Construction Law Seminar. Defense Practice Seminar Course Materials

Construction Law Seminar Defense Practice Seminar Course Materials September 2012

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Course Materials Table of Contents Defending the Design Professional:... 1 A Review of Statutory and Contractual Defenses John P. Cahill, Jr. and Leslee N. Haas Choose Your Audience Wisely:... 27 Effective Techniques for Voir Dire Robert B. Hirschhorn Latest Developments in CGL Coverage for Construction Defects (2012 Update)... 187 Lee H. Shidlofsky Is Risk Transfer Risky Business?... 223 Contractual Indemnification, Additional Insureds, and OCIP/CCIP in the Construction Context Lisa J. Black Introduction to Construction Law:... 237 What You Need to Know When You Are Just Starting Out Diana Gerstberger and Robin D. Leibrock Making the Points to Win Your Case:... 247 How Juries Decide Nicole Whyte A Review and Update of Anti-Indemnity Statutes... 259 Kamy Molavi The Lack of Appeal of Arbitration for Non-Signatories... 275 Adrienne D. Cohen and Julie R. Ursic Advanced Techniques for Cross-Examination of the Technical Expert... 285 Toyja E. Kelley and Lydia S. Hu

Defending the Design Professional: A Review of Statutory and Contractual Defenses John P. Cahill, Jr. Leslee N. Haas Hays, McConn, Rice & Pickering, P.C. 1233 West Loop S., Suite 1000 Houston, TX 77027 (713) 752-8322 (713) 650-0027 [fax] jcahill@haysmcconn.com

John P. Cahill, Jr., has been licensed to practice law in the State of Texas since of November 1984. He graduated from Baylor University in 1983 with a Bachelor of Arts Degree and from Baylor University School of Law with a Juris Doctor in August 1984. He joined Hays, McConn, Rice & Pickering, P.C., as a shareholder on December 1, 1999, and serves on the firm s Management Committee. Mr. Cahill was a partner with the firm of Funderburk & Funderburk, L.L.P., where he practiced law from August 1984 until November of 1999. He concentrates his practice in the representation of architects, engineers, surveyors, real estate brokers, and others involved in the construction industry. Mr. Cahill has conducted numerous risk management seminars for various design professional organizations, insurance companies and brokers and for clients. Mr. Cahill was president of the Braes Bayou Little League and was an active baseball and basketball coach. He is a CCE instructor at St. Vincent de Paul Catholic Church in Houston. Leslee N. Haas has been licensed to practice law in the State of Texas since of November 2003. She graduated from the University of Texas at Austin with a Bachelor of Arts Degree in 1999 and from Texas Tech School of Law with a Juris Doctor in May 2003. She joined Hays, McConn, Rice & Pickering, P.C., as an associate in November 2009. Her practice areas include general civil litigation, construction litigation, commercial litigation, personal injury defense, product liability, premises liability, and employment litigation.

Defending the Design Professional: A Review of Statutory and Contractual Defenses Table of Contents I. Introduction...5 II. Statutory Defenses to Liability...5 A. Certificate or Affidavit of Merit, a/k/a, the Key to the Door...5 B. Alternative Procedural Requirements...6 C. Statute of Limitations...7 D. Statutes of Repose...7 E. Anti-Indemnity Statutes...8 III. Contractual Defenses to Liability...8 A. Construction Administration...9 B. Limitation of Liability Provisions in Contracts...10 C. Contractual Modification of the Statute of Limitations Period...11 D. Indemnity...11 E. Waiver of Subrogation...11 IV. Conclusion...12 Defending the Design Professional: A Review of Statutory and... Cahill and Haas 3

Defending the Design Professional: A Review of Statutory and Contractual Defenses I. Introduction The purpose of this paper is to examine liability defenses for design professionals based upon statutory and contractual provisions. II. Statutory Defenses to Liability Several states have enacted various statutory provisions which effectively reduce or eliminate the liability of design professionals. These include Statutes of Repose, Certificates of Merit requirements, pre-suit review panels, and anti-indemnity statutes. A. Certificate or Affidavit of Merit, a/k/a, the Key to the Door Currently, twelve states require a Certificate or Affidavit of Merit as a prerequisite to pursuing claims against design professionals: Arizona, California, Colorado, Georgia, Maryland, Minnesota, Nevada, New Jersey, Oregon, Pennsylvania, South Carolina, and Texas. In most states, the design professional includes architects, engineers, and surveyors. A Certificate of Merit or Affidavit of Merit, in most circumstances, is an affidavit or certification by another licensed design professional setting forth facts in support of the plaintiff s claims of negligence or design defect against the design professional defendant. Some states, such as California, permit counsel for the Plaintiff to submit an affidavit stating that he or she has conferred with a professional licensed in the same discipline as the defendant and that, based upon the consultation, there is a meritorious basis for the filing of the suit. See Cal. Civ. Proc. Code 411.35(b)(1). Most states that require a Certificate of Merit dictate it be filed with the original complaint. Additional time is permitted if, due to limitations issues, a certificate cannot be obtained prior to the expiration of the limitations period. Other states require the Certificate of Merit be filed within a set number of days after the complaint is filed. For example, New Jersey requires the Affidavit of Lack of Care be filed within sixty days after the filing of the defendant s answer. N. J. Stat. Ann. 2A:53A-27. The ostensible purpose of a Certificate of Merit is to weed out frivolous claims against design professionals. As such, these statutes provide a mechanism for dismissal of the case in the event that a certificate of merit is not timely filed though some states allow an opportunity to remedy the failure prior to dismissal. Arizona provides that the court may extend the time for compliance with [the expert affidavit requirement] on application and good cause shown or by stipulation of the parties. Ariz. Rev. Stat. Ann. 12-2602. California permits the attorney for the claimant to file a certification with the initial complaint stating that he or she was unable to comply with the consultation requirement due to limitations. Cal. Civ. Proc. Code 411.35. In such cases, the certificate must be filed within sixty days after the filing of the complaint. However, other states provide no method for remedying the error. Texas is such a state. Texas statute requires the Certificate of Merit be filed with the initial petition, the exception being where the running of limitations is impending. Tex. Civ. Prac. & Rem. Code Ann. 105.002. A trial court has no discretion but to grant the defendant s motion to dismiss the complaint when a plaintiff fails to file a Certificate of Merit with the original complaint, though the court has discretion as to whether to dismiss with or without prejudice. Sharp Eng g v. Luis, 321 S.W.3d 748, 752 (Tex. App. Houston [14 th Dist.] 2010, no pet.). However, the distinc- Defending the Design Professional: A Review of Statutory and... Cahill and Haas 5

tion between dismissal with prejudice versus dismissal without prejudice may be rendered meaningless if the motion to dismiss is filed after the running of the limitations period. Under the current version of the Texas statute, there is no requirement that the motion to dismiss for failure to provide a certificate of merit be filed immediately instead of waiting until the expiration of limitations. Maryland has a mechanism by which there can be a time extension for filing the Certificate of Merit. Maryland s statute requires that the certificate be filed within 90 days of filing of the complaint or the defendant may move to dismiss the case without prejudice, though the deadline can be extended as long as the request is made within the initial ninety day period. Md. Code Ann. Cts. & Jud. Proc. 3-2C-02. A motion to dismiss is not a mandatory motion and may be raised at any time. Heavenly Days Crematorium, LLC v. Harris, Smariga & Associates, Inc., 202 MD. App. 252; 32 A.3d 155 (2011) writ of cert granted 425 Md. 227; 40 A.3d 39 (2012). The Court noted that it was sympathetic to [Plaintiff s] contention that the statute of limitations has run, effectively converting the August 16, 2010 dismissal without prejudice into a dismissal with prejudice. The Court further acknowledged that the result was potentially harsh where the statute of limitations had run because such claimants were time barred from refiling their claims, despite the fact that the claims may have been meritorious and timely when filed. 202 Md. App. at 281; 32 A.3d at 172-73. B. Alternative Procedural Requirements Other states provide prerequisites for suits against design professionals. Kansas provides that a party may request an early screening of a malpractice case: (a) If a professional malpractice liability action is filed in a district court and one of the parties requests, by filing a memorandum, that a professional malpractice screening panel be convened, the judge of the district court shall convene a professional malpractice screening panel. If a claim for damages arising out of the rendering of or failure to render services by a professional licensee has not been formalized by the filing of a petition, any party affected by such claim may request, by filing a memorandum with the court, that a screening panel be convened and, if such request is made, the judge of the district court or the chief judge of such court shall convene a screening panel. If a petition or claim is filed naming more than one defendant or more than one person against whom a claim is being made, each defendant or person is entitled to request a separate screening panel. Kan. Stat. Ann. 60-3502; see Health Care Props., L.L.C. v. Paul-Wertenberger Constr., Inc., 177 P.3d 428 (Kan. Ct. App. 2008) (applying statute to architect). The panel is comprised of three individuals licensed in the same profession as the defendant and a lawyer appointed by the court to serve as chair person without voting privileges. Kan. Stat. Ann. 60-3502(b). The panel issues a written opinion regarding whether the professional deviated from the standard of care which caused the claimant s alleged injury and there may be concurring and dissenting opinions. The panel s decision is not binding and either party may reject the panel s determination and proceed to trial. 60-3506. The opinion may be admitted into evidence in any subsequent legal proceeding. 60-3505(c). Panel members may be subpoenaed to testify. Wyoming had previously enacted a mandatory panel review of all professional liability claims. However, the law was held to be unconstitutional in State ex rel. Wyo. Ass n of Consulting Eng rs & Land Surveyors v. Sullivan, 798 P.2d 826, 1990 Wyo. LEXIS 116 (Wyo. 1990). Florida mandates pre-suit notice providing a design professional or contractor the opportunity to inspect and cure alleged deficiencies. Fla. Stat. 558.004. The statute requires the claimant to serve written 6 Construction Law Seminar September 2012

notice on the contractor, subcontractor, supplier, or design professional, as applicable, describing the claim in reasonable detail sufficient to determine the general nature of each alleged construction defect and a description of the damage or loss resulting from the defect, if known. The design professional has thirty days to inspect and test. Within forty-five days of receiving the initial notice, the design professional must provide a written response to the claimant setting forth details of the inspection, willingness to make repairs and, if so, the scope and time table for repairs or whether the claims are disputed. The claimant may proceed with suit if the claim is disputed. If the design professional extends an offer, the claimant must respond either by accepting or rejecting the offer within forty-five days with the result of a failure to respond being a possible stay of any suit. However, Fla. Stat. 558.005 allows the parties to a construction contract to opt out of this as long as the contract contains the statutory opt out language. C. Statute of Limitations For negligence claims, the statute of limitations usually begins to run from the date of the injury. The discovery rule operates to extend the running of the limitations period until the date the claimant is in possession of enough information to where he is or should be aware of the claim. In Southwest Olshan Foundation Repair Co., LLC v. Gonzales, the court of appeals determined that the limitations period began to run when the homeowner noticed something was wrong with her foundation which occurred more than two years before she filed suit for defective foundation repairs. 345 S.W.3d 431 (Tex. App. San Antonio 2011, pet. granted). The homeowner asserted that she did not know the pilings used in the foundation repair were defective until she obtained a report several years later. The court rejected the argument explaining that the type of injury she complained of could have been discovered by the use of diligence. D. Statutes of Repose The vast majority of states have enacted a statute of repose benefitting design professionals. The most common repose period is ten years although several states have enacted substantially shorter times as well as repose periods that vary depending on the type of construction. In almost all cases, the statute begins to run from the date of substantial completion of the project. Oregon defines substantial completion as the date when the contractee accepts in writing the construction, alteration or repair of the improvement to real property or any designated portion thereof as having reached that state of completion when it may be used or occupied for its intended purpose or, if there is no such written acceptance, the date of acceptance of the completed construction, alteration or repair of such improvement by the contractee. Or. Rev. Stat. 12.135(4)(b). Repose statutes have also been challenged as unconstitutional. Most courts determined that the repose statutes, as long as the time frame was reasonable, were constitutional. However, in at least one state, the statute of repose s constitutionality was successfully challenged. In Perkins v. Northeastern Log Homes, 808 S.W.2d 809 (Ky. 1991). Kentucky s statute of repose, barring suits against the design professional filed more than five years after substantial completion, was held unconstitutional. The Kentucky Supreme Court determined that the statute of repose was special legislation targeting certain defendants and types of claims and held it was unconstitutional because it would cut off rights before they accrued, essentially causing a claimant to sue before knowing he was injured. The Court explained that a statute of repose violates the Kentucky Constitution and would be impermissible even if the repose period was lengthened. Responsible third party statutes may impact statutes of repose. The Texas Supreme Court was asked to determine the interplay between the statute repose and the designation of a responsible third party. Under Texas contribution statute, a party could designate another entity or person as a responsible Defending the Design Professional: A Review of Statutory and... Cahill and Haas 7

third party liable for part or all of Plaintiff s claimed damages. TEX.CIV.PRAC.&REM.CODE 33.004. A designated responsible third party does not become party to a suit, but will be listed on the jury charge as part of the proportional liability question. However, the statute originally provided that a plaintiff may sue a party designated as a responsible third party even if the limitations period had already expired if the responsible third party was sued within 60 days of the designation. In Galbraith Eng r Consultants, Inc. v. Pochucha, the Texas Supreme Court determined that a party designated as a responsible third party did not lose the defense of the statute of repose as it specifically extended limitations for a 60 days window after the court s order of designation: [W]hile statutes of limitations operate procedurally to bar the enforcement of a right, a statute of repose takes away the right altogether, creating a substantive right to be free of liability after a specified time. Thus, the purpose of a statute of repose is to provide absolute protection to certain parties from the burden of indefinite potential liability. The Court further explained that by allowing the revival of the claim barred by a statute of repose for the sixty day period described in Chapter 33, it would essentially nullify the repose statute since liability could be extended indefinitely through the designation of a responsible third party. The Court concluded that being designated as a responsible third party did not revive claims extinguished by the statute of repose. E. Anti-Indemnity Statutes As contractual indemnification provisions became a common occurrence, several states enacted what are called anti-indemnity statutes. As explained by the Arizona Supreme Court, Anti-indemnification statutes are primarily intended to prevent parties from eliminating their incentive to exercise due care. Because an indemnity provision eliminates all liability for damages, it also eliminates much of the incentive to exercise due care. 1800 Ocotillo, LLC v. WLB Group, Inc., 196 P.3d 222, 219 Ariz. 200, 203 (Ariz. 2008). Most states have enacted some form of anti-indemnity provision. In general, anti-indemnity statues bar a party from contractually requiring another party to indemnify it for its own negligence. For example, Missouri enacted legislation voiding as against public policy any contract or agreement for public or private construction work, a party s covenant, promise or agreement to indemnify or hold harmless another person from that person s own negligence or wrongdoing. Mo. Ann. Stat. 434.100. New York has a similar provision which states, Agreements by owners, contractors, subcontractors or suppliers to indemnify architects, engineers and surveyors from liability caused by or arising out of defects in maps, plans, designs and specifications void and unenforceable. NY Gen. Oblig. 5-324. The practical effect of these provisions will be to negate negotiated indemnity provisions, in most instances, effectively limiting an architect or engineer to only indemnify an owner for the negligence of the architect/engineer or its consultants (of any tier). See, e.g., Tex. Ins. Code Ann. 151.102 (Vernon Supp. 2012); see also Ariz. Rev. Stat. Ann. 32-1159 (voiding as against public policy indemnification provisions in construction and architect-engineer contracts for indemnitee s sole negligence); Mont. Code Ann. 28-2-2111 (voiding indemnification for indemnitee s own negligence but permitting other contractual indemnification provisions). III. Contractual Defenses to Liability Contracts vary by Project, owner, the design professional and other variables, including whether the contract is an AIA form, EJCDC (NSPE), Consensus Docs, letter agreement, or, and yes, it happens, an oral agreement. To complicate matters, the form contracts are typically modified. And, to make matters worse, the parties conduct may do away with contractual protections. 8 Construction Law Seminar September 2012

A. Construction Administration Much litigation had discussed the extent of a design professional s construction administration responsibilities, including the duty to evaluate (not inspect) the work of a general contractor and subcontractors. A major source of potential liability for the architect or engineer relates to the provision of construction administration services. The B201, successor to the B141, defines construction administration services in Article 2.6, particularly Article 2.6.1.1 which provides, in pertinent part, that The Architect shall provide administration in the contract between the owner and the contractor... Texas defines the Practice of Architecture to include observing the construction, modification, or alteration of work to evaluate conformance with architectural plans and specifications. Tex. Occ. Code Ann. 1051.001. Typically, an Architect agrees to visit the site at most appropriate to the stage construction, or as otherwise required... Article 2.6.2.1, AIA Document B201-2007. Many agreements and modifications in the scope of services provide that the architect may visit at specific intervals. This is significant in that, if an architect does not comply with specific agreements and, hence, his or her duties to make site visits, the language which exonerates the Architect from liability, as set forth in the general conditions or in the B201 may not become operative to reduce the liability of the architect. Where it is determined that the architect or engineer performed the agreed upon site visits, there is a significant advantage in defending the architect. The Florida Court of Appeals construed contractual language in which the Architect agreed to make periodic visits to the site to familiarize himself generally with the progress and quality of the work and to determine in general if the Work is proceeding in accordance with the Contract Documents and to endeavor to guard the Owner against defects and deficiencies in the work of the Contractor. The Owner agreed that the Architect would not be responsible for the acts or omissions persons performing project work. Shepard v. City of Palatka, 414 So. 2d 1077 (Fla. 5th DCA 1981). The court explained that the architects failure to make the agreed upon site visits could allow liability even in the face of the language that the architect was not responsible for the work of the contractors. Because it was determined that the architect had conducted site visits, it had no duty to detect the omission of the contractor and was absolved of liability for any such defect. In Black + Vernooy v. Smith, it was held that the architect owed no duty to third parties injured as a result of a defectively installed deck that separated from the house and fell injuring the claimants. 346 S.W.3d 877 (Tex. App. Austin 2011, pet. granted). The basis of the complaint was that under the contract between the architect and the homeowners, the engineer would periodically visit the construction site, to report observed deviations from the design plans to the [owners], and to guard the [owners] against defects in the construction of the home. The architect took pictures during site visits that showed certain construction defects. However, the court determined that this contractual duty did not extend to third parties and that the architect owed no common law duty to the claimant. Relying on the limiting language in the contract, the court explained that the contract between the architects and owners permitted the architects to reject the contractor s work but did not authorize the architect to control the actual work performed. As a result, it held that the architects owed no duty either under contract or common law to the third-party claimant. The case is currently pending before the Texas Supreme Court. AIA B101-2007, 2.6.1.2, contains language which, as identified above, protects the Architect from liabilities arising out of a Contractor s work: The Architect shall not have control over, charge of, or responsibility for the construction means, methods, techniques, sequences or procedures, or for safety precautions and programs in connection with the Work, nor shall the Architect be responsible for the Contractor s failure to per- Defending the Design Professional: A Review of Statutory and... Cahill and Haas 9

form the Work in accordance with the requirements of the Contract Documents. The Architect shall be responsible for the Architect s negligent acts or omissions, but shall not have control over or charge of, and shall not be responsible for, acts or omissions of the Contractor or of any other persons or entities performing portions of the Work. As long as the design professional follows the limits of his scope of work and does not expand that scope, he or she should avoid liability. Herczeg v. Hampton Township Mun. Auth., 766 A.2d 866 (Pa. Super. Ct. 1999). During construction, trenchwork was done without shoring or bracing, in violation of project specifications, industry practice and federal regulations. Decedent s representatives alleged that the designer had actual knowledge of the lack of safety. The engineer contended that his contract did not provide any responsibility for job site safety and did not owe a duty to act. The court held that there was no duty on a design professional to protect workers from hazards on a construction site unless there was an undertaking, either by contract or course of conduct the supervisor controlled the construction and/or to maintain safe conditions of the site. Herczeg, 766 A.2d at 871, citing Young v. Eastern Engineering & Elevator Co., Inc., 554 A.2d 77, 79 (Pa. Super. Ct. 1989). The Herczeg court noted that an engineer may take on liability beyond its contract under certain circumstances, such as actual supervision and control the contractor or subcontractors, consistent participation in construction activities at the site, undertaking responsibility for safety, having authority to issue change order, and retaining the right to stop work. Even where an engineer testified that he would have undertaken to stop an unsafe worksite practice, had he seen it, Texas has held that an engineer has no duty regarding work site safety where the contract provides that the engineer did not have control over the work site or a duty to provide for work site safety. Romero v. Parkhill, Smith & Cooper, Inc., 881 S.W.2d 522 (Tex. App. El Paso 1994, writ denied); see also Graham v. Freese & Nichols, 927 S.W.2d 294 (Tex. App. Eastland 1996, writ denied). Admittedly, not all courts support this. In New Jersey, a design professional with no contractual safety obligations may nevertheless have a duty when he or she has actual knowledge of an unsafe or dangerous condition. Carvalho v. Toll Bros. & Developers, 675 A.2d 565 (N.J. 1996). Generally, with the exception of Texas in Black + Vernooy v. Smith, it would seem that the general trend is that a design professional s defense is strengthened by showing 1) compliance with the site visit and observations requirements and 2) that the alleged conditions or defects were not observable. B. Limitation of Liability Provisions in Contracts Limitation of liability provisions may limit the amounts and extent of recovery and may even waive certain causes of action. Some courts have strictly construed these provisions. Georgia has upheld limitation of liability provisions in a contract between an architect and developer. In Precision Planning, Inc. v. Richmark Cmtys., Inc. 298 Ga. App. 78, 679 S.E.2d 43 (Ga. Ct. App. 2009). The limitation of liability provision limited the recovery amount under the contract to $50,000 or the amount of the fee received for services, whichever was greater. Likewise, New Jersey courts have upheld limitation of liability provisions so long as the cap is [not] so minimal compared with the expected compensation, that the concern for the consequences of a breach is drastically minimized. Marbro, Inc. v. Borough of Tinton Falls, 297 N.J. Super. 411 (Law Div. 1996). The provisions are strictly construed. In Florida, for example, an engineer was not entitled to the benefits of a limitation of liability provision which extended only to his firm, but not to him individually. Witt v. La Gorce Country Club, Inc., 35 So. 3d 1033 (Fl. 3rd DCA 2010). 10 Construction Law Seminar September 2012

