At nine the next morning, the temperature is eleven degrees as I walk into the law school. It’s open, but deserted. Leuberg is waiting in his office with hot coffee. We talk for an hour about things he misses in Memphis, law school not being one of them. His office here is much like his office there—cluttered, disheveled, with politically provocative posters and bumper stickers stuck to the walls. He looks the same—wild bushy hair, jeans, white sneakers. He’s wearing socks, but only because there’s a foot of snow on the ground. He’s hyper and energetic.
I follow him down the hall to a small seminar room with a long table in the center of it. He has the key. The file I shipped him is arranged on the table. We sit in chairs opposite one another, and he pours more coffee from a thermos. He knows the trial is six weeks away.
“Any offers to settle?”
“Yeah. Several. They’re up to a hundred and seventy-five thousand, but my client says no.”
“That’s unusual, but I’m not surprised.”
“Why aren’t you surprised?”
“Because you got ’em nailed. They have great exposure here, Rudy. It’s one of the best bad-faith cases I’ve ever seen, and I’ve looked at thousands.”
“There’s more,” I say, then I tell him about our phone lines being tapped and the strong evidence that Drummond is listening in.
“I’ve actually heard of it before,” he says. “Case down in Florida, but the plaintiff’s lawyer didn’t check his phones until after the trial. He got suspicious because the defense seemed to know what he was thinking of doing. But, wow, this is different.”
“They must be scared,” I say.
“They’re terrified, but let’s not get too carried away.
They’re on friendly territory down there. Your county doesn’t believe in punitive damages.”
“So what are you saying?”
“Take the money and run.”
“Can’t do it. I don’t want to. My client doesn’t want to.”
“Good. It’s time to bring those people into the twentieth century. Where’s your tape recorder?” He jumps from his seat and bounces around the room. There’s a chalkboard on a wall, and the professor is ready to lecture. I remove a tape recorder from my briefcase and place it on the table. My pen and legal pad are ready.
Max takes off, and for an hour I scribble furiously and pepper him with questions. He talks about my witnesses, their witnesses, the documents, the various strategies. Max has studied the materials I sent him. He relishes the thought of nailing these people.
“Save the best for last,” the professor says. “Play the tape of that poor kid testifying just before he died. I assume he looks pitiful.”
“Worse.”
“Great. It’s a wonderful image to leave with the jury. If it tries beautifully, then you can finish in three days.”
“Then what?”
“Then sit back and watch them try to explain things.” He suddenly stops and reaches for something on the table. He slides it across to me.
“What is it?”
“It’s Great Benefit’s new policy, issued last month to one of my students. I paid for it, and we’ll cancel it next month. I just wanted to get a look at the language. Guess what’s now excluded, in bold print.”
“Bone marrow transplants.”
“All transplants, including bone marrow. Keep it, and use it at trial. I think you should ask the CEO why the policy was changed just a few months after the Blacks
filed suit. Why do they now specifically exclude bone marrow? And if it wasn’t excluded in the Black policy, then why didn’t they pay the claim? Good stuff, Rudy. Hell, I might have to come watch this trial.”
“Please do.” It’d be comforting to have a friend other than Deck available for consultation.
Max has some problems with our analysis of the claim file, and we’re soon lost in paperwork. I haul the four cardboard boxes from my trunk to the seminar room, and by noon the place resembles a landfill.
His energy is contagious. Over lunch, I get the first of several lectures on insurance company bookkeeping. Since the industry is exempt from federal antitrust, it has developed its own accounting methods. Virtually no competent CPA can understand a set of financials from an insurance company. They’re not supposed to be understood because no insurance company wants the outside world to know what it’s doing. But Max has a few pointers.
Great Benefit is worth between four hundred and five hundred million dollars, about half of it hidden in reserves and surpluses. This is what must be explained to the jury.
I don’t dare suggest the unthinkable, the notion of working on Christmas Day, but Max is gung-ho. His wife is in New York visiting her family. He has nothing else to do, and he sincerely wants to work our way through the remaining two boxes of documents.
