the court's order, the pollution exclusion actually should not apply because the insurer did not carry its burden in showing that it unambiguously excluded coverage. Right now, we're going forward with discovery, but given the current landscape of Covid-19 business interruption claims, it was a very significant victory. I think it showed an aspect of what we're seeing across the country, which is that state courts are really digging in and looking to see whether or not these claims are covered under property policies. Then, they’re allowing these matters to go forward into discovery much more often than usual. We were obviously very happy to be amongst the first wave of decisions to get past an insurer's attempts to avoid coverage.
LD: It's really interesting. From a layman’s perspective, I’m wondering exactly how the insurance companies are trying to dodge these claims.
ML: Well, one of the arguments that the carriers are using is there has to be some visible damage to the property that can be seen from the naked eye, like with fire or hurricane damage. But, if that was the case, then they should have written the policy differently. That's not what the policies report. It's only physical loss or damage to property. A number of courts have held that that sentence can include a physical substance such as Covid on the property.
LD: Is it true that some carriers or policies could include or exclude pandemic circumstances specifically?
ML: Well, we've seen a select few policies, usually in the area of event cancellation, that may have a specific coverage for loss of business income due to a pandemic. I would say that those policy provisions are few and far between, and, usually, specifically designed for maybe yearly events. For example, I know that Wimbledon Tournament had event cancellation coverage that was supposedly specifically written for the possibility of a pandemic.
What I do know is that a lot of these policies, including most of our clients’, don't have anything that specifically speaks to excluding this type of loss. And so it's up to the insurance company to show that any loss falls specifically within an exclusion in order to avoid coverage. And if they can't, then they have to pay.
LD: I see. You’ll have to keep us posted on how these cases proceed. So, aside from this suit, what other cases are you working on now?
ML: One of my cases that I'm working on right now is for Pfizer. We have been successful against the carriers in Delaware State Court on coverage for a settlement and defense costs of the shareholder class action litigation that Pfizer settled. We won both decisions at the trial court level, and while it was up on appeal to the Delaware Supreme Court, we successfully settled the dispute with the carrier for a great result for our client. That's one of my primary cases that I had been working on until very recently.
Another one is, a lot of us are working on the Philadelphia Energy Solutions explosion from June of 2019. In that case we're in litigation with a whole host of carriers, both domestic and international and trying to recoup our losses for that explosion.
LD: Great. How did this practice start for you, representing corporations in insurance coverage claims? Was it happenstance, or more deliberate?
ML: I wish I could say I had always thought I’d be a corporate insurance coverage lawyer. I think I was mostly focused on being a professional baseball player when I was young. But right out of law school I immediately gravitated toward this practice area. I started my career at Anderson Kill & Olick, which has a heavy focus on policyholder practice. After I was a summer associate at that firm, I went back to law school and I started taking a couple of insurance law classes just to learn a little bit more about it, and I realized I enjoyed complex contract work.
LD: That makes sense. Did you have mentors at first, or do you think you mostly just fell in love with the work?
ML: It was mostly about the work. What I like about what we do, and this is the same with several firms I’ve been at, is that we do this work at the highest level. And that's what I always wanted, no matter what practice area I fell into, was to practice whatever I was doing at the highest level. And I really found that in my career. I am constantly impressed with my colleagues and my fellow partners as to the creative arguments that we can try and come up with to serve our clients.
LD: You really have been operating at the highest level. The work that you did for New Jersey Transit after Hurricane Sandy seemed like a spectacular win. Tell me about that.
ML: Thank you, yes. Our firm really has a team effort mindset, where everyone goes into everyone else’s office, even virtually, to ask questions and get advice. That case in particular was a real team effort among myself and my partners in terms of the sheer number of insurers in that case and the constant arguments that they were coming up with in order to avoid coverage. The NJ Transit case exemplifies part of what I enjoy the most about what I do.
We're usually in the situation of dealing with a plaintiff who suffered a loss, right? There’s no clearer example of that than what happened with NJ Transit. After Hurricane Sandy, which was an incredibly powerful storm that caused incalculable damage, the carriers who had specifically written this hurricane coverage for my client refused to pay, because they couldn't even envision this actually happening. They even got to the point where they argued that NJ Transit didn't even want to buy this coverage in the first place.