C. Contractual Modification of the Statute of Limitations Period Some states permit parties to contractually modify the statute of limitations period for breach of the contract. These are generally enforceable, so long as they are reasonable. It has been held that a contractual limitation shortening the time to commence suit are valid, at least so long as a reasonable time is afforded. New Welton Homes v. Eckman, 830 N.E.2d 31, 35 (Ind. 2005). For example, in Texas, the limitation period for a breach of contract action statutorily accrues four years after the breach of the contract. However, the legislature permits parties to contractually reduce the limitations period to not less than 2 years after the breach. Tex. Civ. Prac. & Rem. Code Ann. 16.070. Mississippi, on the other hand, voids such provisions stating that the object of this [legislation] being to make the period of limitations for the various causes of action the same for all litigants. Miss. Code. Ann. 15-1-5; see also Vt. Stat. Ann., tit. 12, 465. This operates to benefit design professionals in responding to owners who demand longer limitations periods. D. Indemnity Indemnification provisions have become common place in most construction related documents. However, almost all states have either enacted legislatively or through court opinions some form of limitations on these contractual indemnity provisions. As discussed above, the vast majority of states have enacted antiindemnity provisions that apply to the design professional. Several others have enacted specific requirements for the indemnity provision to be valid. For example, Florida courts have held that in order for an indemnity provision to be valid under Florida law, the provision must include a monetary limitation that bears a reasonable commercial relationship to the contract and is part of the project specifications or bid documents, if any or it is void and unenforceable. Fla. St. 725.06(1). The requirements of the statute were upheld in Griswold Ready Mix Concrete, Inc. v. Tony Reddick, & Pumpco, Inc., Case No. 1D11-2593, 2012 Fla. App. LEXIS 5600, at *3-4 (Fla. 1st DCA Apr. 12, 2012). Other states permit a party to limit its indemnification obligation to damages arising from its negligence only. For example, in Trung Mai v. Melchiori Constr. Co., 2010 Cal. App. Unpub. LEXIS 7460 (Cal. Ct. App. Sept. 21, 2010), it was held that contract language limiting indemnity obligations to claims arising out of or in connection with [its] operations to be performed under this Agreement... and Subcontractor, however, shall not be obligated under this Agreement to indemnify Owner or Contractor for Claims arising from the sole negligence or willful misconduct of Owner or Contractor... effectively limited that agreement to indemnify the general contractor to damages only for the subcontractor s own negligence. E. Waiver of Subrogation Both standard contract forms as well as individually drafted contracts often contain waiver of subrogation provisions. Several states have determined that the waiver of subrogation clause waives all subrogation rights. The Stop & Shop Supermarket Co. v. ABCO Refrigeration Supply Corp., 842 A.2d 1194, 1198-99 (Conn. Super. Ct. 2003)(holding that the waiver of subrogation provision waived all claims including damage to property not clearly defined as part of the scope of Work); Allianz Ins. Co. of Canada v. TrizecHahn One NY Plaza, L.L.C., No. 03 Civ. 0833, 2005 U.S. Dist. LEXIS 44839, at * 19 (S.D.N.Y. Aug. 15, 2005); Touchet Valley Grain Growers v. Opp & Seibold General Constr., 119 Wn.2d 334, 342 (Wash. 1992) (contract stated subrogation rights are expressly waived... to the extent of insurance coverage on losses arising from or in connection with the Project ); Celina Insurance Co. v. Indianapolis Roofing & Sheet Metal Corp., 953 N.E.2d 679 (Ind. App. 2011); Amico Mut. Ins. Co. v. Bergmeyer Assocs., Inc., Mass. Super. 557; 2008 Mass. Super. LEXIS 84 (Mass. Dist. Ct. 2008). Defending the Design Professional: A Review of Statutory and... Cahill and Haas 11

In contrast, other states permit some claims to move forward despite a waiver of subrogation clause. For example, the Colorado Supreme Court determined that the waiver clause in a construction contract did not bar all claims against the contractors for damages to property that was not defined as being part of the Work under the contract. Copper Mountain, Inc. v. Indus. Sys, Inc., 208 P.3d 692 (Colo. 2009). In Copper Mountin, Copper Mountain, Inc. hired Amako Resort Construction, Inc. to renovate a lodge at its resort. Amako then subcontracted with Industrial Systems, Inc. to build the steel framework for the new addition. A fire started causing damage to the existing portions of the lodge as well as the addition. The court held that the waiver provision applied to claims arising out of damages to the additions (part of the Work ), but not the original lodge (not part of the Work. ). A Texas court has found that an enforceable waiver of subrogation opinion could be determined to be ambiguous when there is an effort to contend that indemnity provisions counter the provision. In Tellepsen Builders, L.P. v. Kendall/Heaton Assocs., Inc., 325 S.W.3d 692 (Tex. App. Houston [1st Dist.] 2010, pet denied), Tellepsen, whose claims were subrogated to Zurich Insurance Company, claimed that it was entitled to reimbursement from its subcontractors for damages it incurred in repairing structural and water damage sustained as a result of construction defects to the Camp Allen Retreat and Conference Center. Tellepsen asserted that the waiver of subrogation provision would render the indemnity provisions meaningless. The court determined that the obligations created in the indemnity portion of the contract would render the clear and enforceable waiver of subrogation provision in the contract as a whole to be ambiguous. IV. Conclusion As set forth above, the design professional has multiple statutory and contractual defenses. By incorporating slight modifications to the standard form contracts, the design professional is able to limit the scope of his liability as well as indemnification obligations. 12 Construction Law Seminar September 2012

CERTIFICATE OF MERIT/STATUTE OF LIMITATION/STATUTE OF REPOSE CHART State Certificate of Merit ( COM ) Required Alabama No. Actions against design professionals is governed by ALA. CODE 6-5-220, et. seq. Alaska No. Actions against design professionals is governed by ALASKA STAT. 09.45.881, et. seq. Arizona Yes. ARIZ REV. STAT. 12-2602 Applicability Filing Deadline Statute of Limitations Architects, contractors, engineers Registered contractor, architect, or engineer Claims against licensed professionals generally. Not applicable. 2 years for property damage and person injuries. ALA. CODE 6-5- 222 Not applicable. 2 years ALASKA STAT. 09.10.070 Claimant s attorney certifies in a written statement filed and served with the claim whether expert testimony is necessary in the case. If expert testimony is necessary, then an expert affidavit is served with the initial disclosure responses. 4 yrs for breach of contract claims ARIZ. REV. STAT. 12-550 Arkansas No. Not applicable. Not applicable. 3 years ARK. CODE ANN. 16-56-105(3). Statute of Repose 7 years from date of substantial completion of the project. 1 ALA. CODE 6-5-222 10 years from date of substantial completion ALASKA STAT. 09.10.055 Statute of repose- 8 years from date of substantial completion. If defect discovered in the 8 th year, suit may be filed up to 9 years after date of substantial completion. ARIZ. REV. STAT. 12-552 5 years after substantial completion for actions 1 Statute of repose is 7 years unless the design profession or builder had actual knowledge of the defect or deficiency and failed to disclose it. 1 02243.154 / 1435951.1 Defending the Design Professional: A Review of Statutory and... Cahill and Haas 13

State Certificate of Merit ( COM ) Required Applicability Filing Deadline Statute of Limitations California Yes. CAL. CIV. PRO. CODE 411.35 2 Colorado Yes. COLO. REV. STAT. 13-20- 602. Architects, engineers and land surveyors All licensed professionals. Certificate executed by attorney must be filed and served on or before the date of service of the complaint. If cannot comply with statute because of limitations issue, certificate must be filed within 60 days after filing the complaint. A certificate of review must be filed within 60 days of service of the lawsuit. The attorney must attest that he consulted with a professional with expertise in the same area 4 years for patent defects CAL. CIV PROC. CODE 337.1 2 years. COLO. REV. STAT. 13-80-102 2 Unless the claim is for res ipsa loquitur or failure to inform of risks of the procedure. Id. 2 02243.154 / 1435951.1 Statute of Repose regarding deficiency in design, supervision and construction; 4 years after substantial completion for personal injury & wrongful death; if plans are provided and not used within 3 yrs, no cause of action exists. ARK. CODE ANN. 16-56-112 10 years for latent defects CAL. CIV PROC. CODE 337.1 Statute of repose is 6 years after substantial completion. If cause of action for personal injury, death or damage to real property arises in the 5 th or 6 th year, an additional two years is provided from the 14 Construction Law Seminar September 2012

State Certificate of Merit ( COM ) Required Applicability Filing Deadline Statute of Limitations as the defendant and that professional determined the claims does not lack substantial justification for bringing the suit. Connecticut No. Not applicable. Not applicable. 3 years CONN. GEN. STAT. 52-577 Delaware No. Not applicable. Not applicable. 3 years DEL. CODE ANN., tit. 10 8106 Florida No, but there is a mandatory presuit notice requirement. FLA. STAT. 558.004 Not applicable. Not applicable. 4 years for patent defects. FLA. STAT. 95.11 Statute of Repose date the injury arises. COLO. REV. STAT. 13-80-104. 7years for architect, professional engineer or land surveyor CONN. GEN. STAT. 52-584a 6 yrs DEL. CODE ANN., tit. 10 8127 10 years after the date of actual possession by the owner, the date of the issuance of a certificate of occupancy, the date of abandonment of construction if not completed, or the date of completion or termination of the contract between the professional engineer, registered architect, or licensed contractor and his or her employer, whichever date is latest. FLA. STAT. 95.11 Georgia Yes. GA. CODE Professional With the complaint, 4 years for damage 8 years after substantial 3 02243.154 / 1435951.1 Defending the Design Professional: A Review of Statutory and... Cahill and Haas 15

State Certificate of Merit ( COM ) Required ANN. 9-11-9.1 engineers, land surveyors, architects. Applicability Filing Deadline Statute of Limitations movant must file an expert affidavit setting forth at least one act of negligence or omission. Deadline extended by 45 days if counsel for plaintiff files affidavit stating that the firm was not retained within 90 days of the filing of the petition. to personalty GA. CODE ANN. 9-3-31 6 years for simple contracts GA. CODE ANN. 9-3-24 2 years for personal injury GA. CODE ANN. 9-3-33 Hawaii No, but there is a mandatory design consultation panel review. HAW. REV. STAT. ANN. 672B-5 and HAW. REV. STAT. ANN. 672E for contractors Not applicable. Not applicable. 2 years HAW. REV. STAT. ANN. 657-8. Idaho No. Not applicable. Not applicable. 2 years for professional malpractice IDAHO CODE ANN. 5-219 5 years for breach of 4 02243.154 / 1435951.1 Statute of Repose completion but extended to 10 years after substantial completion if injury occurred within the 7 th or 8 th years after substantial completion. GA. CODE ANN. 9-3-51 6 years for landsurveyors GA. CODE ANN. 9-3- 30.2 10 years after completion of the project HAW. REV. STAT. ANN. 657-8 6 years from final completion of the project IDAHO CODE ANN. 5-241 16 Construction Law Seminar September 2012

State Certificate of Merit ( COM ) Required Applicability Filing Deadline Statute of Limitations contract IDAHO CODE ANN. 5-216 Illinois No. Not applicable. Not applicable. 4 years 735 ILL. COMP. STAT. ANN. 5/13-214 Indiana No. Not applicable. Not applicable. 2 years for personal injury IND. CODE ANN. 34-11-2-4 10 years for breach of contract IND. CODE ANN. 34-11-2-11 6 years for injury to real property IND. CODE ANN. 34-11- 2-7 Iowa No. Not applicable. Not applicable. 5 years for injury to property IOWA CODE ANN. 614.1 (4) Kansas No, but there is a pre-suit notice requirement. KAN. STAT. ANN. 60-3502 Not applicable. Not applicable. 2 years KAN. STAT. ANN. 60-513 5 02243.154 / 1435951.1 Statute of Repose 10 years unless discovered at end of repose period and then additional 4 years from date of discovery 735 ILL. COMP. STAT. ANN. 5/13-214 10 years after substantial completion or 12 years after submission of plans IND. CODE ANN. 32-30- 1-5 If injury occurs in 9 or 10 yr, then two more years added IND. CODE ANN. 32-30- 1-6 15 years for injury to property IOWA CODE ANN. 614.1 (11) 10 years KAN. STAT. ANN. 60-513 Defending the Design Professional: A Review of Statutory and... Cahill and Haas 17

State Certificate of Merit ( COM ) Required Applicability Filing Deadline Statute of Limitations Kentucky No. Not applicable. Not applicable. 1 year KY. REV. STAT. ANN. 413.245 Louisiana No. Not applicable. Not applicable. 1 year for damage to immovable property. LA. CIV. CODE ANN. 3493 Maine No. Not applicable. Not applicable. 4 years ME. REV. STAT. ANN. tit. 14, 752-A & ME. REV. STAT. ANN. tit. 14, 752-D Maryland Yes; MD. CODE ANN. CTS. & JUD. PROC. 3-2C-02 Profession Engineer, land surveyor or property line surveyor; architect; landscape architect; interior designer MD. CODE ANN. CTS. & JUD. PROC. 3-2C- 01 Within 90 days of the filing of the complaint (land surveyors) 3years from date of injury MD. CODE ANN. CTS. & JUD. PROC. 5-108 6 02243.154 / 1435951.1 Statute of Repose No. 5 years after date of registry of acceptance. If discovered in the 5 th year, one more year to file suit. LA. REV. STAT. ANN. 9:5607 & LA. REV. STAT. ANN. 9:2772 10 years ME. REV. STAT. ANN. tit. 14, 752-A & ME. REV. STAT. ANN. tit. 14, 752-D (land surveyors) 10 years for architect, professional engineer, or contractor MD. CODE ANN. CTS. & JUD. PROC. 5-108 18 Construction Law Seminar September 2012

State Certificate of Merit ( COM ) Required Applicability Filing Deadline Statute of Limitations Massachusetts No. Not applicable. Not applicable. 3 years MASS. ANN. LAWS ch. 260, 2B Michigan No. Not applicable. Not applicable. 2 years for professional malpractice MICH. COMP. LAWS 600.5805 Minnesota Yes. MINN. STAT. 541.42. architect, engineer, land surveyor, or landscape architect licensed or certified under chapter 326 or 326A Served with the pleadings or 90 days after service of the summons. MINN. STAT. 541.42. 2 years MINN. STAT. 541.051 & MINN. STAT. 541.052. Mississippi No. Not applicable. Not applicable. 6 yrs after written acceptance or occupancy MISS. CODE ANN. 15-1-41 Missouri No. Not applicable. Not applicable. 5 years MO. ANN. STAT. 516.120 7 02243.154 / 1435951.1 Statute of Repose 6 years after substantial completion or open to the public MASS. ANN. LAWS ch. 260, 2B 6 years after substantial completion 10 years if gross neg. MICH. COMP. LAWS 600.5839 10 years after substantial completion MINN. STAT. 541.051 & MINN. STAT. 541.052. 6 yrs after written acceptance or occupancy MISS. CODE ANN. 15-1- 41 10 years MO. ANN. STAT. 516.097 & MO. ANN. STAT. 516.098 (land surveyors) Defending the Design Professional: A Review of Statutory and... Cahill and Haas 19

State Certificate of Merit ( COM ) Required Applicability Filing Deadline Statute of Limitations Montana No. Not applicable. Not applicable. 3 years for personal injury MONT. CODE ANN. 27-2-204 2 years for injury to property MONT. CODE ANN. 27-2-207 Nebraska No. Not applicable. Not applicable. 2 years NEB. REV. STAT. Nevada Yes; NEV. REV. STAT. ANN. 40.6884 Profession Engineer, land surveyor; architect; landscape architect Affidavit of attorney with first filed petition attaching a report by the expert unless obtaining report would cause case to be barred by limitations or repose. In this case, affidavit and report must be filed within 45 days after suit filed. ANN. 25-222 4 years for warranty claims NEB. REV. STAT. ANN. 25-223 6 years for breach of contract. 2 years for personal injury. NEV. REV. STAT. ANN. 11.190 New Hampshire No. Not applicable. Not applicable. 3 years N. H. REV. STAT. 8 02243.154 / 1435951.1 Statute of Repose 10 years MONT. CODE ANN. 27-2- 208 10 years NEB. REV. STAT. ANN. 25-222 & NEB. REV. STAT. ANN. 25-223 8 years after substantial completion for latent defects or if discovered in 8 th year, 10 years; 10 years for defects which should have been known; if discovered in 10 th year, then 12 years; 6 years for patent defects, if discovered in 6 th year, then 8 years NEV. REV. STAT. ANN. 11.203-11.205 8 years from the date of substantial completion N. 20 Construction Law Seminar September 2012

State Certificate of Merit ( COM ) Required New Jersey Yes affidavit of lack of care. N.J. STAT. ANN. 2A:53A-27 Applicability Filing Deadline Statute of Limitations Architect, engineer, land surveyor, attorneys, and medical professionals N.J. STAT. ANN. 2A:53A-26 Within 60 days after the filing of the defendant s answer. The court may grant an additional 60 days based upon a finding of good cause. N.J. STAT. ANN. 2A:53A-27. Statute of Repose ANN. 508:4 H. REV. STAT. ANN. 508:4-b 6 years N.J. STAT. ANN. 2A:14-1 New Mexico No. Not applicable. Not applicable. 4 years N.M. STAT. ANN. 37-1-4 New York No. Not applicable. Not applicable. 3 years for professional malpractice N.Y. C.P.L.R. 214. North Carolina No. Not applicable. Not applicable. 3 years generally N.C. GEN. STAT. 1-52 North Dakota No. Not applicable. Not applicable. 6 years for contractual claim N.D. CENT. CODE 28-01-16 2 years for professional malpractice 10 years N.J. STAT. ANN. 2A:14-1.1 & N.J. STAT. ANN. 2A:14-1.3 (land surveyor) 10 years after date of substantial completion N.M. STAT. ANN. 37-1- 27 No true repose statute. 6 years N.C. GEN. STAT. 1-50(a)(5)(a) 10 years (land surveyor) N.C. GEN. STAT. 1-47 10 years; if discovered in 10 th year, then 12 years N.D. CENT. CODE 28-01- 44 9 02243.154 / 1435951.1 Defending the Design Professional: A Review of Statutory and... Cahill and Haas 21

State Certificate of Merit ( COM ) Required Applicability Filing Deadline Statute of Limitations N.D. CENT. CODE 28-01-18 Ohio No. Not applicable. Not applicable. 4 year tort claims OHIO REV. CODE ANN. 2305.09 15 years for breach of contract OHIO REV. CODE ANN. 2305.06 Oklahoma No. Not applicable Not applicable. 2 years for tort OKLA. STAT. ANN. tit. 76, 5.5 Oregon Yes ORE. REV. STAT. ANN. 31.300 Profession Engineer, land surveyor; architect; landscape architect Certification by the attorney must be filed with the original complaint, counter-claim or third-party complaint unless complying with section would cause case to be barred by 2 years ORE. REV. STAT. ANN. 12.110 10 02243.154 / 1435951.1 Statute of Repose 10 years after substantial completion for tort claims OHIO REV. CODE ANN. 2305.131 10 years generally OKLA. STAT. ANN. tit. 12, 109 For personal injury claim occurring in the 5 th year after substantial completion, additional two years to file suit. However, cannot bring personal claim more than 7 years after substantial completion. OKLA. STAT. ANN. tit. 12, 110 10 years for residential & 6 years for commercial ORE. REV. STAT. ANN. 12.135 10 years for land surveyor- ORE. REV. STAT. ANN. 12.280 22 Construction Law Seminar September 2012

State Certificate of Merit ( COM ) Required Pennsylvania Yes PA. R.C.P. No. 1042.3 Applicability Filing Deadline Statute of Limitations Licensed architect, land surveyor, engineer PA. R.C.P. No. 1042.1 limitations. In this case, affidavit and report must be filed within 30 days after the claim is filed. Certification by the attorney must be filed with the complaint or within 60 days after the filing of the complaint Pa. R.C.P. No. 1042.3 Form provided at PA. R.C.P. No. 1042.9 2 years 42 PA. CONS. STAT 5524 Rhode Island No. Not applicable. Not applicable. 3 years for personal injury claims R.I. South Carolina Yes. S.C. CODE ANN. 15-36- 100 Licensed professionals including engineers, land surveyors, and architects With the Original Complaint. If cannot obtain certificate of merit due to limitations issues, an additional 45 days to supplement is permitted under the statute. GEN. LAWS 9-1-14 3 years S.C. CODE ANN. 15-3-530 South Dakota No. Not applicable. Not applicable. 6 years for contractual based claim S.D. CODIFIED LAWS 15-2-13 Tennessee No. Not applicable. Not applicable. 3 years TENN. CODE ANN. 11 02243.154 / 1435951.1 Statute of Repose 12 years 42 PA. CONS. STAT. 5536 42 PA. CONS. STAT 5537 (land surveyor); 12 yrs 42 PA. CONS. STAT. 5538 (landscape architect) 10 years for tort claims R.I. GEN. LAWS 9-1-29 8 years after substantial completion for architects, professional engineers or contractors S.C. CODE ANN. 15-3- 640 10 years S.D. CODIFIED LAWS 15-2A-3 11 yrs if discovered in 10 th yr- S.D. Codified Laws 15-2A-5 4 years after substantial completion Defending the Design Professional: A Review of Statutory and... Cahill and Haas 23

State Certificate of Merit ( COM ) Required Texas Yes; TEX. CIV. PRAC. & REM. Code Ann. 105.002 Applicability Filing Deadline Statute of Limitations Licensed architect, licensed professional engineer, registered professional land surveyor, registered landscape architect, and any firm in which the above practice. With first filed petition unless the limitations period is about to expire within ten days of the filing of the petition and the time constraint prohibits obtaining the COM before filing, then the plaintiff has 30 days from the date of filing the petition to obtain the COM. If not filed, the court must dismiss but can dismiss with or without prejudice. 3 Statute of Repose 28-3-105 TENN. CODE ANN. 28-3- 202 TENN. CODE ANN. 28-3- 2 years for personal injury TEX. CIV. PRAC. & REM. CODE ANN. 16.003 4 years for breach of contract TEX. CIV. PRAC. & REM. CODE ANN. 16.004 Utah No. Not applicable. Not applicable. 6 years. UTAH CODE ANN. 78B-2-225 Vermont No. Not applicable. Not applicable. 6 years 12 VT. STAT. ANN. 511 Virginia No. Not applicable. Not applicable. 2 years VA. CODE ANN. 8.01-248 114 (surveyors) 10 years from date of substantial completion of the property. If written notice sent within 10 years, the limitations period is extended 2 years from the date of notice. TEX. CIV. PRAC. & REM. CODE ANN. 16.008 9 years UTAH CODE ANN. 78B- 2-225 No true statute of repose. 5 years after the performance or furnishing of such services and 3 Sharp Eng g v. Luis, 321 S.W.3d 748 (Tex. App. Houston [14 th Dist.] 2010, no pet.). 12 02243.154 / 1435951.1 24 Construction Law Seminar September 2012

State Certificate of Merit ( COM ) Required Applicability Filing Deadline Statute of Limitations Washington No. Not applicable. Not applicable. 3 years WASH. REV. CODE ANN. 4.16.080 West Virginia No. Not applicable. Not applicable. 2 years Wisconsin No. Not applicable. Not applicable. 6 years Wyoming No. Not applicable. Not applicable. 4 years W. VA. CODE ANN. 55-2-12 WIS. STAT. ANN. 893.52 WYO. STAT. ANN. 1-3-105 13 02243.154 / 1435951.1 Statute of Repose construction. VA. CODE ANN. 8.01-250 6 years WASH. REV. CODE ANN. 4.16.310 10 years W. VA. CODE ANN. 55-2-6a 10 years WIS. STAT. ANN. 893.89 10 years WYO. STAT. ANN. 1-3- 111 Defending the Design Professional: A Review of Statutory and... Cahill and Haas 25

Choose Your Audience Wisely: Effective Techniques for Voir Dire Robert B. Hirschhorn Cathy E. Bennett & Associates Inc. 217 S. Stemmons Suite 203 Lewisville, TX 75067 (972) 434-5879 contact@cebjury.com

Robert B. Hirschhorn is an attorney and jury consultant with Cathy E. Bennett & Associates Inc. in Lewisville, Texas. He travels around the United States, conducting research and picking juries. Mr. Hirschhorn lectures nationwide to lawyers and judges on effective jury selection techniques. He has appeared on Good Morning America, America s Talking, Cochran and Company, Court TV, CNN Morning News, Dateline NBC, MSNBC, 48-Hours, Live, the Nancy Grace Show, the Joy Behar Show, the Oprah Winfrey Show and many other television and radio stations.