I fill three legal pads with notes, and half a dozen cassette tapes with his thoughts about everything. I’m exhausted when he finally says we’re through, sometime after dark, December 25. He helps me repack the boxes and haul them to my car. Another heavy snow is falling.
Max and I say good-bye at the front door of the law school. I can’t thank him enough. He wishes me well, makes me promise to call him at least once a week before
the trial and once a day during it. He says again that there’s a chance he might zip down for it. I wave good-bye in the snow.
IT TAKES THREE DAYS to ramble my way to Spartanburg, South Carolina. The Volvo handles beautifully on the road, especially in the snow and ice across the Upper Midwest. I call Deck once on my car phone. The office is quiet, he says. No one’s looking for me.
I’ve spent the past three and a half years studying long hours to get my law degree and working whenever I could at Yogi’s. I’ve had little time off. This low-budget journey around the country might seem boring to most folks, but for me it’s a luxurious vacation. It clears my head and soul, allows me to think of things other than the law. I unload some baggage, Sara Plankmore for one. Old grudges are dismissed. Life is too short to despise people who simply can’t help what they’ve done. The grievous sins of Loyd Beck and Barry X. Lancaster are forgiven somewhere in West Virginia. I vow to stop thinking and worrying about Miss Birdie and her miserable family. They can solve their own problems without me.
I go for miles dreaming of Kelly Riker and those perfect teeth and tanned legs and sweet voice.
When I do dwell on legal matters, I focus on the looming trial. There’s only one file in my office that could get anywhere near a courthouse, so there’s only one trial to think about. I practice my opening remarks to the jury. I grill the crooks from Great Benefit. I damn near cry as I plead my final summation.
I get a few stares from passing motorists, but hey, nobody knows me.
I’ve talked to four lawyers who’ve sued or are currently suing Great Benefit. The first three were no help. The fourth lawyer is in Spartanburg. His name is Cooper Jack
son, and there’s something strange about his case. He couldn’t tell me on the phone (the phone in my apartment). But he said I was welcome to stop by his office and look at his file.
He’s in a bank building downtown, a firm with six lawyers in modern offices. I called yesterday from my car phone somewhere in North Carolina, and he’s available today. Things are slow around Christmas, he said.
He’s a burly man, with thick chest and thick limbs, dark beard and very dark eyes that glow and dance and animate every expression. He’s forty-six, and he tells me he made his money in product liability. He makes sure his office door is closed before he goes any further.
He’s not supposed to tell me most of what he’s about to tell me. He’s settled with Great Benefit, and he and his client signed a strict confidentiality agreement that provides severe sanctions if anyone discloses the terms of the settlement. He doesn’t like these agreements, but they’re not uncommon. He filed suit a year ago for a lady who developed a severe sinus problem and required surgery. Great Benefit denied the claim on the grounds that the lady had failed to disclose on her application the fact that she’d had an ovarian cyst removed five years before she bought the policy. The cyst was a preexisting condition, the denial letter read. The claim amounted to eleven thousand dollars. Other letters were swapped, more denials, then she hired Cooper Jackson. He made four trips to Cleveland, in his own plane, and took eight depositions.
“Dumbest and sleaziest bunch of bastards I’ve ever run across,” he says, talking about the folks in Cleveland. Jackson loves a nasty trial, and plays the game with no holds barred. He pushed hard for a trial, and Great Benefit suddenly wanted a very quiet settlement.
“This is the confidential part,” he says, relishing the idea of violating the agreement and spilling his guts to me.
I’ll bet he’s told a hundred people. “They paid us the eleven thousand, then threw in another two hundred thousand to make us go away.” His eyes twinkle as he waits for me to respond. It is truly a remarkable settlement because Great Benefit effectively paid a bunch of money in punitive damages. No wonder they insisted on nondisclosure.
“Amazing,” I say.