In the end, we were able to get the money they needed and beat back all the excuses that the insurers were coming up with when they clearly wrote this coverage for hurricane damage. That was our first official win at the new firm, and the New Jersey Supreme Court affirmed the two courts below where we had been successful.
LD: Oh, wow. That's something to celebrate. How many trials have you done? Do you know offhand?
ML: I've done a handful, whether it's a trial or it's a confidential arbitration. As an insurance litigator, more often than not, our cases are decided on the papers as a matter of contract law, but there are the occasional trials and my group actually specializes in those, relatively speaking for insurance litigators. So, I've had a handful of trials and arbitrations.
LD: Ah, that’s interesting. And how would you describe your style as a litigator or arbitrator?
ML: I think first and foremost, I'm reasonable. When it's time to be strict and talk for my client, that's no issue, but when it's time to be reasonable, I can do that as well, because that's really what judges and juries respond to, is reasonableness. I try to always cut to the chase and see what the quickest path is for my client.
LD: That's smart. And I think it's fantastic that you've developed this niche for yourself. Do you have any advice for law students or young lawyers who want to sort of build a niche for themselves in their career?
ML: Sure. So, my first piece of advice for new lawyers is always to focus on your writing and focus on your oral presentation. They feed off each other, even if you are not presenting in court, you're often presenting in front of the client. The key is to get as comfortable as you can with how to relate your point and how to convey your argument with confidence. The stronger the writer you are, the stronger the oral advocate you will be.
The other piece of advice I would give is to focus on relationships. I have had former classmates of mine become colleagues, adversaries and clients. Soon enough, I'm sure I'll have a judge in there, too. It just serves your long-term interests to develop those relationships so that when you see that person later in your career you already have a rapport.
LD: Any tips for building those client relationships? That’s sometimes tough for younger attorneys.
ML: I know it sounds like a cliche, but if you’re serving the client’s interest it serves both of your interests in the end. You have to be upfront about your strategy from the beginning. I’m a litigator, and sometimes litigation isn’t always the best option – and I’ll tell a client that. It's good to talk with a client to imagine, even a couple of years down the line, where you see this path ending up and then going backwards and figuring out the best way to get to that goal together.
LD: That makes sense. And then, as far as your client base, I’m guessing you don’t have too many repeat clients, right?
ML: That's correct. In general, you're not supposed to sue your insurance lawyer that many times, right? A lot of our client base comes from word of mouth. A focus of our group is strong writing and strong oral advocacy, and that leads to wins, which builds up our reputation.
LD: It's almost old-fashioned in a way, but I love that you really see your wins driving your business. So, this is perhaps a less serious question, but what's your favorite book, film or television show about the law?
ML: Overall, my favorite movie about the law is probably “The Verdict.” It's an excellent display of trying to guide your witness during prep into the point of view that they should have without specifically trying to tell them, because that way it's more organic and it serves the case better. That being said, my favorite and probably the most accurate portrayal of an attorney is the “Unfrozen Caveman Lawyer” sketch by Phil Hartman on Saturday Night Live.
LD: Oh, I’ll have to Google that.
ML: At trial I will still see shades of “Unfrozen Caveman Lawyer.” It's probably the most genius, subtle parody of the attorney industry.
LD: That’s fantastic. And now you’re making me wonder: what made you first want to be a lawyer? Where'd that idea come from? Do you have lawyers in your family?
ML: No, no. My mom was a school nurse and my father was a landscaper. I always knew I wanted to engage in some profession where I was able to present. My mother envisioned that I would be a variety talk show host. But there was always something about the presentation that appealed.
LD: And then at some point you found you had a bit of a knack for arguing, writing, that sort of thing, and it came together?
ML: Pretty much. I've enjoyed my career, honestly, as an insurance coverage litigator. Every case is different and that's the best thing you can ask for in your job. Contracts may look the same, but the facts are always different.