Choose Your Audience Wisely: Effective Techniques for Voir Dire Table of Contents I. 76 Jury Selection Tips...31 II. How to Conduct a Meaningful and Effective 30-Minute Voir Dire...40 III. Goals and Practical Tips for Voir Dire...70 IV. A Guide to Analyzing Jury Questionnaires in Civil Cases...100 V. Dos and Don ts of Jury Questionnaires...110 VI. Effective Witness Prep When the Witness is a Lawyer...113 VII. PERSUASION - Arming your Friends, Convincing your Enemies...128 VIII. Using a Questionnaire to Pick a Winning Jury...132 IX. Using Voir Dire to Set the Stage for a Favorable Verdict in your Case...143 X. Win Your Case Before the Trial: Mock Jurors Mirror Actual Jurors in High Profile Case...151 XI. Samples - Challenge for Cause Chart...158 XII. Samples - One-Page Juror Questionnaires...159 Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 29

I. 76 Jury 76 Selection JURY Tips SELECTION TIPS PREPARING FOR JURY SELECTION 1. Voir dire begins the day the client walks through your door. 2. Keep a voir dire notebook. Issues will arise throughout the discovery process that will help you prepare for jury selection. 3. Every case, like every good book, has a trial theme. The purpose of the trial theme is to grab the jury s attention like a newspaper uses headlines to grab the readers attention. 4. Use visual aides in voir dire. Examples would be: Explaining the burden of proof, showing who the parties are, showing a blow-up of the location of the accident, showing examples of some of the questions the jury will be answering during their deliberations, etc. 5. Trilogies are a Powerful, Permanent and Profound communication tool. 6. Determine from the Judge the size of the panel in advance of jury selection. 7. Determine from the Judge or other Court staff how the jurors will be seated in the courtroom and prepare a seating chart. 8. Once you know how many jurors the Judge intends to call, make 8½ x 11" cards that contain the juror numbers. The jurors can hold the cards up when answering questions during voir dire. Have the cards laminated. Consider leaving the cards with the Court once the case is over. 9. Liability juries and damages juries do not look the same. Decide whether you re looking for a liability jury or a damages jury. In our view, it is a fatal mistake to try to combine the two because you ll get the worst of both worlds. 10. No matter how many cases you have tried, there are no two trials that are exactly alike. Therefore, regardless of your experience in front of a jury, practice your voir dire...on lay-people, not your office staff or law partners. 11. Have someone assist you with jury selection. This person will become your eyes and ears. Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 31

12. If a juror questionnaire is used, the lawyer should complete one as well. This is another way to humanize yourself in front of the jury. 13. Try to persuade the Judge to deal with challenges for cause at the end of voir dire as opposed to when they arise. It is always more time efficient to do the challenges for cause at the end of voir dire. 14. If the Judge will not allow the use of a juror questionnaire and intends to place unreasonable time limits on voir dire, prepare a Motion for Additional Time to Conduct Voir Dire. To the author s knowledge, there is not a single published opinion on issue of time limitations in a civil case. DRESSED FOR SUCCESS 15. Remember the wise advice we got from our parents: First impressions are lasting impressions; and, You never get a second chance to make a first impression. You and your client are the center of attention and your goal is to make a favorable and lasting first impression on the jury. 16. Never wear power clothing during voir dire unless you have to give your Opening Statement the same day. Power clothing should be worn when you want the jury to focus their attention on you. Thus, Opening Statements, critical cross-examinations and Closing Arguments are the proper time to wear power clothing. During voir dire, warm and friendly colors should be worn. 17. A trial lawyer should not wear a double-breasted suit. Jurors perceive it as too slick. 18. Male lawyers should not wear clear polish on their nails. Jurors perceive it as too slick. 19. Don t wear: Expensive jewelry, diamonds, pinky rings (or more than one ring on each hand), earrings that dangle, fancy rings, Rolex watches, gold bracelets, etc. 20. All of the tips stated above apply to your clients, their spouses and your witnesses. 21. Never have your client wear new shoes. It is a dead giveaway that you ve told them what to wear. 32 Construction Law Seminar September 2012

22. Research has shown that jurors trust married men who wear wedding bands more than married men who don t wear wedding bands. 23. Tell your clients that they are being observed from the minute they leave their house to the time they get back home. They need to remember to act the same way in the elevator, bathroom and hallways as they do in the courtroom. JUROR QUESTIONNAIRE 24. With a simple and straightforward case, your questionnaire should be no longer than 1 or 2 pages. The more complex the issues and the more time you have to review the questionnaires, the longer the questionnaires can be. 25. Logically organize your questionnaire. The first section should be biographical, the next section should be issue-specific to your case, the third section should be psychological profile questions, and the final section should contain questions to determine any connections jurors have to the parties, lawyers or witnesses and any hardship issues. 26. At least 10% of the questions should be open-ended, 10% should be scaled, and remaining questions on the questionnaire should be the YES NO variety. 27. Every YES NO question should have a follow-up question (i.e., why, please explain your answer, please tell us why you feel this way, etc.). 28. Provide the Court with black ink pens and clipboards for the jurors. 29. Give the Judge a diskette that contains your juror questionnaire. If the Court has to resolve any disagreement on the questionnaire, many Judges will make the changes right on the disk. GENERAL VOIR DIRE PRINCIPLES 30. During voir dire, a lawyer should only have with him/her a seating chart of the jurors and the questions that are going to be asked of the jury. 31. Use your seating chart to address the jurors by name rather than by juror numbers. Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 33

32. Never do your voir dire from behind a podium or counsel table unless required to do so by the Judge or local rule. 33. Don t flirt with jurors. The other jurors will notice it and punish you and your client for it. 34. Studies suggest that most people tend to favor one side over the other. During voir dire, be sure to speak to jurors on both the left and right sides of the courtroom. This also applies to Opening Statements and Closing Arguments. 35. Jurors will remember the first and last things they hear and see. This is known as primacy and recency. Therefore, it is critically important that you start and end your voir dire on strong points. This concept also applies to Opening Statements, examination of witnesses and Closing Arguments. BEGINNING YOUR VOIR DIRE 36. Don t talk like an attorney, talk like a person. 37. Begin your voir dire with your trial theme. 38. Concisely explain your theory of the case in the beginning of voir dire. The theory of the case tells a jury, in a nutshell, why you should win. Reinforce your theory in Opening Statements, examination of witnesses and Closing Arguments. 39. Before you begin questioning the panel, explain to the jurors that when lawyers refer to bias or prejudice, they mean pre-judgement or strong opinions. Tell the jurors that if they have any pre-judgment or strong opinions about any of the issues, to please let you know. 40. Let the jury know that many times jurors want to talk privately about an answer to a question. Tell them if any juror would feel more comfortable sharing an answer in private, that person should simply let you know. 41. Tell the jurors there are no right ore wrong answers. All that you are asking is that the jurors be honest and forthright. Never tell the jurors that you are looking for 12 (or 6),...fair and impartial jurors. This will condition the jurors to give the fair and impartial response rather than the honest response. 42. Tell your panel that, Being a good juror and a good citizen means that if 34 Construction Law Seminar September 2012

this case is not the right one for you to serve on, just let the lawyers and Judge know. 43. Tell the jurors that it s been your experience that many jurors believe that if they don t talk, they won t be selected. Then tell the jurors that the quickest way to be selected is not to say anything. In other words, jurors who talk, walk. Jurors who have nothing to say, stay! 44. At some point during the beginning of voir dire, a lawyer should employ an effective communication technique called self-disclosure. If a lawyer wants (and expects) to learn about his/her jurors, those jurors will feel more comfortable if the lawyer reveals something about herself/himself. THE BODY OF VOIR DIRE 45. If a lawyer has a habit, trait or any other characteristic that is obvious or noticeable (i.e. stuttering, nervousness, sweating, stumbling over words, loud voice, soft voice, object often, bald, overweight, ponytail, etc.), share that up front with the jury. Ask one or two jurors if this habit, etc., will affect them or cause them any discomfort if they serve on the jury in this case. This will eliminate the distraction and allow the juror to focus on the issues. 46. Never be condescending or dismissive to a juror. 47. Your voir dire questions should be short, simple and to the point. 48. Don t ask the same question in voir dire that you ask on the questionnaire. For example, do not ask a juror, Where do you work? or How many children do you have?, when the juror has shared this information on his/her questionnaire. 49. Follow up in voir dire on information you obtain from the questionnaire. 50. Listening is an active skill, not a passive skill. You should focus on the jurors answers and not worry about your next question. 51. If you are representing the Plaintiff in a personal injury case, never end your voir dire by talking about money. Jurors will think you are more interested in money than justice. Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 35

52. Use this as a measuring stick: One open-ended question for every 15 minutes of voir dire. Pick 4 to 6 people to specifically answer the openended question, then go row by row and find out who agrees and who disagrees. 53. Rather than asking people to raise their hands when posing a general question to your panel, pick one juror to get the ball rolling. After that juror answers your question, go row by row and find out, by a show of hands, who agrees and who disagrees. Jurors who often end up serving on a jury are the ones who don t raise their hands...yea or nay. Those are the ones to whom you should go back and talk. Have the person who is helping you give you a list of the jurors who didn t raise their hands. 54. Resist the temptation to stereotype jurors. Jurors will make decisions based on their value system and life experiences. Ask yourself, What kind of life experiences or value system must a juror have in order to be open to the issues in my case? 55. Never ask a juror more than 3 questions on one topic. If you don t reach the point you want to get to, thank the juror and say that you may have some more questions for him/her later. 56. Listen and learn. Let your jurors educate each other. 57. Some jurors constantly volunteer their answers preventing you from visiting with other jurors. Thank the talkative juror and tell him/her you want to hear what he/she has to say, but that you need to visit with a few others on the panel. This will acknowledge that person s interest while allowing you to move on. If the juror has previously said something that would subject him/her to a challenge for cause, tell the juror, If you don t mind, we are going to visit later so we can talk at that time about this issue as well. Is that all right with you? 58. If you are representing the Plaintiff, be sure to anticipate some of the issues the defense will raise to get jurors excused for cause (i.e. sympathy, favoring the underdog, hardship, bad experiences with companies, etc.). 59. If you are representing the Defendant, try to rehabilitate the cause jurors identified by the Plaintiff by explaining the applicable law and find out if the juror s view would prevent him/her from following the law in your case. 60. If a juror gives an answer that is unfavorable or could subject him/her to a 36 Construction Law Seminar September 2012

challenge for cause, thank the juror for being honest, reinforce that everyone is entitled to an opinion and ask the juror if he/she would mind talking about the issue in more detail a little bit later. This approach allows you to bring closure to the issue with that particular juror and it signals to the other jurors that you really do want to know the feelings and opinions of the jurors. 61. Looping is another tool that is critical to effective communication. Looping is when a juror has said something that is extremely helpful to your case. You then want to go to another juror and say, [Juror s name], you just heard Mrs. Jones say that the only way you can get a company to change their attitude is to hit them in the pocketbook. What is your reaction to what Mrs. Jones just said? There are two key components to looping. First, use the name of the juror who gave the answer. The reason you use the name is because it makes the juror feel important or special. Second, repeat the juror s exact words. This will condition the other jurors to this concept. The more times a jury hears something, the more likely they are going to believe it. 62. If in the process of looping, a juror gives an answer you don t like, you can go to the juror who gave the good answer and ask him/her for a response or, you can say to the panel, You see, that s the beauty of the jury system, we are all entitled to our own opinions and beliefs. You heard Mrs. Jones say that companies only get the message when you hit them in the pocketbook, but Mr. Green said that money is not the appropriate answer. I want to see who agrees with Mrs. Jones and who agrees with Mr. Green. Mr. Rodriguez, do you agree with Mrs. Jones or Mr. Green? ENDING YOUR VOIR DIRE 63. Consistent with the primacy / recency notion, you want to end your voir dire strongly. Examples would include questions about corporate responsibility, sending a message to the community, telling a family no if there is no responsibility on the part of the defendant, etc. 64. Another question we like to end with is to ask each and every juror a question such as, [Juror s name], can you look [client s name] in the eye and say, Charlie, I will give you a fair trial. It is simply amazing how jurors will react to such a question. Some jurors will look to the Judge or opposing counsel before answering, other jurors will give an equivocating response. Some jurors will simply say, Yes, and still other jurors will look your client right in the eye and say, Charlie, I will give you a fair trial. Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 37

65. We have dubbed the final questions in voir dire the, Oyster questions. By that we mean, you have to shuck a bunch of oysters before you find a pearl. The same holds true with these concluding questions: Is there anything else you want to tell us or you feel we should know? ; Is there any other reason why you might not be a totally fair and impartial juror in a case like this? ; Now that you have had a few hours (or overnight) to think about the issues in this case, is there anyone on the panel who feels they might be starting out this case favoring one side or the other, or who feels for whatever reason that they would not be totally fair, please raise your hand and let me know. ; or, Is there anyone who is sitting and thinking, You know, if the lawyer had only asked me this question, he really would have found out something important about me. CHALLENGE FOR CAUSE 66. When a juror gives an answer that could well be a challenge for cause, thank the juror for his/her honesty and then say, [Juror s name], is it okay with you if we visit (talk) some more about this later? 67. When a juror has expressed a strong opinion that gives rise to a challenge for cause, ask the juror: 1) [Juror s name], would it be fair to say that this is a strong opinion you have about this issue? and, 2) You d agree with me that you have had this opinion or feeling for quite some time? 68. When doing your challenges for cause, start by repeating the juror s answer and then ask why he/she feels this way. This should be the only time you ask an open-ended question in a challenge for cause. 69. When doing your challenge for cause, always ask closed-ended questions. 70. Do an analogy such as this: [Juror s name], given the opinions you ve shared with us, would it be fair to say that if this were a race, we would not be starting off even with the other side, that we would be starting a little behind? 71. Conclude the challenge for cause questioning by asking the juror this final question: Given the what you have just shared with us, do you mind if I ask the judge to excuse you from serving as a juror in this case? 38 Construction Law Seminar September 2012

72. Always remember you are questioning a juror and not a witness. You never want a juror to feel as if he/she is being cross-examined, since the jury has the final say in the case. Some of your challenges for cause will be denied and if you don t have enough peremptory strikes, that juror could very well end up serving on the case. MISCELLANEOUS TIPS 73. Resist the temptation of saying to the jury: I take it from your silence... ; Can every member of the jury panel promise me that... ; Does anyone have a problem with... and, Does anyone on the panel have any feelings about.... 74. Humanize your client, even if you represent a corporation. Never refer to your client as...the Plaintiff (the Defendant) or,...my client. 75. Listen for jurors who use equivocating phrases such as I think, I ll try, I hope, I believe, etc. While some jurors simply talk in this manner, many other jurors will be expressing actual hesitation about the case when they use such equivocating words. When you hear a juror express hesitation, be certain to follow-up on the words used by the juror. 76. Do not argue with a juror. It will send a very negative message to the other jurors. Thus, while you can use a challenge for cause or peremptory strike to get rid of that juror, other jurors will remember and resent you for arguing with the juror, especially if the juror s position seemed somewhat reasonable. Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 39

II. How to Conduct a Meaningful and Effective 30-Minute Voir Dire HOW TO CONDUCT A MEANINGFUL AND EFFECTIVE 30-MINUTE VOIR DIRE I. INTRODUCTION Counsel, approach the bench, the Trial Judge says in a stern and controlling tone of voice. The lawyers know what is coming. It is my intent, the Judge begins, to limit the voir dire to thirty minutes per side. But Judge... counsel attempts to interrupt, but the plea falls upon deaf ears. Counsel, this is not a complicated case, and thirty minutes per side should be more than sufficient time to conduct voir dire. Bailiff, bring in the jury panel. In courtrooms all across the state, lawyers are hearing these words with alarming frequency. When conducting the research in preparation for this article, we were stunned to find little or no case law in civil cases on the issue of court imposed time limitations on voir dire. Many civil courts impose time limitations, yet few lawyers fight the limitations, properly preserve the issue or take it up on appeal. There is, however, a substantial body of case law on this issue in criminal cases. If counsel is of the opinion that thirty (30) minutes is unreasonable, it is imperative that a proper appellate record be made. This article will address the various issues associated with this dilemma, and provide counsel with a methodology for conducting a meaningful and effective 30-minute voir dire. 40 Construction Law Seminar September 2012

II. PRE-TRIAL STRATEGY A. MOTION FOR ADDITIONAL TIME TO CONDUCT VOIR DIRE During the past decade, more and more judges have been imposing time limitations on voir dire. Counsel must anticipate this potential problem and contact the Court at least thirty (30) days before trial to determine the policy of the Judge regarding whether counsel s time will be limited in voir dire. If a colleague has recently tried a case before the Judge, find out how much time was allowed for voir dire. Has the Judge ever allowed more time in other cases? Do other judges in the jurisdiction allow more time for voir dire? Armed with such information, a lawyer should prepare a Motion for Additional Time to Conduct Voir Dire. A sample Motion and Memorandum, taken from Bennett s Guide to Jury Selection in Civil and Criminal Litigation (West Publishing Company), is attached as Appendix 1 to this article. As part of the Motion, include citations to other cases where your judge, or other judges in the jurisdiction, have allowed more time for voir dire. As part of the citation, include the following: 1.) The style of the case; 2.) Issues in controversy (i.e., breach of contract, product liability, personal injury, etc.); 3.) The date the case was tried; and, 4.) The amount of time given for voir dire. Determine if affidavits can be obtained from lawyers who will say that thirty minutes is not sufficient to conduct voir dire in this type of case. Affidavits from former judges, people who have previously served as jurors, or jury consultants should be considered. Remember, the goal of the lawyer is to persuade the Judge and/or to make a full, complete and compelling appellate record. B. MOTION FOR JURY QUESTIONNAIRE The number of judges who will limit voir dire to thirty (30) minutes is growing. On a more positive note, the number of judges who will allow a juror questionnaire is likewise increasing. If the Judge intends to severely restrict the time allotted for voir dire, it is imperative that a Motion for a Juror Questionnaire be filed. There are three keys to persuading a judge to use a questionnaire: 1. Questionnaires are granted in the vast majority of cases where the parties jointly move and agree upon the questionnaire s content; 2. All logistical problems associated with a questionnaire must be removed from the over-worked and under-paid court staff. That is, the attorney must be responsible for the preparation, administration, copying, and dissemination of the completed questionnaires. The Court Clerk should only be responsible for handing out the questionnaire to the potential jurors, collecting them once they are filled out, and making sure the originals are maintained and made part of the record; and, 3. Keep it short, to the point and fair to both sides. In a typical case, the questionnaire should not exceed three (3) pages. In more complex cases, the goal should be to have no more that five (5) pages. Rarely should a questionnaire exceed ten (10) pages. A sample questionnaire is attached to this article as Appendix 2. Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 41-16-

If the Judge has used questionnaires in other cases, obtain copies of them to get a sense of the type and length of questionnaire the Judge has found acceptable. Furthermore, just because a judge has never used a questionnaire in the past, do not assume that the judge will not allow one to be used. For a more thorough discussion on questionnaires, we would call the reader s attention to our book, Bennett s Guide to Jury Selection and Trial Dynamics in Civil and Criminal Litigation, West Publishing Company, 1993 (Updated 1995). C. REQUEST THAT COURT ASK QUALIFYING QUESTIONS When the Judge has severely restricted the time for conducting voir dire, it is essential that the attorney go right to the core of his/her jury issues. There are certain preliminary questions that counsel should consider having the Court inquire of the jury panel. 1. MINIMUM QUALIFICATIONS Section 62.102 of the Texas Government Code sets forth the minimal requirements that a potential juror must meet: a. 18 years of age; b. Resident of the County and State of Texas; c. Qualified to vote; d. Sound mind and good moral character; e. 1 Is able to read and write ; f. Not convicted of a felony; and, g. Not accused of misdemeanor theft or any felony. Presumably, when the jurors were in the general assembly room, the issue of minimum qualifications was raised and resolved by the Clerk or Presiding Judge. On many occasions we have seen non-qualified jurors on our panels. Either the qualifying questions were not asked or the juror didn t or couldn t respond. Since an attorney is absolutely entitled to challenge for cause any juror who is not statutorily qualified, he/she should encourage the Judge to ask the Section 62.102 questions. If the lawyer has limited time, he/she should not be required to use that time for the purpose of determining if the juror is statutorily qualified. We should note that many counties send prospective jurors a juror information card. Many of the qualifying questions are contained on the completed juror information card. In that event, request that the Judge ask only those questions not contained on the juror information card. 1 Section 62.103(a) of the Texas Government Code gives the trial court discretion to overlook this requirement. See, Mercy Hospital of Laredo v. Rios, 776 S.W.2d 626 (4th Court of Appeals, 1989, writ denied) 42 Construction Law Seminar September 2012-17-

2. DISQUALIFIED Articles 62.104(b), 62.1041, and 62.105 of the Texas Government Code set forth the criteria that may subject the juror to disqualification. a. 62.104(b) and 62.1041: Legal blindness or deafness may disqualify the potential juror if the Court determines the juror to be unfit. b. 62.105: A potential juror is disqualified if the juror: i. Is a witness in the case; ii. Is interested directly or indirectly in the subject matter of the case; iii. Is related by consanguinity or affinity within the third iv. degree to any party in the case; Has a bias or prejudice in favor of or against a party in the case; or, v. Has served as a petit juror in a former trial of the same case or in another case involving the same questions of fact. 3. EXEMPT Section 62.106 of the Texas Government Code lists those jurors who may be exempt from jury service if the juror chooses to invoke such exemption: a. Over the age of 70; b. Has legal custody of a child under the age of 10 and jury service will leave the child without adequate supervision; c. Is a student in a public or private secondary school; d. Is enrolled and is attending an institution of higher learning; e. Is an officer or employee of the legislative branch of the state government; f. Has served as a juror within the past twenty-four (24) months; or, g. Is the primary care giver for a person who is an invalid unable to care for him/herself. Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 43-18-

D. OTHER PRELIMINARY MATTERS In addition to the areas outlined above, there are several other areas the attorney should consider asking the Judge to inquire of potential jurors: 1. Know, heard of, worked with, hired, or done business with any of the attorneys, parties or witnesses; 2. Do any of the jurors own stock in the Plaintiff s or Defendant s companies; 2 3. Have any of the jurors heard or read about the case; 4. Do any of the jurors have a prepaid vacation scheduled during the anticipated time of the trial; 5. Would jury service cause a severe financial hardship for any of the jurors; 6. Do any of the jurors have a medical problem or condition that would affect their ability to serve as a juror; or, 7. Basic background information if juror information cards are not provided. E. REQUEST THAT CHALLENGE FOR CAUSE QUESTIONING BE TAKEN UP AT THE CONCLUSION OF VOIR DIRE Challenges for cause can consume a great deal of time in any voir dire. In a thirty (30) minute voir dire, proper time management is critical. If an attorney has one or two jurors who give answers that suggest further questioning is necessary to determine if a challenge for cause is appropriate, the questioning process can consume precious time. Therefore, we encourage lawyers to ask the Judge if further challenge for cause questioning can be taken up at the end of the entire voir dire. We are finding that many judges throughout the State of Texas employ this method. From the lawyer s perspective, there are three essential reasons why challenge for cause questioning should be taken up at the end of voir dire outside the presence and hearing of the other jurors: 1. It allows for the maximum use of the attorney s time during voir dire and does not interrupt his/her flow; 2. If the attorney has a talkative juror who is subject to a challenge for cause on one issue and the juror wants to assert his/her view on another issue, the attorney can be polite and not offend the juror by saying, [Juror s Name], I know I am cutting you off, but we will be talking with the Judge a little later. ; and, 3. By doing the challenge for cause at the end, the attorney knows, and more importantly, the Judge knows, exactly how many jurors are being challenged, how many unchallenged jurors are left, and which of the challenged jurors are most likely to be excused for cause. 2 An affirmative answer would disqualify the juror. 930 (Tex. Civ. App. - Tyler, 1966) 44 Construction Law Seminar September 2012 See, Texas Power and Light v. Adams, 404 S.W.2d -19-