“Yes it is. Me, I personally didn’t want to settle, but my poor client needed the money. I’m convinced we could’ve popped them for a big verdict.” He tells a few war stories to convince me he’s made a ton of money, then I follow him to a small, windowless room lined with shelves filled with identical storage boxes. He points to three of them, then leans his heavy frame against the shelves. “Here’s their scheme,” he says, touching a box as if great mysteries are contained therein. “The claim comes in and is assigned to a handler, just a low-level paper pusher. The people in claims are the poorest trained, least paid of all. It’s that way in every insurance company. The glamour is over in investments, not claims or underwriting. The handler reviews it, and immediately begins the process of post-claim underwriting. He or she sends a letter to the insured denying the claim. I’m sure you have such a letter. The handler then orders the medical records for the past five years. The medicals are then reviewed. The insured gets another letter from claims saying, ‘Claim denied, pending further review.’ Here’s where it gets fun. The claims handler then sends the file over to underwriting, and underwriting sends a memo back to claims which says something like ‘Don’t pay this claim until you hear from us.’ There’s more correspondence between claims and underwriting, letters and memos back and forth, paperwork builds up, disagreements ensue, clauses and subclauses in the policy become hotly in dispute as these two
departments go to war. Keep in mind, these people work for the same company in the same building, but rarely know each other. Nor do they know anything about what the other department is doing. This is very intentional. Meanwhile, your client is sitting in his trailer getting these letters, some from claims, some from underwriting. Most people give up, and this, of course, is what they’re counting on. About one in twenty-five will actually consult a lawyer.”
I’m recollecting documents and fragments of depositions as Jackson tells me this, and, suddenly, the pieces are falling into place. “How can you prove this?” I ask.
He taps the boxes. “It’s right here. Most of this stuff you don’t need, but I have the manuals.”
“So do I.”
“You’re welcome to go through this. It’s all perfectly organized. I have a great paralegal, two actually.”
Yes, but I, Rudy Baylor, have a
paralawyer!
He leaves me with the boxes, and I go straight for the dark green manuals. One is for claims, the other for underwriting. At first, they appear almost identical to the ones I’ve obtained in discovery. The procedures are arranged by sections. There’s an outline in the front, a glossary in the back, they’re nothing more than handbooks for the paper pushers.
Then I notice something different. In the back of the manual for claims, I notice a Section U. My copy does not have this section. I read it carefully, and the conspiracy unravels. The manual for underwriting also has a Section U. It’s the other half of the scheme, precisely as Cooper Jackson described it. The manuals, when read together, direct each department to deny the claim, pending further review, of course, then send the file to the other department with instructions not to pay until further notice.
The further notice never comes. Neither department can pay the claim until the other department says so.
Both Section U’s set forth plenty of directions on how to document each step, basically how to build a paper trail to show, if one day necessary, all the hard work that went into properly evaluating the claim before denying it.
Neither of my manuals has a Section U. They were conveniently removed before they were given to me. They—the crooks in Cleveland and perhaps their lawyers in Memphis—deliberately hid the Section U’s from me. It is, to put it mildly, a staggering discovery.
The shock wears off quickly, and I catch myself laughing at the thought of yanking these sections out at trial and waving them before the jury.
I spend hours digging through the rest of the file, but can’t keep my eyes off the manuals.
COOPER LIKES TO DRINK vodka in his office, but only after 6 P.M. He invites me to join him. He keeps the bottle in a small freezer in a closet that serves as a bar, and he sips it straight, no ice, no water. I sip mine too. About two good drops per drink, and it burns all the way down.
After he drains his first shot glass, he says, “I’m sure you have copies of the various state investigations of Great Benefit.”
I feel completely ignorant, and there’s no sense lying. “No, not really.”
“You need to check them out. I reported the company to the Attorney General of South Carolina, a law school buddy of mine, and they’re investigating now. Same in Georgia. The Commissioner of Insurance in Florida has started an official inquiry. Seems as if an excessive number of claims were denied over a short period of time.”
Months ago, back when I was still a student of the law,
Max Leuberg mentioned filing a complaint with the state Department of Insurance. He also said it probably wouldn’t do any good because the insurance industry was notoriously cozy with those who sought to regulate it.
I can’t help but feel as if I’ve missed something. Hey, this is my first bad-faith case.