There are many inherent problems with the challenge-for-cause-as-you-go approach. For example, challenge for cause may not be time efficient, other jurors may get bored, qualified jurors may learn how to disqualify themselves, many cases get reversed because the judge doesn t grant an early challenge for cause for fear there will not be enough jurors left, etc. Therefore, counsel would be well-served in a thirty (30) minute voir dire to ask the court to allow the additional challenge for cause questioning to occur at the end of voir dire. F. PRESERVING ERROR FOR TIME LIMIT RESTRICTIONS To preserve this issue for appeal, counsel should follow the test set forth by the Court of Criminal Appeals in Ratliff v. State, 690 S.W.2d 597 (Tex. Crim. App. 1985). It is essentially a three-tiered process: 1. Counsel did not prolong voir dire by asking irrelevant, immaterial or superfluous questions; 2. Questions that counsel sought to ask were proper voir dire inquiries; and, 3. The jury included venire members whom counsel was not allowed to examine. The authors believe that this is a reasonable and rational test and that when the issue is finally addressed by the Texas Supreme Court, this test (or one substantially similar) will be adopted. When making a record, counsel must be mindful of the following: 1. Resist the temptation to use the bulk of time in voir dire telling the panel about the facts and issues. Instead, ask the jurors meaningful and relevant questions; 2. Prior to jury selection, make a list of five (5) to ten (10) proper voir dire questions. When informed by the Judge that time has expired, approach the bench and ask for additional time. If that request is denied, dictate into the record the five (5) to ten (10) questions which were intended to be asked but, due to time limitations, were not; 3. Be certain that the questions dictated into the record are: a.) proper and appropriate to the case; b.) not covered in one s own voir dire; or, c.) not thoroughly explored during opposing counsel s voir dire or the voir dire conducted by the Court; and, 4. Once the jury has been selected, but before they are sworn in, approach the bench and state for the record those jurors who are seated on the jury and were not asked any questions due to insufficient time. Our experience has shown that when an attorney makes it clear to the Court that he/she is taking the time to adequately make an appellate record on the time limitation issue, the Court will often give the attorney additional time to conduct voir dire rather than run the risk of being reversed on appeal. Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 45-20-

III. TRIAL STRATEGY A. THINK ABOUT VOIR DIRE EARLY AND OFTEN The initial interview is the one time during the case when the attorney will be in the same shoes as the potential jurors. An attorney s perception of the case and the issues may be very similar to what the jurors may be thinking and feeling. As the client is telling you about the case for the first time, ask yourself these questions: 1. What are the jury issues in this case? 2. What questions do I have about this case? 3. What portions of the case are unclear? When jurors first hear about the case in voir dire, they will conduct a similar analysis and evaluation. As the case unfolds during discovery, depositions and subsequent meetings with the client or witnesses, issues of fact and law are constantly being developed. Start framing these issues in the form of voir dire questions. Concentrate on questions that help your case, as well as those questions that must be asked to defuse potential problems. For example, in a personal injury case assume the Plaintiff has a previous medical condition. From the Defendant s perspective, this will be viewed as a helpful fact. From the Plaintiff s perspective, this is a potential problem that must be discussed and diffused during voir dire. By using this develop-voir-dire-as-the-case-unfolds approach, the attorney is frequently identifying issues, writing a few voir dire questions at a time, and putting them in the voir dire file or trial notebook. Once discovery is completed, the attorney is in a position to go through the voir dire questions he/she has accumulated and can begin the process of prioritizing the issues that need to be covered and the voir dire questions that will accomplish that goal. 46 Construction Law Seminar September 2012-21-

B. LEARN, DON T TEACH It is human nature for an attorney who has spent months preparing a case to want to convince everyone in the courtroom that his or her position is the correct one, and that the client is deserving of a favorable verdict. Potential jurors come to the courtroom with a mind set that has developed over the span of many years, and seldom (if ever) will an attorney change a juror s mind. In fact, it is rare to change a person s mind and futile to try to change a person s heart. We suggest that no valuable time be wasted trying to convince anyone to change. Attempting to convince jurors to change will only alienate them, shut down any possible dialogue, and encourage arguments, one-upmanship or lying. It is the wise attorney who listens to the jurors and learns from them. The attorney who asks jurors questions with an I-want-to-learn-from-you attitude will find that jurors are more willing to share their feelings or opinions when there is no threat of a challenge or criticism. These jurors will provide the information with which an attorney can make meaningful challenges for cause and educated peremptory strikes, all the while encouraging the other panel members to share their opinions or feelings because it is safe to do so. C. CONCENTRATE ON THE FIRST TWENTY-FOUR (24) JURORS With voir dire time strictly limited, it is important not to use valuable time talking to jurors who will never sit on the panel. Limit questions to the first twenty-four (24) 3 jurors. If some of the first twenty-four (24) jurors will be subject to a challenge for cause, talk to a sufficient number of jurors past juror number 24. For example, if you feel that four (4) jurors may be subject to a challenge for cause, then talk to jurors through number 28. The exception to this is if there is an expert who can educate the panel on a very important point and whose number is beyond 24. Otherwise, there is no benefit, and valuable voir dire time that could be used getting to know potential jurors will be wasted. 3 The number of twenty-four (24) was determined as follows: a.) 12-person jury; b.) Plaintiff is entitled to six (6) peremptory strikes; and, c.) the Defendant is entitled to six (6) peremptory strikes. If the numbers are adjusted (i.e., county court, multiple parties, additional peremptory strikes granted, or alternates used), one should adjust the last number of the juror with whom one speaks accordingly. Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 47-22-

D. ORDERING TOPICS Carefully consider the order in which topics are to be presented during voir dire. We encourage attorneys to design their voir dire order to be consistent with the primacy/recency theory: jurors will remember the first and last thing they are told. By following this approach, the attorney is emphasizing the strongest aspects of the case first and last, and diffusing issues and concerns in the middle. With this thought in mind, how do we apply this in a thirty (30) minute voir dire? We would recommend that the attorney divide the voir dire as follows: 1. Introduction Two (2) minutes 2. Overview of Case Three (3) minutes 3. Strong Topic Five (5) minutes 4. Areas of Concern Ten (10) minutes 5. Strongest Topic(s) Eight (8) minutes 6. Conclusion Two (2) minutes Following this format and employing the techniques contained in this article (looping, 3- question rule, closure question, etc.), an attorney can generate a reasonable amount of information on the jurors in just thirty (30) minutes. E. STARTING YOUR VOIR DIRE The very first part of the voir dire process we call the Introductory Phase. The purpose of the Introductory Phase of voir dire is to set the tone and mood for the trial. Properly setting the tone for a case is critical if an attorney wants to conduct an effective voir dire. Remember our fundamental rule of voir dire: LEARN, DON T TEACH. By allowing the prospective jurors to verbalize their opinions, attitudes and feelings, the jurors will teach each other and the attorney will be able to intelligently exercise challenges for cause and peremptory strikes. The key is getting the jurors to open up, and that is accomplished by properly setting the tone. Let s examine the way many lawyers start their voir dire. It often begins something like this: Good morning ladies and gentlemen. My name is Robert Smith, and I am the attorney who represents the Plaintiff in this cause of action. This is the voir dire phase of the trial. The words, voir dire, are French, and mean, to speak the truth. During this process, I will be asking you questions so we can find twelve fair and impartial jurors. This is a typical introduction. These words, or words very similar to them, can be heard every Monday morning in courtrooms throughout the State of Texas. The only effective portion of this typical introduction is the first sentence, Good morning ladies and gentlemen. The rest is wholly ineffective and counter-productive, especially when only 30 minutes is allowed for voir dire. Let s analyze the problems: 48 Construction Law Seminar September 2012-23-

1. My name is Robert Smith, and I am the attorney who represents the Plaintiff in this cause of action. This entire sentence is flawed. The Judge just introduced Mr. Smith, the jurors know he is an attorney, the client has been dehumanized by being referred to as the Plaintiff, and the sentence concludes with lawyertalk (...this cause of action. ). Right off the bat, many jurors feel the lawyer is wasting time or talking in a condescending manner. Why would a lawyer want the jurors to remember his name, yet not even say his client s name? Instead, the first sentence out of a lawyer s mouth should grip the jury with the importance of the case. 2. This is the voir dire phase of the trial. The concept is correct, but the delivery is not effective. The jurors know, either by prior jury experience, television or talking with other jurors in the jury assembly room, that the first part of the trial is jury selection. Lawyers must resist the temptation to begin jury selection with words or phrases with which jurors are unfamiliar (i.e., cause of action, voir dire, etc.). 3. The words, voir dire, are French, and mean, to speak the truth. Who cares? Have you ever been at a cocktail party and been asked, I ve been wondering, what do the words voir dire mean? No, instead people at cocktail parties want to know, How can you represent someone who is guilty? Why do lawyers inundate our system with frivolous lawsuits? How in the world could a jury award millions for spilling a little hot coffee? These are more substantive, probing and problematic areas that require our attention. Therefore, resist the teaching mode (...voir dire means... ), and focus on identifying the critical areas of inquiry and formulating open-ended questions that will probe the juror s opinion, attitudes and feelings about the central issues. 4. During this process I will be asking you questions so we can find twelve fair and impartial jurors. In our opinion, this is the single most damaging and destructive sentence of the entire introduction because it will condition jurors to give responses that are perceived as, fair and impartial. Lawyer Smith is sending the jury a mixed message. On one hand, he has told the jury to be truthful and, on the other hand, he is saying the only good juror is the one who appears to be fair and impartial. Such a statement provokes the jurors to give responses that create the impression of fair and impartial, not necessarily truthful; that the appearance of impartiality is far more important than the truth. Therefore, in the typical voir dire the lawyer has conditioned the jurors to give appropriate, and not necessarily honest, responses to the questions asked. Our goal is to obtain honest, albeit at times painful, responses. Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn -24-49

With these thoughts in mind, we encourage lawyers to set the tone in the following way: Good morning ladies and gentlemen. I am proud to stand here with [Client s name] and have twelve of you decide this very important 4 case. In this part of the trial, we need to find out your feelings, impressions or opinions about the issues in this case. I want you to know that there are no right or wrong answers. We will be honest with you and we ask that you be as honest as you can with us. This introduction is substantively the same, but it sets a much more honest and open tone. 5 There is a lot more a lawyer can say at this point. With a thirty-minute voir dire it is necessary to set the tone, do a brief overview of the case and get right to the questions. F. OVERVIEW OF THE CASE An attorney has the right to give a brief overview of the case to the jurors. Texas Rule of Civil Procedure 265(a) allows the attorney to,...state to the jury briefly the nature of the claim or defense and what the party expects to prove. [emphasis supplied] In Powers v. Ohio, 499 U.S. 400, 114 L.Ed.2d 660, 111 S.Ct. 1364 (1991), the United States Supreme Court held,...the voir dire phase of the trial is the juror s first introduction to the substantive factual and legal issues in a case. Id. at p. 1371. In our experience, the brief overview has often turned into the entire voir dire, with a few ineffective closed-ended voir dire questions thrown in during the process. The danger of the brief overview consuming the entire voir dire is especially great in the thirty (30) minute time limit setting. This type of voir dire is essentially a Pre- Opening Statement, is not persuasive, elicits little or no information upon which to base challenges for cause or peremptory strikes, and, in our opinion, is the primary reason many judges now impose time limits. During voir dire, an attorney must vigilantly resist the temptation to take charge and do all the talking. Remember our message: listen, don t teach; learn, don t lecture; colloquy not soliloquy. Therefore limit the overview in the thirty (30) minute voir dire to 3-5 minutes and then go directly into a questioning mode. 4 In the introduction, there is a constant reference to we. The we includes the lawyer(s), as well as the client. It is important to refer to we early and often. Hopefully, by the end of the case the we will encompass the lawyer, the client and the jury. 5 One point worth mentioning is that if there are any sensitive or potentially embarrassing issues which the jurors will be asked to discuss, the attorney may want to say, Before I begin asking questions, I want to tell you that some of the questions are in areas you might consider private, sensitive or embarrassing. If you would feel more comfortable answering any question in private, please let me know and I m sure Judge Goodperson will let us talk privately. 50 Construction Law Seminar September 2012-25-

G. THREE TO FIVE TOPICS In a time-limited voir dire, it is critical that topics are limited to a few of the most important case issues. We recommend limiting voir dire to three to five of the most important areas of the case and fully discussing these topics with as many jurors as possible. The more an attorney talks to a juror the more the juror is likely to open up and respond with his/her true opinions or feelings. By touching on a few meaningful areas, the chances are increased that jurors will want to expound on their answers. H. TALK TO EIGHT (8) JURORS PER TOPIC Limiting the number of topics presented to potential jurors increases the number of jurors with whom the lawyer can talk about each subject. It is important to talk to as many jurors as possible in order flush out the bad jurors and to have the good jurors educate the rest of the panel. By allowing as many as eight jurors to talk on a topic, the attorney will have established a rapport with at least the first twenty-four (24) jurors, and have provided the panel with the views of many of their fellow jurors on a variety of subjects. Additionally, talking to as many as eight jurors per topic allows the jurors to do the talking which, in turn, may actually encourage the Court to extend the voir dire time. I. ASK A JUROR NO MORE THAN THREE QUESTIONS AT A TIME It is important to remember that while encouraging the jurors to talk, a lawyer does not spend too much time with the same juror. We recommend asking the same juror no more than three questions at one time. Asking the same juror too many questions at once may make the other prospective jurors feel slighted or ignored. The attorney also faces the danger of asking one question too many and making a juror feel like he or she is being cross-examined or put on trial thus causing the juror to become defensive or embarrassed. Too many questions may encourage a juror to react negatively or show off and speak out just to get attention. Remember, ask a juror three questions and move on to other jurors. If needed, one can always come back and ask the juror another question or two. J. LOOPING One of the most powerful and effective voir dire techniques is called looping. Looping is a technique whereby an attorney asks one potential juror a specific question and the juror responds. The lawyer then uses the juror s name, repeats the juror s exact words, and then asks another juror for a reaction to what the first juror said. A 6 third juror is then asked to respond to the answers given by the first two jurors, repeating their answers exactly and always using their names. The benefit of this method has many facets. The jurors are educating each other rather than the panel hearing the propaganda of the lawyers. By repeating the juror s exact words, any juror who disagrees is, essentially, disagreeing with another 6 We have referred to this as the double loop. Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 51-26-

panel member and not the attorney. Using the jurors names compliments the jurors who have spent all day being treated as nameless and faceless entities, and the attorney becomes the one person who has recognized the jurors as people. The jurors will feel that they are held in positive regard and that their answers are valued. This technique makes the jurors more likely to share honest feelings and opinions, and is the single greatest tool in encouraging a roomful of strangers to talk about their honest opinions or feelings. Looping is also an effective way to deal with bad answers. Following a bad answer, a lawyer should thank and praise the juror for the answer. The attorney should explain to the juror and the entire panel that the purpose of voir dire is to learn what people s opinions and feelings about certain subjects are, that the beauty of our system is that everyone is entitled to their opinions, and that there are no right or wrong answers, just honest ones. The attorney can then determine how many jurors agree or disagree with the view expressed by that particular juror. Jurors who share a similar opinion or feeling can be identified. Once the attorney has determined this group of potentially bad jurors, he or she can then focus on jurors who are good on this issue [i.e. they disagree with the previous (and bad) answer]. Opposing viewpoints can then be discussed. By handling a bad answer in this manner, the lawyer has identified potential problem jurors, maintained or increased credibility, encouraged further candor from the jurors, and has once again segued back to positive ground by having the good jurors educate the panel. K. THE THREE E s As explained earlier, far too many attorneys begin the jury selection process by explaining to the panel that voir dire is derived from a French term meaning to speak the truth. We suggest that voir dire is more than this. Voir dire is an invaluable time during which lawyers should concentrate on what we refer to as the three E s : 1.) Elicit information; 2.) Establish rapport; and, 3.) Educate by having the jurors teach each other. To elicit information from potential jurors, lawyers must first make it easy for the jurors to open up and share important and personal information. Therefore, we suggest lawyers open lines of communication by briefly sharing important and personal information about themselves. We call this self-disclosure. If an attorney wants jurors to share personal information, he/she must be ready, willing and able to do the same. Rapport means harmony, understanding and camaraderie. Rapport is established between an attorney and a jury by asking meaningful questions and not being judgmental. Establishing rapport with the jurors is another powerful tool of an effective voir dire. After all is said and done in a close case the jury usually listens to, remembers, and ultimately sides with, the lawyer with whom they have formed a bond. As with any relationship, the foundation of the relationship built between an attorney and his/her jurors begins with honesty and trust. The jurors will feel that if the lawyer was honest and trusting enough to share the case with them (warts and all), the lawyer will be truthful throughout the presentation of the case. For the attorney, the reward for this veracity comes when the jurors respond honestly and candidly. 52 Construction Law Seminar September 2012-27-

Educating the panel is a critical aspect of an effective voir dire and should be done by other members of the panel rather than the lawyer. A lawyer should ask openended questions which will require jurors to talk about any experience or knowledge in a particular area connected to the case. The panel will more likely believe and remember information and knowledge shared with them by one of their peers, than they will if that same information comes from the attorney. L. CLOSURE QUESTION As a general rule, we do not advocate asking general questions to the entire venire. Many times, when a probing and meaningful question is asked in a group setting, jurors are reluctant to answer. For example, in this day and age many potential jurors have opinions and feelings on punitive damages, frivolous lawsuits, and the awarding of money for pain and suffering or mental anguish. Too many times we have heard a lawyer say to the jury panel, Does any member of the jury panel have feelings or opinions about awarding money for pain and suffering? We know that many jurors have strong feelings and opinions on this topic and will usually share this information when asked on an individual basis. What often happens in a group setting is that no one will raise their hand. General questions to the panel will only encourage the most outspoken jurors to participate. These jurors are just looking for the opportunity to speak their minds. Our goal is to get the other jurors to talk. Therefore, we recommend that an attorney ask specific jurors specific questions until such time as the attorney is ready to bring the topic to a conclusion. That is the time to ask the entire venire the closure question, We have heard quite a few of your fellow jurors say they feel a person should be entitled to money for mental anguish. Are there any members of the jury panel who feel differently or disagree? There is nothing wrong with disagreeing, but we need to know, so please raise your hand. Conversely, if the prior jurors said that a person should not be awarded money for mental anguish, it would be time to ask a series of questions in the following manner: Before we leave this topic, I need to ask you as a group, how many of you agree and disagree with Mr. Gray and Ms. Dodson. First, how many jurors agree? Please raise your hands. After recording the names and numbers of the jurors who disagree, ask: How many jurors disagree with Mr. Gray and Ms. Dodson? Again, record the jurors names and numbers. This time go back and ask these jurors why they disagree. This will reinforce the third prong (self-education) of our Three E s theory. say: Finally, some jurors will not raise their hands at all. Pick two or three jurors and [Juror s Name], I noticed that you didn t raise your hand. What is your feeling or opinion about compensating a person for mental anguish? Flushing out that information brings closure to the topic. It is time to segue into the next area by saying to the panel, Now I want to ask you some questions about [new topic]. Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn -28-53

M. THREE VOIR DIRE PROBLEMS - MOST JURORS DON T TALK; A FEW TALK TOO MUCH; SOME DON T TELL THE TRUTH! Our company (Cathy E. Bennett & Associates, Inc.) has been assisting lawyers with jury selection for twenty-two (22) years. During the hundreds of trials in which we have participated, we have identified three fundamental problems with voir dire: 1. Jurors don t talk; 2. A few jurors talk too much; and, 3. Some jurors don t tell the truth! The best trial lawyers have come to the conclusion that the most effective voir dire occurs when it is the jurors who do most of the talking. Most of the commentators and pundits assert that voir dire is an opportunity for the lawyer to persuade the jurors. In our view, an effective voir dire is an opportunity for the jurors to persuade each other on the merits of the case. 7 A key ingredient in solving the first problem is to properly set the tone, and then directs specific questions to specific jurors. The second problem is minimized when an attorney uses this interactive approach to voir dire. There are three options available for handling a juror who constantly raises his/her hand and volunteers information: 1. If the information is helpful, let the juror talk and then use the information by looping; 8 2. If the information identifies the juror as a potential challenge for cause (or peremptory strike), say to the juror, [Juror s name], I appreciate your answer. If it is okay with you, we would like to talk to you later in more detail with the Judge. This way, when the juror subsequently raises his/her hand, the answer can be cut off by saying, [Juror s Name], we ll talk to you about this as well, then move on to another juror; and, 3. If the juror is a potential strike and is deep in the panel and may not be reached say, [Juror s Name], as you can tell, the Judge has brought in more jurors than we will need. What I am saying is that we will probably not get to you. However, I appreciate your raising your hand, and if we think we may reach you, I will come back to you. The attorney is then free to go on to another juror, has eliminated the problem, and has not alienated the juror (or any other of the other jurors) in the process. The third problem (jurors who don t tell the truth) requires an understanding of why the juror is not being candid. Some of the reasons why this occurs are because: 1. The juror is afraid of being stigmatized; 2. The juror s feelings conflict with his/her self-perception; 3. The juror has an agenda; or, 4. The juror would rather avoid the issue than confront it. 7 The tone is set in the Introductory phase of voir dire. (See the heading entitled, Starting Your Voir Dire. ) Our method is to tell the jurors that there are no right or wrong answers, only honest ones and that the lawyer will ask questions and not give speeches or lecture to the jury. 8 For more information on this concept, see the heading entitled, Looping. 54 Construction Law Seminar September 2012-29-

Being a good listener and carefully observing the juror s non-verbal communication will help the lawyer identify those jurors who are not being candid. The attorney (or the consultant) must try and identify why the juror is reluctant to be honest. An empathetic approach may flush out the answer. The lawyer should consider asking such questions as: 1. I sense some hesitation in your answer. It is absolutely okay to have some hesitations or reservations; I just need to know; 2. How would you feel if you were chosen to be on this jury; 3. Have you ever held a different view on this issue; or, 4. What is another view that some other jurors might have on this issue? The reality is that every jury panel has at least one juror who is not being honest. Since time is limited, make some attempt at determining why the juror is not being candid. Ask questions in an empathetic (not confrontational) manner. Many times we have heard jurors say, Well, to be honest with you... Those very words can save a precious peremptory strike. N. TOP 10 QUESTIONS AND PHRASES ATTORNEYS SHOULD NEVER USE Most of this article is devoted to the techniques or methodology an attorney should use during a thirty (30) minute voir dire. After participating in many trials and reading dozens of voir dire transcripts, we have assembled our Top 10 Questions and Phrases Attorneys Should Never Use in Voir Dire: this? 10. Do you understand that the law says...? 9. I take it from your silence that no one disagrees with the proposition that...? 8. Does anyone have a problem with...? 7. Will you keep an open mind and not decide this case until you have heard all the evidence? 6. Can you set aside your bias and decide the case on the facts? 5. Has anyone formed an opinion about...? 4. Can every one of you be a fair and impartial juror in a case like 3. Will you promise me that...? 2. I trust you will agree...? And the Number One Question attorneys should absolutely NEVER ask as a voir dire question to the entire panel is: 1. Do any members of the panel have any feelings about...? Just remember, regardless of a person s gender, age, race, education, income, occupation, or national origin, everyone has feelings. Some jurors are more willing to express their feelings, while others have a harder time doing so. The question to ask is, What feelings do you have [Juror s Name] about...? Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 55-30-

IV. CONCLUSION While an unlimited voir dire is an ideal situation, more often than not unlimited voir dire is not a reality. Although many judges do not impose such extreme time limitations, a 30-minute voir dire is not at all uncommon. However, a 30-minute voir dire does not have to be a death-blow to a case if each of those 30 minutes is treated as if they are an attorney s precious last dime. As one would plan a budget down to the last expenditure, so should an attorney budget voir dire time wisely to make sure that not one second is spent frivolously. To insure that each voir dire minute counts, the attorney should plan his/her voir dire strategy well in advance of trial; thinking carefully about what to ask, whom to ask, and how to ask only the most important questions. Finally, and most importantly, remember the theme of this article: Ask questions, don t give speeches; learn, don t teach; and, if you like the answer, loop it! 56 Construction Law Seminar September 2012-31-

DISTRICT 7I. Motion for Additional Time to Conduct Voir Dire in Texas District Court With Memorandum of Law in Support of the Motion 9 STATE OF TEXAS IN THE DISTRICT COURT vs. JUDICIAL COUNTY, TEXAS MOTION FOR ADDITIONAL TIME TO CONDUCT VOIR DIRE TO THE HONORABLE JUDGE OF SAID COURT: NOW COMES, the Defendant,, who by and through his undersigned counsel and pursuant to the 6th and 14th Amendments to the United States Constitution and Article I, Section 9 of the Texas Constitution and files this his Motion For Additional Time to Conduct Voir Dire and in support will show the following: SAMPLE I. That the Defendant,, is presently charged with the offense of [Charge of Defendant]. That in order to render reasonably effective assistance of counsel and assure the Defendant,, that he receives a fair and impartial jury trial, it is necessary for undersigned counsel to extensively voir dire the jury panel on certain principles of law, burden of proof, defenses, bias or prejudice which a potential juror may harbor. Adequate time to voir dire the jury is essential to counsel's intelligent exercise of the peremptory challenges. III. That undersigned counsel is prepared to proffer to the Court a list of questions it intends to present to the jurors, thereby demonstrating that said questions are not II. 9 BENNETT, CATHY E., AND HIRSCHHORN, ROBERT B., Bennett s Guide to Jury Selection and Trial Dynamics in Civil and Criminal Litigation (1995 Appendices Volume), St. Paul: West Publishing Company (1-800-622-9266). APPENDIX 1-32- Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 57

irrelevant, immaterial or repetitious. IV. That undersigned counsel specifically requests no more than three hours per side to voir dire the jury. V. That to unreasonably limit the time for voir dire will deny the Defendant a fair trial and effective assistance of counsel as guaranteed by the United States and Texas Constitutions. VI. That Defendant's request is reasonable in light of the Court of Criminal Appeals decisions in De La Rosa v. State, 414 S.W.2d 668 (Court of Criminal Appeals 1967) [20 SAMPLE minutes for voir dire was found to be unreasonable]; Clark v. State, 608 S.W.2d 667 (Court of Criminal Appeals 1980) [trial court reversibly erred in unduly restricting the extent of voir dire examinations in that Defendant could not intelligently exercise his right to make peremptory challenges]. WHEREFORE PREMISES CONSIDERED, the Defendant,, respectfully prays the Honorable Court grant this Motion For Additional Time To Conduct Voir Dire in order that the Defendant be entitled to voir dire for a period of up to three hours and for such other and further relief as this Honorable Court deems necessary and just. Respectfully submitted, [ATTORNEY S NAME] Attorney for Defendant [ATTORNEY S NAME] [ATTORNEY S ADDRESS and PHONE NUMBER] T.B. # APPENDIX 1-33- 58 Construction Law Seminar September 2012

CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the foregoing Motion has been hand delivered to the District Attorney's Office,, Texas on this day of, 19. [ATTORNEY S NAME] County Court Courthouse, ORDER On this the day of, 19, the foregoing Motion was duly presented to the Court and after due consideration, the Court is of the opinion that the same should be and it is hereby: (GRANTED) (DENIED) JUDGE PRESIDING SAMPLE DISTRICT STATE OF TEXAS IN THE DISTRICT COURT vs. JUDICIAL COUNTY, TEXAS MEMORANDUM OF LAW IN SUPPORT OF THE MOTION FOR ADDITIONAL TIME TO CONDUCT VOIR DIRE TO THE HONORABLE JUDGE OF SAID COURT: ARGUMENT AND AUTHORITIES The right to be represented by counsel, guaranteed by Article I, Section 10 of the Texas Constitution, encompasses the right of counsel to effectively question members of the jury panel in order to intelligently exercise his peremptory challenges. Mathis v. State, 576 S.W.2d 835, 836 (Tex.Cr.App.1979). Often times there is a natural tendency on the part of the trial court to place an arbitrary time restriction on voir dire. McManus APPENDIX 1-34- Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 59

v. State, 591 S.W.2d 505 (Tex.Cr.App.1979). Cognizant of the propensity for these two principles to conflict, the Court of Criminal Appeals has set forth a criteria to be followed. In determining whether the trial court unreasonably restricted the time to conduct voir dire, the Court has adopted a two-pronged analysis: 1) were the questions proper; and, 2) did counsel seek to indefinitely prolong the voir dire. Ratliff v. State, 690 S.W.2d 597 (Tex.Cr.App.1985 en banc.). The precise issue addressed by the Court in Ratliff was whether the trial court abused its discretion by limiting the Defendant's entire voir dire to one hour and thirty-five minutes. Speaking for the majority of the Court, Judge W.C. Davis found that such a restriction was unreasonable: SAMPLE "Various and unpredictable considerations such as the complexity of the case or the make-up of the venire may prolong a voir dire examination. Challenges for cause and discussions at the bench can contribute to a lengthy voir dire examination. In the instant case appellant was... forced to expend additional time examining three or four jurors before the bench due to challenges for cause. He also had to question some jurors more than others because of their responses to his questions that were directed at the whole venire. "Ratliff v. State, supra at p. 600 (attached hereto as Exhibit # 1). The Ratliff opinion demonstrates the Court's acute awareness of the dilemma confronting counsel who seeks to conduct a thorough examination of the veniremen. To intelligently exercise her or his peremptory challenges, counsel must elicit information from each individual juror and develop a rapport with that person [See, Bennett s Psychological Methods of Jury Selection in the Typical Criminal Case attached hereto as Exhibit # 2]. In even the simplest felony case, counsel's brief explanation of APPENDIX 1-35- 60 Construction Law Seminar September 2012

principles of law, followed by questions such as: 1) can you consider the full range of punishment; 2) have you ever been the victim of a crime; 3) whether family or close friend is in law enforcement; 4) whether they could render a verdict based solely upon the evidence; 5) whether they have a bias or prejudice against the Defendant; and, 6) general background information regarding education, prior employment, military service, membership in organizations, etc., could last well in excess of an hour or two. When counsel prepares a proper or thorough voir dire, controversial issues are raised which necessitate bench conferences, and objections to challenges for cause, all of which attribute to necessarily prolonging the jury selection process. This is a small price to pay to assure the accused that he receives a fair trial. The case law substantiates this proposition. SAMPLE Ratliff is the most recent reaffirmation of a string of recent cases which have reversed convictions due to unreasonable limitation of voir dire examination. In Thomas v. State, 658 S.W.2d 175 (Tex.Cr.App.1983) (attached hereto as Exhibit # 3), the Appellant's conviction was reversed because the time limitation placed upon the examination deprived counsel of the opportunity to ask relevant questions to individual jurors who were ultimately selected on the jury: "Because it is impossible to know beforehand how many prospective jurors may require significant examination for clarification of their points of view, no safe prediction of time required for voir dire can be made. Thus, although hindsight may reveal, as it did in Whitaker, that limitation of voir dire was not reasonable and was not an abuse of discretion in light of how voir dire actually proceeded, the very unpredictability of what voir dire will reveal makes it impossible to say beforehand that any particular time period will not reveal itself to be unreasonable as the events of voir dire unfold." Thomas v. State, supra, at APPENDIX 1 p. 76. -36- Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 61

In Thomas, the Court made reference to the Whitaker decision. There the Court held that the fifty (50) minute time limitation was not an abuse of discretion because the appellate record failed to reveal whether or not the jury was composed entirely from individuals that counsel had individually examined. Whitaker v. State, 658 S.W.2d 781 (Tex.Cr.App.1983). Finally, in Clark v. State, 608 S.W.2d 667 (Tex.Cr.App.1980) and De LaRosa v. State, 414 S.W.2d 668 (Tex.Cr.App.1967) the Court of Criminal Appeals held that the trial court abused its discretion by limiting voir dire to a mere thirty (30) minutes: "In view of the trial court's arbitrary time limitation on appellant's voir dire which consisted almost entirely of relevant, material and necessary questions, and in view of the trial court's refusal to allow appellant to ask a SAMPLE proper question about a proper area of inquiry, we concluded that the court erred in depriving appellant of a valuable right to intelligently exercise his peremptory challenges and thus abused its discretion." Clark v. State, supra, at p. 70. In determining what constitutes a reasonable limitation on voir dire, it must be noted that the appellate court has never relied on the range of punishment as the determining factor. Instead, the Court has employed a more logical yardstick: did counsel use his or her time in an effective manner by asking proper and relevant questions? Applied sub judice, counsel does not seek a limitless voir dire examination. Counsel has proposed proper and relevant questions which she desires to propound to the jury panel, some generally and some individually. The central issue in this case involves. This area of inquiry will undoubtedly generate very strong opinions by members of the jury. To effectively represent the accused and intelligently exercise her peremptory challenges, counsel will be required to delve into dialogue with many of the jurors. This will necessitate extra time with those jurors who express an opinion on this APPENDIX 1-37- 62 Construction Law Seminar September 2012

hotly contested public issue. WHEREFORE, PREMISES CONSIDERED, counsel respectfully prays that this Honorable Court grant counsel's request that voir dire not be limited to forty-five (45) minutes, but rather that counsel be given sufficient time to ask relevant and proper questions to each juror individually and for such other further relief as this Honorable Court deems necessary and just. Respectfully submitted, [ATTORNEY S NAME] Attorney for Defendant [ATTORNEY S NAME] [ATTORNEY S ADDRESS & PHONE NUMBER] SAMPLE T.B. # APPENDIX 1-38- Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 63

JUROR QUESTIONNAIRE 1. Full Name: Age: 2. Place of Birth: 3. In what other cities or states have you lived? 4. Where do you work (if unemployed or retired, where did you work)? 5. Length of Employment: Job Description: 6. What are your main job responsibilities? 7. What jobs have you held in the past? 8. Have you ever been responsible for supervising, hiring or firing employees? YES NO 9. How far did you go in school [if college, please name the school(s) and degree(s)]? SAMPLE 10. What is your marital status? If married, for how long? How many times have you been married? 11. Regarding your spouse, ex-spouse or the person with whom you are living, what is this person's occupation if unemployed or retired, where did this person work? What jobs has this person held in the past? 12. How far did this person go in school [if college, please name school(s) and degree(s)]? 13. Please list the sex, age and occupation for each of your: CHILDREN STEP-CHILDREN Sex Age Occupation Sex Age Occupation APPENDIX 1-39- 64 Construction Law Seminar September 2012

14. Have you attended any seminars, courses or had training in any of the following areas: Accounting, business, finance, insurance, management, marriage/family counseling, psychology, real estate, or law? YES NO If YES, what seminars, courses or training? 15. Have you, any family member or friend ever worked for any law enforcement agency? YES NO If YES, please explain : 16. Have you, any family member or friend ever held a job that involved investigating claims? YES NO If YES, please explain : 17. Have you or any family member ever owned a business? YES NO If YES, what type of business? 18. If the business is no longer open, why was it sold or closed? SAMPLE 19. Have you or anyone you know ever worked for an attorney or law firm? YES NO If YES, what attorney or law firm? 20. Have you or any family member ever hired an attorney? YES NO If YES, please explain: 21. Do you know any attorneys on a personal or professional basis? YES NO If YES, whom do you know and how do you know that person? 22. Have you or any family member ever been involved in a lawsuit? YES NO If YES, please explain: 23. Have you ever served as a juror in a: Criminal case Civil case a. What type of case(s) was it? b. Did you reach a verdict(s)? YES NO c. What was the verdict(s)? d. Were you the foreperson? YES NO APPENDIX 2 Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 65-40-

24. Have you, any family member or friend ever worked for or done business with [Company Name]? YES NO If YES, please explain: 25. Have you ever worked for or done business with any company involved in property management? YES NO If YES, please explain: 26. What duty or obligation does a property management company have to the tenants of the building? 27. What responsibility does an employer have for the behavior of employees while they are on working at their job? 28. What duty or obligation does an employer have to thoroughly screen and check prospective employees before hiring them? SAMPLE 29. What are your feelings about holding an employer responsible for the actions of employees? 30. While working, if an employee intentionally hurts or harms another person should the employer be held responsible? YES NO WHY DO YOU FEEL THIS WAY? 31. Have you, any family member or friend ever been the victim of a crime? YES NO If YES, please explain: 32. Have you or any family member been the victim of a crime that was committed on, or been injured on, someone else s property? YES NO If YES, please explain: 33. Has anyone ever been injured or been the victim of a crime while on your property? YES NO If YES, please explain: 34. Have you or any family member been injured by or been the victim of a crime committed by someone who was on the job at the time? YES NO If YES, please explain: APPENDIX 2-41- 66 Construction Law Seminar September 2012

35. Have you, any family member or close friend ever been the victim of any type of sexual assault? YES NO If YES, please explain: 36. How would you define sexual assault? 37. Have you ever heard of a situation where a person was sexually assaulted but did not immediately report the incident? YES NO If YES, why didn t that person report the incident right away? 38. Have you ever known of a situation where a person claimed to have been sexually assaulted and the person who was accused of the assault claimed that the other person consented? YES NO If YES, what was your reaction to that situation? 39. Do SAMPLE you know anyone who falsely claimed to have been a victim of a sexual assault? YES NO If YES, what were your feelings about that situation? 40. Do you know anyone who was allegedly sexually assaulted and later brought a civil suit? YES NO If YES, what were your feelings about that situation? 42. Have you heard or read of any cases where a person claimed to have been sexually assaulted and then sued the company whose employee she claims sexually assaulted her? YES NO If YES, what were your thoughts, feelings or opinions about that situation? 43. In a case where an individual has been allegedly sexually assaulted and is suing the employer of the person she claims sexually assaulted her, would you start out favoring: the Individual the Employer Neither PLEASE EXPLAIN YOUR ANSWER: APPENDIX 2-42- Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 67

44. Have you, any family member or close friend ever worked or volunteered at any rape crisis center, crisis hotline, shelter for abused women, or any similar organization? YES NO If YES, please tell us which organization(s) and why you/they chose to work or volunteer? 45. Have you, any family member or close friend ever worked or trained as a psychologist, psychiatrist, social worker, counselor, or in any related area? YES NO If YES, please explain: 46. Have you, any family member or close friend ever sought treatment for anxiety, depression, or other emotional difficulties? YES NO If YES, please explain: 47. Do you know anyone who suffers from Post Traumatic Stress Disorder (PTSD)? SAMPLE YES NO If YES, please explain: 48. There has been a lot of discussion lately about tort reform (limiting the amount of damages that can be awarded in lawsuits). What are your feelings about tort reform? 49. At the end of this case, the Court may instruct the jury to consider certain damages. If supported by the evidence, could you award damages for: Physical Pain YES NO Mental Anguish YES NO Medical Expenses YES NO Lost Income YES NO PLEASE EXPLAIN YOUR ANSWER: 50. What are your feelings about compensating a victim of sexual assault for physical pain? 51. What are your feelings about compensating a victim of sexual assault for mental anguish? APPENDIX 2-43- 68 Construction Law Seminar September 2012

52. Punitive damages are assessed, at the discretion of the jury, to punish or set an example. Under what circumstances, if any, do you feel punitive damages are appropriate in a case like this? 53. Please list the newspapers, magazines, professional journals, or periodicals to which you subscribe or regularly read? 54. Please list any civic, social, professional, or religious organizations to which you now belong or have belonged in the past: 55. How many hours a week do you spend watching television? 56. Please list your 3 favorite television shows: (1) (2) (3) 57. Please list the 3 people you admire most: (1) SAMPLE (2) (3) 58. Please list the 3 people you admire least: (1) (2) (3) 59. Please list the one person you feel most influenced your life and tell us why: 60. Which of the following bests describes you? [Please check ( ) all that apply]: Cheap Cerebral Compassionate Emotional Empathetic Generous Judgmental Logical Old-fashioned Opinionated Practical Private Selfish Sensitive Sentimental Strict Technical Visceral Other 61. What do you enjoy doing in your spare time? 62. Is there anything that you feel is important for the parties to know about you? APPENDIX 2-44- Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 69

III. Goals and Practical Tips for Voir Dire TRIAL TECHNIQUES GOALS AND PRACTICAL TIPS FOR VOIR DIRE* Lisa A. Blue Robert B. Hirschhorn *As published in the Am erican Journal of Trial Advocacy, Volume 26:2, Fall 2002 70 Construction Law Seminar September 2012

Goals and Practical Tips for Voir Dire Lisa A. Blue Robert B. Hirschhorn Abstract The authors, seasoned trial attorneys and jury consultants, supply the practitioner with invaluable insight into the critical arena of jury selection. This Article not only discusses six goals for successful voir dire, it also supplies the reader with specific practice tips gleaned from the authors collective experience. Introduction Too many lawyers walk into court totally cold the day they plan to select a jury for their case. They have not done enough preparation or planning, nor have they given any serious thought to the kind of jury that they want. These lawyers have no idea how the judge conducts voir dire; they have no knowledge about the length of the voir dire, how many jurors will be summoned, or how the judge generally rules on hardships. More often than not, these lawyers lose. The lawyer who comes to voir dire better prepared will have the upper hand during jury selection. A prepared lawyer is less likely to be caught off-guard by some surprise judicial ruling or local court rule. More importantly, a prepared lawyer makes for a happier judge, and a happier judge means more leeway in conducting voir dire. The question is, when do you start? Simply put, it is never too early to start planning for voir dire. B.S.Ed. (1973), University of Georgia; Ed.S. (1976), University of Virginia; M.Ed. (1976), University of Virginia; Ph.D. (1978), North Texas State University; J.D. (1980), South Texas College of Law. Dr. Blue is a psychologist and trial attorney, specializing in toxic tort litigation, with the law firm of Baron & Budd in Dallas, Texas. She has tried over 175 criminal and civil cases to verdict. Her civil trials have included issues such as asbestos, TCE, carbon disulfide, radiation, and other toxic substances. B.A. (1978), cum laude, Clark University; J.D. (1981), St. Mary s University School of Law. Mr. Hirschhorn is a jury and trial consultant and is the president of Cathy E. Bennett & Associates, Inc., in Lewisville, Texas. His firm primarily works on civil cases for both plaintiff and defendants. For further information, see their web page at www.cebjury.com. This Article is an adaptation of a chapter from a forthcoming book by the authors. Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 71

I. Goals of Voir Dire With the importance of voir dire clearly established, we are constantly astounded at how many lawyers begin jury selection without any goals to accomplish. Voir dire may be the most important aspect of the trial, and yet lawyers either enter jury selection totally unprepared or use the same structure and format they use in virtually every case. All too often lawyers think they can conduct an off the cuff voir dire, but this approach lacks focus and creativity. The lawyer s goals or objectives are rarely reached as the time for voir dire slips away. Unfortunately, clients often suffer the consequences of this cavalier approach used by trial attorneys. There are six goals that a lawyer should pursue as part of voir dire. Although every case and jury selection is unique, these six goals will help any lawyer do a better job of identifying and questioning potentially good and bad jurors for her case. The goals help give an attorney focus and direction to accomplish her end mission: To seat a jury that will give her client a fair trial. These goals are equally effective in both civil and criminal cases. Additionally, judges would also benefit from knowing, understanding, and appreciating these goals. Reviewing each of these goals as they pertain to each individual case will not only help you seat a better jury, but will also make you more focused on the case you will be presenting to that jury. In turn, you will become more comfortable during the voir dire process and may also become a better trial lawyer. A. Goal #1: Identify Bad Jurors for This Case Identifying bad jurors is not always as easy as one might think. In fact, a bad juror for one case may be a very favorable juror for a case you will be trying two weeks later. Simply put, a bad juror is someone whose belief system does not fit with the issues in the case at hand. For example, Lisa s husband Fred is a former President of the Association of Trial Lawyers of America and has been a plaintiff s lawyer since the early 1970s. Yet Lisa would be a great juror for the defense in a medical malpractice case. Why? Because her father and brother are both physicians. Another example would involve a potential juror who lost her husband in a car accident. Conventional wisdom by both plaintiff and defense lawyers is that this potential juror would be favorable to the plaintiff and unfavorable to the defense. However, when the attorney learns more about this potential juror, he may find that this person did not sue, or if there was a lawsuit, she sought money only for medical bills and funeral expenses, thus making her a more favorable juror for the defense. In order to identify a bad juror for a given case, you have to think about the type of jury you want. For example, are you looking for a jury that will be favorable toward assessing damages? In a criminal case, a good reasonable doubt juror may not be favorable to a psychiatric defense such as insanity. In addition, in a civil case, a good liability juror may not be as favorable on the issue of damages. Yet many lawyers make the mistake of putting both types of jurors on the jury and typically end up with the worst characteristics of both. For example, good liability jurors may be talked out of finding liability by the good damages jurors. Another alternative is that the jury may find liability but then reach a compromise verdict on damages because the good damages jurors agree to liability as 72 Construction Law Seminar September 2012

long as the good liability jurors agree to keep the damages low. The point is that you should determine what kind of jury you want as early as possible. Do you want a liability jury, or is your goal to get the best possible damages jury? For example, in the first Firestone tire case to go to trial against Ford Motor 1 Company, the plaintiff s attorney made a conscious decision to pick a liability jury. The reason for this was that the lawyer wanted to definitively establish Ford s culpability. A finding of liability by a jury would help all future cases that she and other lawyers around the country had against Ford. Sometimes a lawyer will want a strong liability jury because the damages will speak for themselves. For example, a lawyer might want to pick a strong damages jury in a medical malpractice case where the plaintiff has a strong proximate cause case but is weak on the issue of damages. In a recent case, the lawyers picked a damages jury, with the understanding that the jury might not find in their favor on proximate cause. But if the jury did so find, the damages would be substantial. The damages jury was chosen and returned a very large monetary verdict for the plaintiff. As another example, a defense lawyer may realize that his case is weak on issues of liability. As a result, he will want to pick a jury that is more inclined to award the minimum amount of damages. In a plane crash case, the airline will often admit liability so that the jury does not hear the horrific facts concerning the crash. This technique limits the amount of damages awarded by the jury. Assuming there is no punitive damages claim, a defense lawyer should consider this strategy in cases where the facts will clearly establish liability on the part of the defendant. Conceding liability allows the defense to focus on selecting a jury who would be favorable to the defendant on the issue of damages. To achieve this objective, you must know and understand your case completely. In fact, you must also know and understand your opposition s case as well. This level of comprehension can only improve your abilities and successes in trial. Once you determine whether you desire a liability or a damages jury, your next step is to prepare the specific questions to ask prospective jurors that will uncover their attitudes and belief systems. One way to achieve this goal is to use scaled questions. An example of a scaled question is: If a company does something wrong and a person suffers harm or injury because of the company s conduct, how important is it that the company be held responsible for that conduct? Then you give the prospective jurors options: very important, important, somewhat important, or not important at all. Another way to ask a scaled question is to read a statement and determine how strongly individual panel members feel about the statement. For example, the statement could be: People in America are too quick to sue. You then ask each potential juror which of the following options best describe their opinion of this statement: strongly agree, agree, somewhat agree, strongly disagree, disagree, or somewhat disagree. A scaled question gives you some sense of the prospective juror s belief system. A lawyer can use this same kind of questioning format to determine how comfortable the jurors will be with the key liability or damages issues in your case. For example, you might ask prospective jurors: How comfortable would you be awarding millions of dollars to a plaintiff? Again, you should give panel members a range from very comfortable to very uncomfortable. But remember, just because a prospective juror is very comfortable with awarding millions of dollars if the award is supported by the evidence 1 Gonzales v. Ford Motor Co., 2000-08-3598-A (Dist. Ct. Cameron County, Texas, Sept. 11, 2001). Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 73

that does not necessarily mean the person would be a good juror for finding liability. In criminal cases, this format is equally important and effective. You can ask the panel members how strongly they agree or disagree with certain legal principles such as the requirement of proof beyond a reasonable doubt, or whether a person indicted by a grand jury is guilty, or whether a defendant should be required to testify. Again, the range or responses should be from strongly agree to strongly disagree. If the prospective juror says, I can t answer because I don t have enough facts or I don t have enough information and your statement is too general, this could indicate the person may be: (1) skeptical, (2) distrusting, (3) detail-oriented, (4) critical, or (5) hostile. How important is a lawyer s gut reaction to individual panel members? If the lawyer s gut feeling is that she does not like the prospective juror, it is very likely that the prospective juror does not like the lawyer as well. One question to ask yourself when determining whether to seat or strike a prospective juror is: Do I want to look at this person every single day of the trial? Another question you should ask yourself is: At the end of this trial, would I feel comfortable calling or meeting with this juror? Additionally, you should ask: Would this juror be comfortable talking to me? If your sense is that the juror would not be willing to talk afterwards about the case, there is a very good chance that this juror is not good for your case. If you believe the juror would not listen or talk to you after the trial, how can you expect the juror to talk to you during voir dire or reasonably expect the juror to listen to you throughout the trial? So, how do you determine a good or bad juror? Much of it, quite honestly, is a feeling from the heart. The lawyer should analyze prospective jurors, doing so both cerebrally and viscerally. 74 Construction Law Seminar September 2012

B. Goal #2: Get the Jurors to Do Most of the Talking The only way to know if prospective jurors are good or bad for your case is to get them to talk about themselves, their ideas, and their feelings. To accomplish this goal, you need to convince prospective jurors to talk to you in the same way a psychotherapist is trained to convince a patient to talk - make the patient feel comfortable in the therapist s environment. Therefore, you should make the prospective jurors comfortable in your environment, the courtroom. Although jury communication is similar to therapy, there is one big difference. In therapy, the psychologist can try multiple times to break through with the patient. In voir dire, you have only one shot. If you do not make the prospective juror feel comfortable talking to you during voir dire, you do not get a second or third bite at the apple. You must figure out the best way to get the panel members to open up immediately. There are some very specific techniques lawyers can use to compel people to talk. (No, knuckle-busting is not one of them. Neither are threats that the jurors will be locked up for weeks if they do not cooperate - though many of us have wanted to try that a few times in our careers.) Remember a basic concept as you work to get prospective jurors to open up: always use jury-friendly language, words that jurors can relate to and understand. 1. Make Statements You Know Jurors Are Thinking The best way to get prospective jurors to open up is to start by making statements that you know they are already thinking. For example, you can acknowledge a prospective juror s fear of public speaking by saying, I know people don t like to speak in groups, but let me tell you why it is important that you tell both sides how you feel about certain issues. Another technique for encouraging jurors to start talking is self-disclosure on your part. This is the Gerry Spence approach - I ll show you mine, if you ll shoe me yours. 2 This is a very effective technique for getting people to open up. Self-disclosure and telling the jury panel something personal about yourself will make potential jurors feel more comfortable sharing personal information about themselves. PRACTICE TIP: Tell the panel members what some of your biases are to make it easier for prospective jurors to share their biases. For example, Lisa could say, I used to prosecute cases against organized crime and therefore would be biased in a criminal case because of my life experiences. This technique actually shows jurors that it is okay to express bias. 2 GERRY SPENCE, HOW TO ARGUE AND WIN EVERY TIME 135-52 (1995). Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 75

2. Reinforce Juror Responses Another terrific psychological principle that you can use to make people feel comfortable in opening up is to reinforce whatever response a panel member gives. This 3 technique is called deconditioning. Use the concept of deconditioning to tell the prospective juror that it is a good thing to voice his opinions, even if the comments are negative toward your side; doing so encourages other jurors to open up and say how they really feel about the issues. The idea is that, even if a prospective juror attacks the lawyer personally or attacks the case with a response to a questions, the lawyer answers back in a way that encourages honest statements and opinions. If a prospective juror says, I think all plaintiff s lawyers are ambulance chasers, many attorneys would become defensive and either argue with, verbally attack, or worse yet, cross-examine the potential juror. Nothing a prospective juror could say would justify a verbal attack by the attorney. A more effective way to handle this situation, and others like it, is to say to the juror, [Juror s Name], I want to thank you for your honesty. You are doing exactly what we lawyers and the judge want (or have asked) you to do. The beauty of our legal system is not only that each person is entitled to her beliefs, but that she is encouraged to express them. So thank you for doing just that. Now, who else on the jury panel agrees with what [Juror s name] expressed? PRACTICE TIP: In most jurisdictions and with most judges, this response may not be sufficient to challenge a potential juror for cause. You may want to get more specific responses from the prospective juror that show he has a true bias or prejudice and could not be a fair juror in this particular case. By contrast, if you become abrasive or combative with a prospective juror who expresses negative feelings or opinions towards your case, this will dissuade other panel members from talking and opening up. The detrimental impact of a negative reaction will not just affect the individual juror with whom you are communicating. The rest of the panel will likely conclude that you, the lawyer, do not want to hear honest responses from the panel members. You must be very careful in terms of the messages you send to the rest of the potential jurors when one of them gives you an honest but negative answer about your case or any of the issues in your case. The danger is that the other members of the jury panel will notice and punish you if you come across as judgmental in responding to their answers. The potential jurors will feel that they should not express such opinions and will harbor them internally. However, you can bet that those negative feelings will resurface again - during jury deliberations, which can be devastating to your case and your client. In comparing voir dire to therapy, a negative response to a panel member s statement would be like a therapist ridiculing a patient who makes a very honest and personal disclosure during therapy. Instead of encouraging or comforting the patient, the therapist says to the person, Well, that was a pretty stupid thing to do, don t you think? We know that this kind of reaction is not going to accomplish our goal of convincing potential jurors to open up to us during voir dire. Voir dire should be more like an old-time revival: Once you get the first sinner to come forward, the rest of the flock will follow. The trick is getting that first panel member 3 See Lisa A. Blue, How to Improve Your Chances for Selecting a Favorable Jury: Proven Psychological Principles to Use During Voir Dire to Uncover Juror Bias, 1 Ann. 2001 ATLA-CLE 1152 (2001) (stating that [d]econditioning basically means that the more one is exposed to a particular stimulus, the weaker the response becomes ). 76 Construction Law Seminar September 2012

to open up. 3. Praise Honest Answers A good technique to get more potential jurors to speak up is to praise them when they are honest. Psychologists say that the number one fear in America is the fear of public speaking. Fear of public speaking comes in ahead of death and snakes. So, when a prospective juror has the courage to speak up and say something personal, you must embrace the answer, thank the person, and encourage the other potential jurors to do the same. Make those persons who open up, and their answers, an example for all the other panel members to follow. A brilliant way to make the potential jurors open up is to state: Do you know who ends up on the jury? It is the people who don t talk to us during jury selection. That statement always motivates people to speak up, especially those who do not want to serve. It is an excellent catalyst to get bad jurors off since the psychological idea is that, if people really do not want to serve, they probably will not be good jurors for either side. PRACTICE TIP: This question should come in the early portion of voir dire. The reason is that you want potential jurors to open up early in the process so that you have an opportunity to learn as much as possible about the panel members. What is the psychological reasoning for why prospective jurors will not open up and speak in public? Because jurors life experience, in school and work, is: If I keep my mouth shut, I will stay below the radar. Potential jurors remember thinking, If I sit in the back of the class and do not raise my hand, the teacher will not call on me. Even in the military, people do not raise their hands and volunteer for extra assignments or duties. Drawing on these experiences, potential jurors think that if they do not speak up, they will not be noticed, will get out of jury service, and will get to go home more quickly. Lawyers should say to potential jurors that sitting quietly will not work as a strategy to avoid being chosen to serve. Tell them that the people who talk, the people whom the lawyers can learn something about are more likely to be excused from serving as jurors. A good line to consider using is, Those who talk, walk. Those who have nothing to say, stay. PRACTICE TIP: Be sensitive to how the judge will respond to this statement. If you can incorporate this statement or something similar to it in the voir dire, it helps the prospective jurors to understand how important it is that they open up. Also, lawyers should never tell the panel members that they are looking for jurors who are fair and impartial. Such a statement will condition the potential jurors to think their answers should reflect your desire that they be fair and impartial. Instead, you should tell the jury panel that everyone wants potential jurors who are going to be open and honest. It is critical for the lawyer to encourage the judge to instruct the jury panel to be completely honest with the attorneys and the judge in answering questions. PRACTICE TIP: Consider gesturing towards the judge when saying the words, everyone wants... 4. Interactive Participation Another great technique is one we have learned from video games: interactive participation. People like to participate. The way to encourage interactive participation is to let the panel members give the answer rather than supply the answer for them. For example, to convey a point about bias and prejudice, do not just make the statement to Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 77

the prospective jurors that former President Bush has a bias against broccoli. Make it more interactive by asking a question that requires their involvement: Does anybody remember the vegetable that President Bush (the father) doesn t like? This way, the jurors are interacting with you. PRACTICE TIP: Consider using this example as a segue into a discussion about bias and prejudice regarding case issues. The point of this example is that, if a president can have a bias or prejudice, so can everyday citizens. Keep in mind that it is more powerful and more meaningful when a person makes a statement himself, as opposed to another person saying it for him. When potential jurors say things that are good for your case, the statement is in their own words and they take much more pride in the ownership of that statement. PRACTICE TIP: Plaintiff s counsel should ask the panel: Why is it important for companies to put adequate warnings on dangerous products? Using potential jurors responses in your closing argument is much more powerful because they are concepts the jurors themselves have stated. 5. Explain the Importance of Jurors Answers Finally, it is always wise to explain to the jury panel why it is important that they talk. Explaining why something is important has more significance than merely stating that it is important. For example, a parent telling a teenage driver to stop at a stop sign or slow down around sharp curves may not register as important. But if the parent explains that the consequences of not stopping at the stop sign or slowing down around curves are that he could be in an accident or even die, then the reality of the instructions hit home. Tell potential jurors the reason why it is important for them to open up and say how they really feel about issues. Explain that, if potential jurors do not speak up, they may be selected to serve on a jury in a case in which they cannot be fair. Having jurors with a bias or prejudice about issues in the case is unfair to the jurors and the parties. Potential jurors should be made to understand that the whole point of speaking out is so that the attorneys and the judge can decide if this is really the right case for you. 78 Construction Law Seminar September 2012

C. Goal #3: Get the Bad Jurors Sent Home Have you ever tried pulling a dog on a leash when the dog does not want to come? It is much easier to figure out the direction the dog wants to go and take the dog there. Such is the dilemma for many lawyers in voir dire. Instead of making jury selection a walk in the park, it becomes a painful and feared trip to the veterinarian s office. 1. Encourage Honest Answers The point here is to get panel members excused whom you have identified as bad for your case. Arguing or fighting with the panel member to establish a for-cause strike is not the best nor the most effective method. Rather than making this individual feel like he has said something wrong, thank the juror. Tell him that one of the great privileges we have living in this country is that we are all entitled to our own opinions. Sometimes that means we are going to disagree with the law or have a bias or prejudgment about certain issues. There certainly is nothing wrong with that. PRACTICE TIP: When a potential juror gives a bad answer, the lawyer should thank and praise that person for her honesty and then use the answer to find out who else has the same or similar feelings. The truth is, there are no bad answers in voir dire. If a potential juror gives a socalled bad answer, that juror is someone you probably want to get rid of anyway. So, in reality, the bad answer is a very good answer. The more you reinforce and praise a venireman who has given the bad answer, the more likely it is that this person will continue to make honest statements in open court about her biases and prejudices in the case. This will encourage other panel members to do the same. Remember, the goal here is to have the prospective bad juror removed without having to use a peremptory strike. You are in much better shape any time you do not have to use a peremptory strike on a potentially bad prospective juror. Peremptory strikes are truly precious. Lawyers never have enough, no matter what jurisdiction you are in. 2. Read and Utilize Body Language A vast majority of communication by the potential juror during voir dire is 4 nonverbal. Pay close attention not just to what the person says but how she says it. You learn much more with your eyes than with your ears. A panel member who says she can be fair but makes poor eye contact calls into question the sincerity of her response. Even when a prospective juror gives a bad answer, subtly nod your head to reaffirm, praise, and assure the panel member. Such a positive nonverbal gesture will encourage continued truthful responses from the jury panel. In a situation where a potential juror has given a bad answer, you should follow up by saying: Sir, I want to thank you for sharing that with us. So you would agree with me that, if there is a case with that kind of issue, you would start out with a leaning or prejudging, what lawyers call a bias or prejudice? At the same time that you are asking 4 Lisa A. Blue, Mirroring, Proxemics, Nonverbal Communication, and Other Psychological Tools, 1 Ann.2001 ATLA-CLE 153 (2001). Nonverbal communication, or body language, is a popular psychological term referring to a person s gestures and their inherent meanings. Id. Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 79

the question, subtly nod your head affirmatively. The prospective juror picks up the answer with his eyes and brain before he hears all the words. The potential juror s subconscious is saying, answer yes to this question. This helps the prospective juror because it is what he is feeling inside anyway. A subtle nod says it is okay to say what you feel. Therapists use this technique to encourage patients to express their feelings. The patient s eyes and brain have already seen what the right answer is, so they are more inclined to give their honest feeling or opinion. 3. Use One Juror to Find Others The next step is to praise and thank this potential juror, then use this answer to find out how many other members of the panel have similar feelings or opinions. We call this mirroring. Once the bad juror has publicly stated a bias, simply ask who else on the panel has similar feelings or agrees with the first juror. In effect, you are using a psychological technique of mirroring one juror to get others excluded. Use the bad juror as a messenger to evoke responses in those members of panel who have similar feelings. If a lawyer stands up in a courtroom and says, Is there anyone here who cannot award millions of dollars for pain and suffering even if supported by the evidence?, not many people will raise their hand. But a fellow member of the jury panel may say something like, With all due respect, even if supported by the evidence, I just don t believe in awarding millions of dollars for pain and suffering. The lawyer should then thank the person for her honesty and immediately ask, Who else agrees? A substantially greater number of people will come forward. More panel members will agree with the words of one of their own than with words supplied by a lawyer. The lawyer is an advocate, a hired gun, an interested and vested party to the litigation. The potential jurors may or may not agree with the attorney, but they certainly do not identify with him. But when panel members hear one of their own admit to something, they are much more inclined to open up and agree with a fellow potential juror. In jury selection, the messenger is just as important as the message. 4. Know Your Magic Language One of the most difficult things about jury selection is knowing the magic language of your jurisdiction. Magic language means the words that must be used to get a prospective juror excused for cause. Even if you ask a great question, the answer may not be enough in your jurisdiction to have a prospective juror excused for cause. For example, if you ask how many panel members could not award millions of dollars in a personal injury case, and several of them admit they could not, that response may be insufficient in some jurisdictions to have those potential jurors excused. Instead, you need to add the magic words to the question, such as: 1....even if the evidence calls for it? 2. So even if the Court instructed you as to the law on this issue, you would still be unable to follow that law? 3. So it would be fair to say that on this issue, you would start the trial with a prejudgment or leaning, what lawyers refer to as a bias or prejudice? 4. Would it be fair to say that you feel so strongly about this, it would be difficult for you to set your opinion aside on this issue? 5. You are telling the Court that this is not the right case for you, given your 80 Construction Law Seminar September 2012

opinions on this (these) issue(s)? These magic words are so important because, in some jurisdictions, judges may attempt to rehabilitate potential jurors who have expressed bias or prejudice. You must anticipate and preempt the judge s ability to rehabilitate potential jurors who give unfavorable responses. For example, you might say to the prospective juror, I anticipate that the judge may ask you if you could set aside your opinion and belief and decide this case on the evidence. What I hear you saying is that you could not. Is that fair to say? Saying that you anticipate what the judge may ask has the potential for upsetting the judge. Thus, another option is to say to the potential juror, So no matter who asked you, it would be fair to say that you could not set aside this strong opinion or belief that you hold? Additionally, appellate courts in many jurisdictions give wide latitude to the trial judge in determining if the evidence was sufficient that a potential juror could not have awarded damages because of her belief system. However, the case law in most jurisdictions is very strong in requiring the dismissal of prospective jurors who say they would not award damages even if the evidence calls for it. Adding this magic language may be an important distinction for the record in case there is an appeal. Bias and prejudice are two other magic words in many jurisdictions. Case law in Texas says that a potential juror who expresses a bias or prejudice against a party or 5 an issue cannot be rehabilitated. Instead, that potential juror should be excused for cause. Check the case law in your jurisdiction regarding the words a panel member must say in 6 order to be excused for cause. You must know whether a prospective juror can be 5 See, e.g., Sheperd v. Ledford, 926 S.W.2d 405 (Tex. 1996); Compton v. Henrie, 364 S.W.2d 179 (Tex. 1963); Feldman v. State, 71 S.W.2d 738, 744 (Tex. Crim. App. 2002) (noting that a panel member can be excused for cause if the law is explained...and he...[is] asked whether he can follow that law regardless of his personal views ). 6 See Knop v. McCain, 561 So.2d 229, 232 (Ala. 1989) (finding prospective jurors should have been disqualified for statements such as people sue too quickly and evidence must be overwhelming to award damages); State v. Munson, 129 Ariz. 441, 443-44, 631 P.2d 1099, 1101-02 (Ct. App. 1981) (holding the trial court properly allowed jurors who had opinions about interracial relationships but said they could be fair); Jones v. State, 264 Ark. 935, 936, 576 S.W.2d 198, 199 (1979) (not excusing a juror with a mistaken view of the law but who would follow the law as explained by the court); People v. Bittaker, 48 Cal. 3d 1046, 1089-90, 774 P.2d 659, 683, 259 Cal. Rptr. 630, 654 (1989) (holding the trial court erred in allowing a prospective juror who worked at a rape crisis center and did not believe she could be impartial); People v. Sandoval, 706 P.2d 802, 803-04 (Colo. Ct. App. 1985) (reversing the trial court for allowing a juror who blamed the defendant for interrupting his vacation); Johnson v. New Britain Gen. Hosp., 203 Conn. 570, 582-83, 525 A.2d 1319, 1326 (1987) (stating a juror s abstract bias against a class of litigants does not necessarily disqualify him if he can be impartial); Card v. United States, 776 A.2d 581, 586 (D.C. 2001) (stating a juror may be stricken for religious or other beliefs that would deter his ability to apply the law); State v. Cohen, 604 A.2d 846, 855-56 (Del. 1992) (ruling that a prospective juror in a capital case should be excused if his views would impair the performance of his duties); Sydleman v. Benson, 463 So.2d 533, 533 (Fla. Dist. Ct. App. 1985) (stating challenges to potential jurors impartiality should be resolved in favor of excusing the juror); Robinson v. State, 258 Ga. 279, 280, 368 S.E.2d 513, 514 (1988) (holding the trial court properly excused a juror who said he could not fairly decide the case on the evidence because of his religious beliefs); State v. Cardus, 86 Haw. 426, 438, 949 P.2d 1047, 1059 (Ct. App. 1997) (holding the trial court properly allowed a juror whose prior experience as a juror was negative but said he could be fair); State v. Hairston, 133 Idaho 496, 507, 988 P.2d 1170, 1181 (1999) (upholding the trial court for allowing a juror who said he resented the justice system but could be fair); Flynn v. Edmonds, 236 Ill. App. 3d 770, 780, 602 N.E.2d 880, 886-87, 176 Ill. Dec. 934, 940 (Ct. App. 1992) (ruling that a prospective juror s concern about a high damage award was not cause for discharge); Smith v. State, 730 N.E.2d 705, 708 (Ind. 2000) (stating a juror who said he would be distracted by personal business matters did not have to be excused); State v. Verge, 34 P.3d 449, 455 (Kan. 2001) (ruling the defendant was not harmed by a juror who expressed opinions about racial violence); Mabe v. Commonwealth, 884 S.W.2d 668, 671 (Ky. 1994) (stating the test is whether a juror can conform his views to...the law and render a fair and impartial verdict ); State v. Wiley, 614 So.2d 862, 867 (La. Ct. App. 1993) (stating a juror s religious belief that one person cannot judge another justified excusing for cause); Commonwealth v. Austin, 73 Mass. 51, 52 (1856) (holding jurors who Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 81

rehabilitated by the other party, or even the judge, once the prospective juror has expressed a clear bias or prejudice. Link the magic words that will excuse a potential juror with the prospective juror s answer. It is very difficult to get a juror to say yes I have a bias or prejudice, because that is just not how anyone likes to think of himself. No one likes to admit to a bias or prejudice, especially using emotionally charged words. 5. Strong Beliefs Do Not Change We want potential jurors to feel comfortable with the notion that strong opinions or long-held beliefs will not change. So, when a panel member expresses a strong negative opinion about corporations, personal injury attorneys or mental anguish, we want the potential juror to admit that this belief or opinion will not change. How do you accomplish state an opinion against the law on which the prosecution is founded may be excused; State v. Melanson, 804 A.2d 394, 398 (Me. 2002) (stating the trial judge has sole authority to determine if a juror can be impartial); People v. Roupe, 150 Mich. App. 469, 475, 389 N.W.2d 449, 453 (Ct. App. 1986) (finding the trial court erred by not dismissing a juror who said he did not care for black people but could be impartial); Martin v. State, 592 So. 2d 987, 988 (Miss. 1991) (stating that a clear showing a juror could not follow the court s instructions must exist); Hunt v. State, 321 Md. 387, 418, 583 A.2d 218, 233 (1990) (stating prospective jurors should not be excused for abstract beliefs ); State v. Chastain, 285 Mont. 61, 64, 947 P.2d 57, 59 (1997) (stating a prospective juror must be excused if actual bias is discovered); State v. McHenry, 247 Neb. 167, 175, 525 N.W.2d 620, 627 (1995) (excusing a prospective juror who said she could not set aside her religious beliefs to render a verdict); State v. Rideout, 43 N.H. 363, 365, 725 A.2d 8, 10 (1999) (stating the trial court has a duty to discern a juror s indifference once impartiality is questioned); State v. Singletary, 80 N.J. 55, 64, 402 A.2d 203, 208 (1979) (stating a recent victim of a crime similar to that of the accused may need to be excused); Thompson v. State, 111 Nev. 439, 442-43, 894 P.2d 375, 377 (1995) (ruling that a potential juror who said the defendant looked guilty should be excused); State v. Baca, 111 N.M. 270, 275, 804 P.2d 1089, 1095 (1990) (excusing jurors who demonstrated unresolved experiences with violent crimes similar to those charged against [the] defendant ); People v. White, 688 N.Y.S.2d 565, 566, 260 A.D.2d 413, 414 (App. Div. 1999) (stating a potential juror who expresses bias must give an unequivocal promise to set aside his...prior state of mind ); State v. Mebane, 106 N.C. App. 516, 527, 418 S.E.2d 245, 252 (Ct. App. 1992) (stating a juror with an opinion about the case need not be excused if the court determines he can set aside his opinions to render an impartial verdict); State v. Midwest Pride IV, Inc., 131 Ohio App.3d 1, 20-21, 721 N.E.2d 458, 472 (Ct. App. 1998) (stating a potential juror who demonstrates partiality cannot render himself able to serve simply by stating he can be impartial); Workman v. State, 824 P.2d 378, 380-81 (Okla. Crim. App. 1991) (stating a person may serve as a juror if he can set aside his preconceived notions and opinions ); State v. Nefstad, 309 Or. 523, 529, 789 P.2d 1326, 1332 (1990) (stating a juror who stated biases against minorities and the justice system but said he could be fair was properly excluded); Commonwealth v. Impellizzeri, 443 Pa. Super. 296, 305, 661 A.2d 422, 427 (1995) (stating a juror unwilling or unable to eliminate the influence of bias should be excused); State v. Hazard, 785 A.2d 1111, 1122 (R.I. 2001) (stating a juror can be removed only for cause after the jury is paneled); Brown v. S.H. Kress & Co., 170 S.C. 178, 178, 170 S.E. 142, 142-43 (1933) (holding a juror who admitted bias against the plaintiff s attorney and a dislike of lawsuits was properly dismissed); State v. Knoche, 515 N.W.2d 834, 840 (S.D. 1994) (stating a juror who expresses an opinion about the case during voir dire need not be excused if she states under oath that she can be fair); State v. Bigbee, 885 S.W.2d 797, 805 (Tenn. 1994) (finding the defendant failed to establish a juror was racially biased, even though the juror s clothing and gestures in the courthouse indicated strong biases) (overturned on other grounds); Cordova v. State, 733 S.W.2d 175, 180 (Tex. Crim. App. 1987) (stating a juror expressing bias against the defendant or the law on which the defense is based may be challenged); State v. Brooks, 631 P.2d 878, 884 (Utah 1981) (stating a trial court must discern if a potential juror who has indicated a bias yet an ability to be fair can be impartial); State v. Santelli, 159 Vt. 442, 446, 621 A.2d 222, 224 (1992) (stating a court should remove a juror for cause if he demonstrates an inability to be impartial); McGill v. Commonwealth, 10 Va. App. 237, 242, 391 S.E.2d 597, 600 (Ct. App. 1990) (stating a juror indicating bias cannot be rehabilitated by giving expected answers to leading questions ); State v. Moser, 37 Wash.2d 911, 917, 226 P.2d 867, 871 (1951) (finding that it would be prejudicial not to dismiss a juror for cause who states he cannot be fair); O Dell v. Miller, 211 W. Va. 285,, 565 S.E.2d 407, 412 (2002) (stating a prospective juror who indicates a disqualifying prejudice must be dismissed as a matter of law); State v. Nielsen, 247 Wis. 2d 466, 483, 634 N.W.2d 325, 332 (2001) (stating a juror who expresses a bias or prejudice should be removed for cause); Munoz v. State, 849 P.2d 1299, 1302 (Wyo. 1993) (stating that removal is not warranted if the prospective juror can set aside a supposed bias ). 82 Construction Law Seminar September 2012

this? Consider the liver-and-onions example: Who on the jury panel, like me, hates liver and onions? In every single case we have done this, at least some panel members have raised their hands. Then you say, Imagine this was a case about the taste of liver and onions. Let me tell you a little bit more about the case: I have a nutritional expert who will testify about the exceptionally high nutritional value of liver and onions. I also have a taste expert who will tell you that, when you combine liver and onions, the molecules bind to create a magnificent taste. Also, a well-known and well-liked celebrity will testify about how wonderful liver and onions tastes. Now, here is my question to those members of the jury panel who raised their hands and said they did not like liver and onions: Can you now be fair as a juror on a case involving the taste of liver and onions, or do you still feel the same way as you did before about liver and onions? This example illustrates a very important fact: strong opinions or long-held beliefs rarely change. You are much better off getting potential jurors to express a negative feeling about an issue in your case. Then commit the panel member by, in a friendly tone of voice, using the magic language yourself. Here is how it might go: By stating you have these feelings about this matter, this prejudgment, this leaning that lawyers call a bias or prejudice, you are saying you would start out in this case having those feelings. Once you incorporate those magic words into the question, and once the prospective juror affirms it, you have gotten what you need. A very effective way of addressing prejudice and bias is for you to admit to the prospective jurors that you have biases of your own, which makes it okay for the potential jurors to admit they have biases and prejudices as well. For example, Lisa frequently tells a panel of prospective jurors that she used to be a prosecutor in the district attorney s office working on organized crime cases. Then she tells the jurors that, because of that life experience, she has certain biases or prejudices against defendants in organized crime cases. As much as I want to be a fair juror, I know I would bring those feelings and biases into the jury box, Lisa tells the panel members. I d like to think I could overcome those prejudices, but I know from my work in that area and my experiences that I could not be fair. Another technique is to use examples of family members or friends. One attorney told a jury panel about his dad, who had spent his whole life working for a large company. He said his dad was treated very well by the company. Because of that, his dad had very positive feelings about large companies in general. The lawyer said that, if his dad were ever called in a case involving a large company, he would lean toward the large company because of that life experience, even though he would try to be fair. Using self-disclosure helps the potential jurors feel comfortable talking about their own prejudices. Like it or not, judges consider these factors very carefully. Make sure that you know the magic language of your jurisdiction and make sure that your record is clear enough so that it shows the panel member either used the magic language or agreed with the sentence you said that contained the magic language. 6. Convince Some Not to Be Jurors Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 83

Finally, you need to convince jurors that it is okay to admit they might not be a good juror for this particular case. To accomplish this, you must eliminate the idea in the prospective juror s mind that it is embarrassing or belittling to admit to prejudice. State, for example, There is nothing wrong with admitting prejudice. We all have biases in favor of or against things. That is okay, as long as you reveal those biases to us. Make the panel members believe that it is good to be removed from a jury, if a person is not right for that case. Part of the problem is that many judges and lawyers tell jurors there are three fundamental aspects of being an American citizen: serving in the military, voting, and serving on a jury. When a jury panel walks into the courtroom for voir dire, they have just heard the speech down in the central jury room from a judge about the importance of jury duty to the preservation of democracy. If the judge in your case is open-minded and forward thinking, one possible solution is to ask the judge to inform the prospective jurors that not everyone makes a good juror in every case. Even better is for the judge to actually tell the jury panel that some people simply are not right for some cases. For example, a judge might say, Being a good citizen and a good juror sometimes means admitting that you would not be the best person to serve on this particular jury. Just as it is your civic duty to respond to your jury summons and drive to the courthouse, it is also your civic duty to realize and accept that this may not be the right case for you. Another example comes from Judge Kenneth Hoyt, a federal district judge in Houston. Judge Hoyt tells potential jurors that many years ago he purchased a car that he later believed was a lemon. He then explains that, to this very day, he would not be able to be a fair juror in a case involving that particular automotive manufacturer. Language is everything. It may be best not to say that a panel member would make a bad juror for your case, even if that person has admitted to a bias or prejudice. Instead, you should say that your case is not right for that particular panel member. This phrasing moves the negativity from the potential juror to the case, thus removing the stigma of being a bad panel member. 7. Sacrifice a Good Potential Juror Another technique for identifying unfavorable jurors is to sacrifice a good juror in order to flush out and identify unfavorable ones. This technique is not used by many trial lawyers. Usually, you can get a member of the jury panel to raise her hand and say she is unashamedly on your side. A statement this strongly in favor of your case or your client makes rehabilitation of that panel member highly unlikely. Most lawyers would try to stop that person talking or saying that she favors their client. Instead, use this occasion to impress the other panel members, because you are going to lose this prospective juror anyway. A plaintiff s lawyer should tell the prospective juror, I would love to have you serve as a juror in this case because it is obvious that you feel a lot of compassion for my client. However, it sounds as if you have a prejudice against the defendant and that you are biased towards me. As a result, it would not be fair if you served on this jury. At this point, thank the panel member for her honesty and ask her permission to have the judge excuse her from serving as a juror in this case. The psychology of doing this can work to your advantage. First, you come across as fair and open-minded in the eyes of other potential jurors and the judge. The panel 84 Construction Law Seminar September 2012

members also believe you really are trying to find jurors who are unbiased. Second, it allows you to tell the remaining panel members that, just as the excused person would have been an unfair juror with biases towards your case, panel members who have strong leanings toward the other side would not be fair to your client. By sacrificing a potentially good juror, you will hopefully flush out some of the bad panel members as well. Besides, everything good and nothing bad comes from deftly sacrificing a prospective juror you know is going to be struck for cause anyway. You can use losing the good panel member to your advantage. This technique is as useful to a defense lawyer as it is to a plaintiff s attorney. D. Goal #4: Inspire Jurors to Care About Your Case Whether you represent corporations, plaintiffs, criminal defendants or the government, you need one thing if you want to win your case: jurors who care about your client and who are interested in your case and your issues. Jurors who care will give you and your client a fair trial. Jurors who do not care will not invest themselves in your client or the case and are, at best, unpredictable. At worst, they are not happy to be there and will punish you and your client when the verdict is rendered. That being said, most jurors want to do the right thing. The key is for you to convince the jurors that your case is not frivolous or a waste of their time, and that your argument deserves their full attention. Step one in accomplishing this is to tell the panel from the first moment that you stand up to address them that this is a very big and important case. Those eight words should be the first words out of your mouth. When you speak those eight words, the panel instantly becomes invested in the case. You have a phenomenal task as an attorney to get people to quickly care about a case when they do not know you and probably do not want to be there in the first place. This step is all about you sending a message. If you cannot be excited, sincere, and enthusiastic about your case, do not expect anybody on the receiving end to want to invest in it either. When the lawyers are not committed, or when the lawyers are not prepared, jurors pick up on that fact quickly. This is not good for the lawyer or the client. Jurors expect you to be committed to your client and well prepared if your case is important enough to keep the jurors from their homes. This is true whether the case is civil or criminal. In every single trial - whether the case is a fender-bender, a boring contract case, or a drinking-and-driving case - the jury needs to know your case is important to somebody. If the case is not important to somebody, then you should not be in trial. Your trial is taking the jurors away from their families and their jobs. If they believe the trial is not important, then they will punish you and your client. You should stand before that panel and tell them that this case is the biggest thing in your client s life. If your client is a corporation, you need to tell the jury panel that this is a very important case to your client s company. Tell the panel that your client has been waiting for months (or even years) to have his day in court and to tell his story to a jury of his peers. We have seen lawyers start their voir dire by standing up, showing a picture of the victim, and saying, This is what this case is about. It is an all-american family just like yours, and yours, and yours. Members of the jury think, Wow, that could be me. If your client is a corporation, you can tell the panel that you wish you had a photograph of all Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 85

200 (or 10,000 or 500,000) employees who work for and whose families depend on your client, because this case is important to those employees. You cannot violate the golden rule by asking the juror to place themselves in the shoes of your client. Yet, you can use many psychological techniques that allow you to out the prospective jurors in the shoes of the litigants, and those techniques are all very powerful tools. 7 Televised court trials have made prospective jurors want to serve on big important 8 cases. If you ask prospective jurors if they want to serve on a meaningless little case, they are all going to say no. People want to feel like they have a chance to serve on a highprofile case. They want to believe they can make a difference. You need to make your case right away. You usually have one-hundred percent attention of all the panel members at the very beginning of voir dire. You must impress and invest in the potential jurors within the first few minutes in order to keep their attention. If you do not impress them with the importance of your case during those first minutes, you have lost your best - and perhaps only - opportunity to do so. For example, any writer knows she must capture the reader s attention in the first three or four paragraphs, or the reader loses interest. Most people simply are not patient enough to wait around for an hour or two of your voir dire before making a decision whether or not to care about your case. Jurors who are interested will listen. If jurors are interested and listening to your case, then they will want to do the right thing and they will give you a fair trial. But if jurors are not interested, your client s day in court will be similar to a visit to the dentist s office - your client will want to get the day over with as quickly as possible. E. Goal #5: Teach Good Jurors How to Stay on the Jury To accomplish this goal, you must first identify the jurors who are good for your case. Good jurors are not necessarily just the opposite of bad jurors. In fact, a juror can be both good and bad - good on liability but bad on damages, for example. How do you determine which potential jurors are good or bad? The most obvious tool, of course, is their verbal statements during voir dire. Some key questions may elicit a response that tells you if a potential juror will be good or bad for your case. One such question would be: If you were me, would you want somebody just like yourself on this jury? Lisa asked that question of a potential juror in a case a few years ago. The juror was a woman that Lisa at first liked very much. But when Lisa asked the juror this question, the woman immediately snapped back, I m not you. Thank goodness Lisa asked the potential juror this question, because a person whom we thought was a very good juror turned out to be a very bad juror. If this question would not be permissible in your jurisdiction, then ask a question such as: Why do you feel you would be a good juror for this case? If you are seated on this jury, is there anything in your background that I 7 See Blue supra note 3. 8 Blake D. Morant, Resolving the Dilemma of the Televised Fair Trial: Social Facilitation and the Intuitive Effects of Television, 8 VA. J. SOC. POL Y & L. 329, 334 (2001). 86 Construction Law Seminar September 2012

should know about? If you could tell me one thing about yourself that I don t know already, what would you tell me? If you were my client, would you want somebody such as yourself on this jury? Why or why not? How would you feel if you were chosen as a juror in this case? When you first heard what this case was about, what was your initial reaction? Is there any issue that I ve talked about that gives you any hesitation about sitting on this jury? Having heard some of the facts of this case, if you were me, what questions should I ask you to learn if you have a prejudgment or bias against my client in this case? This list contains both open-ended and closed-ended questions. Remember, you will often learn more about a potential juror from an open-ended question than you will from the limited response to a closed-ended question. When Robert helped defense lawyers in the criminal ethics case of Texas Senator Kay Bailey Hutchison, he told the lawyers to ask every juror a simple question: Can you, as a juror, look Senator Hutchison in the eyes and say, Kay, I can give you a fair trial. Robert and the lawyers were able to make a decision about many of the panel members based on that one question. Why? Because some panel members would turn to the judge and say, Do I have to answer that, Your Honor? Others would look at the prosecutors. Many panel members said, sure, and then there were a remarkable number who looked directly at Senator Hutchison and said, Kay, - or Senator Hutchison - I can give you a fair trial. In situations such as the above example, body language of the potential juror is often just as important as the answer itself. Body language is another key ingredient to identifying potentially good or bad jurors. We have seen some panel members literally sitting on the edge of their seat during voir dire. They are excited about being there and truly interested in the case. But we have also seen panel members sitting back in their chairs, with their arms and legs crossed (and not because the chair is comfortable). They are literally signaling to the lawyers that they are shutting down. Once you have gotten to know the potential jurors that are good for you, the key is keeping them on the jury. These are jurors that you believe are starting out open to your case or, said more honestly, favoring you. The chore of keeping favorable jurors is easier for prosecutors and plaintiffs than for defendants. That is because the plaintiff (prosecution) goes first. It is called buttoning up the jury. Here is how it works: Tell the good prospective jurors who have expressed some bias in your favor, There is no way you could have decided this case yet because you have not heard the. Then pause and wait for the answer. The evidence, the panel members respond. Then ask, Have you heard any witnesses? Wait for the prospective jurors to say no. Follow up that question with another. Because you haven t heard from any witnesses or seen any of the evidence, would it be fair to say that you haven t made up your mind about this case? Get the prospective juror or jurors to agree. Remind them that they have not heard the legal instructions from the judge. Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 87

If you haven t heard the law and how to apply it in this case, then you couldn t have made up your mind yet, could you? Wait for the prospective juror to answer no. Finally, recap the conversation for the sake of the judge and the record. So - summarizing what you have just told me - since you haven t seen any evidence, haven t heard from any witnesses, and haven t been instructed on the law, can you do what the judge requires and keep an open mind before deciding this case? The purpose of this question is to obtain an affirmative answer that the prospective juror can be fair. The key is to take little baby steps to save your good jurors. A second technique in buttoning up your good jurors is to warn them about the other side. Tell the prospective jurors that the other side is going to ask questions in an effort to have them removed from the case. Then you can tell the prospective jurors about ways the other side might do that. For example, tell them how a lawyer for a company might use his mother as an example of a prospective juror. He may love his mother, but he knows she is a very tenderhearted person. She is so sympathetic to victims that she would openly admit she could not serve on a jury hearing this case because the case is just too sad. The defense lawyer would tell the panel members that his mother would have to raise her hand and admit she could not put her sympathy aside to serve as a juror. Once you have told the jury panel about this technique used by some defense lawyers, explain that it does not apply to them because they do not know whether they would be sympathetic tothe victim until they have heard the evidence. Tell them that,once they have heard all the testimony, they may end up blaming the plaintiff. By doing this, you have taken away a very powerful tool of the opposition, while at the same time implying that defense attorneys are sometimes tricky. You have to figure out what the other side will try to do to strike your good jurors. Then use those tactics first and diffuse their impact by putting your own spin on them. To do this effectively, you must know both your case and the other side s case inside and out. The defense is really at a great disadvantage in this situation because it is much more difficult for them to button up their pro-defense jurors. The plaintiff s lawyer has already questioned her best jurors and gotten them to say something good for the defense. One example would be to have the pro-plaintiff juror agree to vote for the defendant if the plaintiff does not meet the burden of proof. But more importantly, plaintiff s counsel has the first opportunity to get the pro-defense juror to say things that open the door for a possible challenge for cause. There are mechanisms that defense lawyers can use to save a prospective juror the plaintiff has deemed a bad juror for her case. A mechanism that helps defendants save their good jurors is what we call the Paul Harvey argument. Pre-trial media attention is frequently very negative toward the defendant - whether the defendant is a suspected criminal in a murder case or a corporate defendant in a civil case. The defense lawyer can help save a juror that is good for his case by asking the panel members if they have heard the rest of the story. For example, a defense attorney might ask: How comfortable would you feel waiting to hear the other side of the story? Is it fair to say that you have not made up your mind, because you haven t heard our case or evidence yet? Tell me how you feel about that. Odds are great that the potential jurors are going to agree that they have not heard anything about the defendant s side of the case and they have not made up their minds. 88 Construction Law Seminar September 2012

Additionally, attorneys should assess potential jurors answers to determine if any of them may be struck for cause. A potential juror who has told the plaintiff s lawyer that he does not believe in punitive damages is a good juror for the defense. The plaintiff s lawyer hopes she has established a record that will get the person struck for cause, because if the judge does not strike the panel member for cause, the plaintiff must exercise a peremptory strike. If you are in a jurisdiction where this answer - I don t believe in punitive damages - is not sufficient to excuse the potential juror for cause, what can you, the defense attorney, do to keep such a juror on the panel? Thoroughly examine the juror questionnaire, if there is one, and review the answers the potential juror gave to the plaintiff s attorney. Although the potential juror may have been bad for the plaintiff on the issue of damages, maybe the potential juror gave some answers offering hope to the plaintiff on the question of liability. The defense attorney should avoid any discussion of damages and ask all questions about liability. He should try to get the panel member to say things that appear to be favorable to the plaintiff on liability. If he is successful, the plaintiff s lawyer may change her mind about this person. The plaintiff s attorney may start thinking this potential juror is not so bad after all. She may decide to keep the juror for liability s sake and take a chance with the damages issue. PRACTICE TIP: If you are in a jurisdiction where this answer - I don t believe in punitive damages - may rise to the level of dismissal for cause, you should first establish the potential juror s opinions by questioning him on liability issues. Then you should use questions on punitive damages in an attempt to save the potential juror from being excused for cause. The defense lawyer might ask the panel member: If the judge instructs you that punitive damages are a part of this case, can you follow the instructions? Whichever side of a case you are on, one way to protect prospective jurors identified as good for your case is to determine ways to question them so that the other side will think, Maybe this juror is not so bad for us after all. There are situations where even your best jurors are bad for you on some issues in the case. For example, a prospective juror in an environmental case who is strong on the issue of damages can be skeptical that numerous companies were sued. From the defense s perspective, that potential juror might be great for them on damages but would also be good for the plaintiff on the issue of protecting the environment. F. Goal #6: Listen to Prospective Jurors With an Open Ear and Mind That sounds obvious, right? Yet it may be the most difficult of the goals to teach lawyers. Listening is an active skill. The problem is, lawyers are too often worried about their next question and are not truly listening to the answer they have just received. Listening is not just a skill you use in voir dire. You use it in all your interpersonal relationships. You use it with your boss, your family, and your children. It might be a very enlightening exercise to ask your spouse, significant other, child, or other person close to you a couple of simple questions: Am I a good listener? What do you think I could do to be a better listener? If you improve your listening skills on a personal level, it will carry Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 89

9 over to voir dire. Many books have been written on how to listen. You can attend classes on how to listen. A person who really wants to learn how to listen should close his eyes while having a conversation with somebody at home. Closing your eyes helps you discern the audible cues you may not notice with your eyes open. You will be amazed how much more you hear. Part of listening with an open mind is not making assumptions about prospective jurors based only on their appearance or body language. Stereotyping is simply shortcutting instead of putting the time and effort into getting ready for the jury selection. One of the keys to successful voir dire is making sure that you know about the life experience and value system that a juror brings to the courtroom. By comparing those actual experiences and values to the issues in your case - instead of simply stereotyping the prospective juror - you are in an excellent position to decide if this is the right person to serve on the jury. II. Preparation: Know the Judge Of the many things a lawyer needs to do in planning for voir dire, nothing - nothing - is more important than learning about the judge. The man or woman in the black robe is the key to jury selection. The judge will determine the length of voir dire. The judge will decide how many questions you may ask. The judge will say whether there will be a questionnaire. The judge will rule on hardships and challenges for cause. Although every case is different, it is not overly difficult to find out how the judge in any case thinks and handles different voir dire-related issues. Judges are usually, if anything, consistent. For example, judges seldom allow fifteen minutes of voir dire one day and three hours of voir dire the next day. As a result, a prepared lawyer should never be surprised by a judge s ruling on any of these issues. In fact, lawyers should always walk into the courtroom with a basic understanding of how that judge usually conducts jury selection. Being prepared about the judge means being prepared to pick a jury for your client. A. Meet the Judge You can use many methods to learn about the judge in a particular case. For example, know the jurisdiction of the court. Realize a federal judge is appointed for life and never has to face the voters. Federal judges tend to severely limit the lawyer s ability to ask questions during voir dire. Most state court judges are elected, however, and jurors are potential voters. A citizen who will commit the time to serve as a juror will also likely take the time to vote. Elected judges are much more likely to pay attention to the needs of the jurors. Of course, these generalities are not always true. We know of state judges who totally ignore juror needs by keeping them waiting and uninformed as to the process, and by being unreceptive to the juror s personal needs. We know of federal judges who are highly attentive, sensitive, and receptive to the needs of the jurors. 9 See, e.g., THOMAS E. ANASTASI, LISTEN! TECHNIQUES FOR IMPROVING COMMUNICATION SKILLS (1982); DAVID W. AUGSBURGER, CARING ENOUGH TO HEAR AND BE HEARD (1982); KATHLEEN M. GALVIN, LISTENING BY DOING: DEVELOPING EFFECTIVE LISTENING SKILLS (1985); ROGER FISHER, GETTING TO YES: NEGOTIATION AGREEMENTS WITHOUT GIVING IN (1981). 90 Construction Law Seminar September 2012

How can you learn about the judge in your case? For the judges in your own jurisdiction, the first step is to attend bench-bar meetings. Most local and state bars have annual conferences in which judges and lawyers gather for a day or a weekend to discuss issues. These programs allow attorneys to hear judges on discussion panels and to talk to them over drinks at receptions. There is no better opportunity to develop a personal relationship with a judge than during the bench-bar conferences. The judges are easily approachable during these events. You can get to know the judges and learn a great deal about them. In fact, we would even suggest not just attending the bench-bar conferences but truly getting involved with them. Help plan and organize your local or federal bar conferences. In most circumstances, the organizing committees are comprised of lawyers and judges, which brings you in direct contact and communication with the judges. The judges appreciate your involvement. It is a unique opportunity to gain insight about the judges. The more you can be on committees with judges, the more you get to know them on a personal level. You can never know a judge too well, if you are going to be practicing before him. For federal judges, each federal judicial circuit conducts annual programs that last three or four days. Be there. Attend the programs. Meet the judges. Listen to the judges. In addition, Aspen Law & Business publishes a wonderful book called the Almanac of the 10 Federal Judiciary. The Almanac gives the background of every sitting federal judge and the significant cases she has handled. But it also has a section in which lawyers who have practiced before the judge can give anonymous comments about the conduct of the judge. What a valuable tool! We just wish there was a similar book for every state court system. Local organizations, such as state and local bar associations, are also helpful tools to learn about judges. The Association of Trial Lawyers of America has chapters in most cities and communities, as does the National Association of Defense Counsel and the National Association of Criminal Defense Lawyers. The American Board of Trial Advocates and the Inns of Court are also valuable organizations. Participating with any of these groups will allow you to meet other lawyers who have practiced before the judge handling your case. There are things you can do if your case goes to trial outside of your local area. First, conduct a simple Westlaw search on that judge. A local newspaper, regional legal publication, or state bar magazine may have done a profile of the judge that will provide key information. Second, contact a lawyer who has appeared before the judge to find out his opinion and insight. B. Learn the Judge s Personality and Preferences Our experience has been that judges, especially newly-appointed or newly-elected judges, who have spent most of their careers as insurance defense lawyers are going to start out pro-defense. A judge with a plaintiff s practice background is typically going to start out with a pro-plaintiff leaning. There are some exceptions, of course, but we have found them to truly be the exceptions. Like jurors, judges are the product of their life experiences. It is important to know what to expect and then to use the information you garner about the judge to your advantage. For example, if Lisa learns that the trial judge in her 10 ALMANAC OF THE FEDERAL JUDICIARY (1984). Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 91

case is a former prosecutor, she will subtly let it be known that she served several years as an assistant district attorney prosecuting cases in the organized crime division. Lisa and the judge may share stories about their days in the prosecutor s office, and this could help her develop a bond with the judge. The bottom line is this: When you walk into the courtroom, you need to know the personality of the judge. You need to know how the judge conducts voir dire. You need to know the judge s pet peeves and pet projects. PRACTICE TIP: Why not either call the judge s office and ask to come in and talk to the judge, or simply drop by the judge s chambers and introduce yourself? Let the judge know you do not want to talk about the case. Tell the judge that you want to learn the things she likes or dislikes so you can be prepared. Ask the judge if there are any local or court-specific rules that relate to jury selection or trying a case in her court. Do this as soon as you possibly can in the case. Now, here is a huge no-no: Lawyers unfortunately send associates or persons other than trial counsel to visit the judge. Do not do that. It makes the judge think that you are too important to visit her yourself or that you have sent an associate to scout out information. The lead counsel needs to be the individual who knocks on the judge s door. When you walk into a judge s chambers, the judge knows you have a case in front of her and may become nervous that you will say something inappropriate. That is why you should explain when you arrive that you are there simply because you want to make sure you know any rules that relate to jury selection or trying a case in her court. Ask the judge outright: What are the dos and don ts in your courtroom? The idea here is to discover pet peeves. It may be something incredibly small or unimaginable that aggravates a judge. A great example of a pet peeve is when we asked a paralegal to move the podium in a courtroom to make more room for jury selection. The bailiff saw what was happening and informed the judge, who was still in chambers. Minutes later the judge stormed out in anger and stated, literally, Somebody s going to jail for this! Another example comes from when Lisa was trying a case in Tucson, Arizona a few years ago. The first thing she did before one of the preliminary hearings was drop by the judge s chambers to say hello and introduce herself. Lisa told the judge she needed to ask his preference on something. This may sound like a strange question but is it okay if I wear pants in your courtroom? Because it was a bench trial, Lisa did not want to wear something that would irritate the judge. To ensure that a juror or judge does not punish you for doing something, it is important to get that other person s permission first. The Arizona judge had no problem with women lawyers wearing pants in his courtroom. But some judges, especially in some southern jurisdictions, think it is inappropriate. Some of the non-case-related issues to talk to the judge about are: Is it okay to bring food for the court personnel? How about bringing food to the jurors? When can I get in and out of your courtroom before and after trial? Is storage space available for our documents? Can courtroom furniture be moved? What, if any, local rules do I need to read or be aware of? Does this court have specific written rules? Are briefcases allowed on the counsel table? Does the judge allow water bottles in the courtroom? (One Texas judge does not allow labels on water bottles because he sees it as a form of advertising.) What are the judge s rules for cell phones, pagers, and computers - not only 92 Construction Law Seminar September 2012

for the lawyers and their staff but also for the jurors? Another good question to ask the judge is whether she would recommend any lawyers who have practiced before her and know her preferences that you could talk to. You could also ask whether the judge was a visual or auditory learner to help you in your selection of exhibits. You are reassuring the judge that you want to come to court prepared to do a better job. C. Know Other Courtroom Personnel A key piece of information to find out early in your case is who, besides the judge, has power in the courtroom. Sometimes it is the clerk. Other times it is the bailiff. It can be the judge s secretary or court coordinator. You must determine who is the power broker, aside from the judge, who wields the most power and information. How do you find out? The first way is to ask a colleague who has practiced before your judge. Second, of course, is simply to ask: Who should a lawyer address questions to, besides the judge? Simple observation skills should also reveal the answer. For example if you have a hearing before the judge, arrive early and have conversations with the court personnel. Watch and listen. The person with the access to the judge will reveal important, insightful, and helpful information about the judge. Be sure to know the first names of all the important players in the courtroom. Once you have determined who that person is, you must talk to the person about the dos and don ts, such as moving the furniture. Some judges conduct a lengthy voir dire before turning the panel over to the lawyers. Other judges give a very short introduction and turn it right over to the lawyers. You need to talk to the court staff to learn what kind of introduction the judge does. This way you do not repeat in your voir dire what the judge has already covered. The more you know about the rules of the game, the better prepared you will be. The more you know about the rules of the game, the better you will perform in court. The more you know about the rules of the game, the more the judge will respect your advocacy skills and preparation. That is why being as informed as possible is so critically important. Developing a relationship with your local court personnel is very important in other ways, too. Many times, court officers control access to the judge. Often, the judge will rely on the judgment of court officials to determine such things as whether certain technology can be easily accommodated in the courtroom, whether the courtroom can handle certain exhibits, or whether the jurors can be taken on field trips. Court coordinators are often the lifeblood to the judge, so they wield a lot of power in the courtroom. Too many lawyers are so focused on their case and their clients that they do not bother to treat the court coordinator or clerks in a nice manner or give them the respect they deserve. PRACTICE TIP: Be sure that your office runner develops an excellent relationship with the court personnel because that person will have a tremendous amount of contact with court personnel. Another reason you should treat court personnel with respect is because you want the jury to observe that you have a good rapport with the staff. You want the potential jurors to see that the bailiffs like you and care about you. Jurors pick up on the unspoken likes and dislikes of bailiffs and court staff. You want to be one of their likes. Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 93

Once you have developed a solid rapport with the bailiff or court personnel, they can tell you if the jurors are happy. Are they interested in the trial? Are the jurors complaining a lot? Are they itching to go home? In a recent high profile case in Seattle, after nine weeks of trial, the bailiff told one side of the litigation that the jurors had made a sign that said, Will work to go HOME. The jurors were clearly expressing their frustration with the length of the trial. This information was very helpful to the lawyer in deciding the length of her cross-examination as well as her closing argument. This jury reached a defense verdict. Why is this important? An unhappy jury frequently means an unfavorable verdict for plaintiffs and a positive verdict for defendants in civil cases. Every lawyer should ask bailiffs whether the jury is happy or unhappy. If more lawyers did, the number of settlements may increase. Of the hundreds of civil cases we have tried, we have never witnessed an unhappy jury find in favor of the plaintiff. Never. It does not even matter what the jurors are unhappy about - even if the jurors think the defendant is dragging the case out! Unhappy is unhappy, and that is bad for the plaintiff. Unhappy just means get me out of here! In criminal cases, unhappy jurors are typically bad news for the defense. Unhappy juries often return a guilty verdict. There is one exception. Sometimes we pick juries where we intentionally want them to despise each other. We want them to not like anything about each other. That is how to pick a hung jury. PRACTICE TIP: Do not be afraid to ask for the home and work phone numbers of the judge, law clerks, bailiff, and court reporter. You never know when you will face an emergency that causes you to be late to court or whether you will need testimony transcribed overnight. Also, having these phone numbers can save you and your client some embarrassment. Some lawyers do surveys as part of research for a change of venue or juror attitudes. Particularly when you do a survey in a small jurisdiction, the last thing you want is for someone to call the judge or his court officers as part of the survey. This happened to us in Mississippi, where pollsters randomly pulled phone numbers, and - loand-behold - they actually called a clerk and the judge in our case. Needless to say, all hell broke loose. Extensive hearings were held over whether we were trying to influence the jury pool or were doing something improper. The obvious lesson here is, if you conduct pre-trial jury surveys or polling, be sure to have the judge and court personnel removed from the list! So here is the bottom line: As a trial lawyer, knowing as much as you can about the judge, the judge s rules, and what can irritate the judge is valuable and essential information. When you know the rules, you increase you chances of success. Conversely, when the lawyer does not know the rules, the judge is unhappy with the lawyer, the jury knows the judge is displeased with the unprepared lawyer, and unfortunately it is the client who often suffers the consequences. III. Preparation: The Voir Dire Numbers The following scenario is repeated over and over in courtrooms across the country. The judge calls a minimum number of prospective jurors for voir dire. Several panel members are dismissed for hardship or cause. Each side will be entitled to a certain 94 Construction Law Seminar September 2012

number of peremptory strikes, but as the lawyers and judge examine the pool as voir dire nears conclusion, they notice a disturbing development: There may not be enough people left in the jury pool to seat a panel of twelve. Panel members who should be excused for hardship or cause are rehabilitated in order to have enough jurors. The unfortunate result: Most judges call it quits, send the remaining jurors home, and reschedule for a future date. No one wins in this scenario. Plaintiffs, seeking their day in court, have to wait for justice. Defendants, usually paying their lawyers by the hour, see their day of vindication delayed and their legal costs increased. Criminal defendants usually have to remain behind bars pending the conclusion of their trial. Prosecutors have to tell a victim s family members that their day in court has been delayed. As is frequently stated, justice delayed is often justice denied. An extremely overlooked aspect of preparing for voir dire is the math. No, you do not have to be a physics professor to understand this. We are referring to simple addition and subtraction, as in 12 plus X, plus Y. The formula, somewhat algebraic in nature, is extremely easy to understand: Start with the premise that you are selecting a twelveperson jury. Add in X, which represents the number of peremptory strikes that each side gets. Then take into account Y, those jurors who are dismissed due to hardships, conflicts, or other reasons for cause. A. Developing a Formula Lawyers need to start thinking about the size of the jury pool weeks or even months before the scheduled trial date. Our opinion is that it is never too early to start thinking about this issue. Take into consideration a series of different factors that could play havoc with jury selection, and find a formula for determining how many prospective jurors will be needed. Developing such a formula is certainly not an absolute science, but it can be a terrific guide in your pretrial planning as to how to approach voir dire and how best to seek additional jurors from the court. First, you should consider the issues in your case and the jurisdiction where the trial is being conducted. Does your case involve subject matter that is highly personal or sensitive or that may preclude jurors from serving or being able to serve on this particular case? For example, a case about racially mixed marriages in the Deep South or about sexually abusive priests in a highly Catholic community could cause local citizens to be dismissed from serving on the case due to bias. Of course, naturally divisive issues - such as abortion, death penalty, punitive damages, risks of smoking, health maintenance organizations, racial profiling, and corporate malfeasance - can be problematic no matter where you are trying the case. 11 Second, consider the judge. Do some background research on the judge in your case to determine what her attitude is toward dismissing jurors for cause. The best way to learn this is to talk to lawyers who have practiced before your judge. Some judges take the position that serving on a jury is just like serving in the military: Except under the most extraordinary circumstances, everyone must serve. Some judges believe they do not have the authority under the law to dismiss people for economic hardship or long-planned vacations. Other judges are much more practical and understand that it is easier to find a few more jurors than it is to handle disgruntled jurors. Third, how long is your case likely to last? The longer the trial, the more jurors who 11 See Section II supra. Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 95

will seek to get out of it due to some hardship. By the way, when calculating the length of your trial, include voir dire, opening statements, closing arguments, the judge s charge, and even deliberations. You can bet the judge and the jurors count those. You should, too. A trial that lasts two or three days will require very few potential jurors to be dismissed due to hardship. But a trial that takes two or three months may result in sixty percent, or even seventy percent, of the hands going up claiming some kind of hardship. The kinds of hardship with lengthier trials can range from prepaid airline tickets, medical problems, and financial crunches to issues involving work. A good rule of thumb is that, for every week you expect your trial to last, you will lose ten percent of the panel. So in a fifty-person panel that expects a one-week trial, an average of five people will raise their hands seeking excusal based on hardships. For a two-week trial, about ten people will raise their hands. Fifteen people will seek dismissal for a three-week trial. There is a correlation between the length of the trial and the number of people who will claim a hardship. When considering the length of the trial, jurisdiction can become a factor. In some cities in Florida, for example, eighty percent of the jury panel are retirees. It does not matter to most of them if the trial lasts one day, one week, or one month. By contrast, we had to pick a jury in Nebraska during harvesting season, and we lost a lot of people because they had to work their fields. Fourth, is there any kind of publicity about your case or has the case gained any kind of notoriety? The more infamous the case or the more famous a client, the more likely people will express their biases. Fifth, a tremendously overlooked element in calculating how many jurors need to be called is how many people the other side will get excused. When planning, you cannot forget that there is an advocate on the other side of the courtroom who is trying to have jurors excused or dismissed who are completely different than the jurors you are targeting. This factor could significantly increase the number of necessary jurors. Why is it important to determine yourself how many prospective jurors should be summonsed for jury duty in your case? There is nothing more frustrating than having your case ready for trial only to have so many jurors dismissed by the judge for cause that there are not enough left in the pool to fill the jury box. Surprisingly, this happens all the time. B. Affecting the Size of the Jury Pool Generally speaking, judges want to call as few jurors as possible to save court administrators money. Judges also wish to spare as many citizens as possible the hassles of jury service. Judges do not want to be criticized by their colleagues within the same courthouse that they are taking all the jurors for their cases. If one judge asks for such a large number of prospective jurors that there are not enough jurors for other judges to panel, then that could cause a political problem. But fewer potential jurors also means that judges are likely to be much more conservative in releasing jurors based on hardships or for cause. Most lawyers believe they can do nothing to remedy or address this problem. We strongly disagree. True, it is not your job to call the jurors. The judge tells the clerk of the court how many jurors will be needed for upcoming trials. The jury commissioner and clerk are just following the instructions of the judges when they mail the notices of jury service. The trial court seldom asks the lawyers their opinion about how many prospective jurors should be sent summonses. That does not mean the lawyer cannot be heard on the topic. The issue for the trial 96 Construction Law Seminar September 2012

lawyer is how to convince the judge to instruct the clerk or the jury commissioner to send out additional summonses. We recommend the lawyer not wait until the morning of jury selection to address the need for additional potential jurors. By then, it is too late. Instead of getting you more jurors, the judge is likely to severely limit strikes for cause or hardship or to postpone the trial for weeks or months - neither of which is an acceptable solution. Now, there are questions about how early an attorney should bring the issue of expanding the jury pool to the attention of the judge. If you raise the issue of increasing the size of the panel too early, it might affect your trial date. For example, by telling the judge that there are many issues that could cause an increased number of dismissals and excuses, the judge may become concerned that he has not blocked out enough time for the trial and may postpone the case. The problem with this argument is that, if the request to expand the pool scares the judge early on, it will scare the judge no matter when you raise the issue. If the judge is going to react adversely to your request, you might as well know about it earlier rather than later. That being said, the lawyer who raises it too early risks a possible disconnect problem with the judge. By this we mean that most judges have a very full docket, and they do not truly start to focus on your case or the elements of your trial until the few weeks before it is scheduled to start. If you raise the need to summon additional jurors before the judge has a basic understanding of the case, you risk the judge summarily waving aside your petition. Even when the judge is eventually brought up to speed on the issues of the case that explain why you thought extra jurors were needed, the judge may be reluctant - or, heaven forbid, too stubborn - to reverse his earlier decision. We can imagine the following scenario as clearly as if it had happened to us - mainly because it has happened to us: Mr. Hirschhorn, you raised the issue of additional panel members with me last month, the judge says, I said no then, and I m not changing my mind now. So make sure the judge understands the complexities of the trial before you ask him to order up an additional hundred jurors. C. Handling a Large Jury Pool Once you understand that size really does matter, it is time to destroy a myth: Bigger is not always better. Sometimes the pool can get so big that it is unwieldy, uncontrollable and unmanageable. With too many prospective jurors, you risk losing control, and a herd mentality among the jurors can start to develop. The larger the jury pool, the longer everything takes. A few years ago we tried a series of high profile asbestos cases in Tyler, Texas. The defendant was one of the largest and most respected East Texas corporations. Everyone in Tyler either worked at this company, knew someone who did, or knew one of the plaintiffs. The judge, realizing there would be many hardships and conflicts of interest, summonsed 240 prospective jurors. He put us in a high school gymnasium to conduct voir dire. Of course, a larger jury pool means both sides need more time to potential jurors. But the large pools also tend to cause other portions of the case to take more time, too. For example, fifteen-minute restroom or smoke breaks quickly become twenty-five minute breaks. An hour-long lunch turns into a seventy-five-minute lunch. With a 300- or 400- person pool, restroom breaks grow to thirty minutes and lunch expands to ninety minutes or more. The larger the pool, the more difficult it is to get people to talk about their own problems or prejudices. People are less likely to stand up or speak up in a large room or Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 97

gymnasium in front of several hundred people to tell you about past drinking problems or some other extremely personal issue that might cause them to be a bad juror. Also, the larger the pool, the more likely some of the people are to think that the case is high profile, that it is a big murder trial or that lots of money is at stake. Attitudes change as a result, and potential jurors try to answer questions deliberately so as to be chosen or excused. You do not get completely truthful answers, which is what you want and need to determine if the person would make a good juror in this particular case. Psychologically, big jury panels say something about the case that you may not want potential jurors to think. In addition, large juror pools also run the danger of gaining a mob mentality during voir dire. There are always a handful of potential jurors who are very outspoken. These are the panel members you wish had the fear of public speaking. Instead, they love to speak out in public and they love to express very strong views. These people incite and lead the mob mentality by making incredibly prejudicial statements. An outspoken juror may start off by saying that all plaintiffs lawyers are ambulance chasers or that all corporations are thieves and crooks. Once the ball gets rolling, other people in the room speak up and say something like, The only thing all lawyers or corporations care about is their money, not their clients or customers. The tone then raises to a fevered pitch, with everyone laughing along with that potential juror. When the panel members start clapping their hands and laughing at the lawyer or the client, you know things have spun out of control. The question is, do you keep all the panel members together when so many have been called, or do you ask the judge to split the panel into smaller groups? It depends on which side you are representing. If you are the plaintiff, consider questioning the whole panel together. If you are the defendant, consider splitting it into smaller groups. Why? The number one goal for plaintiffs lawyers is to dismiss as many bad jurors as possible. Once you start getting people to admit they have a leaning, prejudgment, bias or prejudice on some of your issues, it is much easier at that point to get a bunch of hands to go up as well. But defense attorneys have a distinct advantage when large pools are split into two or three groups. First, the defense lawyer can learn the plaintiffs attorneys techniques from the questioning of the first group and allows him to better prepare for the second and subsequent groups. Second, defense lawyers are better able to rehabilitate their good jurors or change their techniques for the second and third groups. PRACTICETIP for defense attorneys: When a judge appears ready to grant a plaintiff s motion to call a large panel for voir dire, the defense lawyer should ask the court to allow both sides to give a brief, five-minute statement to the prospective jurors about the case and the issues. If the panel is 200 or more people, the plaintiffs attorney or prosecutor will likely take a few hours if not a couple days questioning jurors. As a result, the plaintiff or prosecutor is spending all that time putting his issues and his side of the case in the minds of the jurors without the defense having any chance to put forth ideas. The long voir dire allows the first side - plaintiff or prosecutor - the opportunity to develop a relationship or bond with the jurors. A defense lawyer should tell the judge that, because it is going to be a long time before the jurors hear from them, they fear the plaintiff s lawyers will try to have many potential jurors excused before those people have heard any issues in the case and before the defendants have had a chance to try to rehabilitate them. Request that the judge give each side a five-minute mini-opening before voir dire begins. We have seen this make a huge difference for the defendants because the jurors begin with a sense that there is 98 Construction Law Seminar September 2012

another side to this story, and even begin to see the weaknesses in the plaintiff s case. Without such a defense statement, the plaintiff s lawyer or prosecutor has the chance to influence the jury panel and to get panel members excused before the other side has any opportunity to respond. Before you think judges will never approve such a request, we point to jurisdictions all over the country where judges are letting this happen. Some courts actually require the lawyers to give mini-opening statements before voir dire begins. It helps take away the significant advantage of going first. Conclusion To conclude, we offer three quick suggestions to help you get a good start with voir dire. First, know everything about your case. The more you know your case, the more you know what kinds of questions you need to ask, the issues you need to address, and what kinds of jurors you want on and off the jury. The more you know about your case, the more comfortable you will feel standing in front of the jury. Second, brainstorm your case. Gather your staff together - including the lawyers, legal secretaries, paralegals, legal assistants, or other members of your office staff - and jot down on a flip chart every strength and weakness in the case. This is known as brainstorming your case. Brainstorming allows you to flush out as many ideas as possible to help identify positive and negative aspects of the case. The brainstorming can include input from friends, neighbors, family members, or jury consultants - any number of sources that you value and respect. One purpose behind the brainstorming is to get a reality check on the case. Always do this prior to voir dire in your case. When lawyers become totally focused on their case, they sometimes overlook or fail to see certain issues. Brainstorming will bring out these issues that the lawyer might otherwise miss. Third, we recommend that you remember back to the first time your client walked into your office. It is that first meeting when you, the lawyer, are most like a member of the jury. You are getting your first impression of the client and his story. As a lawyer representing a plaintiff, you are thinking, Is someone responsible for this tragedy? Are there viable legal theories to hold someone (or some company) responsible? Do they deserve money? Does the defendant have the resources to pay? As a defense lawyer, you might be thinking, Do we have a good defense? How can I sell this defense? Should I try to win this case on liability, or is this a case where the client will be happy if we keep the damages down? Those questions are asked in an effort to develop instincts about your case so that you can later format your voir dire questions to select the best possible jury based on the issues in the case. It is crucial for the lawyer to remember this message: It is never too early to begin planning for voir dire. Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 99

IV. A Guide to Analyzing Jury Questionnaires in Civil Cases A Guide to Analyzing Jury Questionnaires in Civil Cases by Lisa Blue, PhD and Robert Hirschhorn, Esq. Lisa Blue is an attorney specializing in toxic tort litigation with the law firm of Baron & Budd, P.C. in Dallas; she also maintains a practice as a counseling and forensic psychologist. Robert Hirschhorn is an attorney and lead jury consultant for Cathy E. Bennett & Assoc. Inc, a nationally known jury and trial-consulting firm located in the Dallas/Ft. Worth area. The authors latest book will be published this year by West Publishing: ATLA s Blue Guide to Jury Selection. The amount of time you are given to review your jury questionnaires will determine the degree to which you can analyze them. In most cases, you ll have only a few hours to read through a stack of questionnaires and analyze the significance of the panel members answers. This means you will have to prioritize the goals of your voir dire, so that you start your analysis by focusing on the most important factor and move down your list from there. If you are more concerned about seating a jury that will find the defendant liable, for example, than one that will award high damages, this is where you should focus your analysis. While we re on the subject of time constraints, we should mention that it s wise not to create a questionnaire that is so long you won t have time to read each panel members answers thoroughly. This means that, in the majority of cases, a one-page questionnaire is appropriate. You can glean a surprising amount of valuable information from a one-page questionnaire if you know what to look for. On the most basic level, you re going to look at the content of the jurors answers. But if time permits, you should look beyond the content to the way the jurors are answering the questions. One thing that may jump out at you, for 100 Construction Law Seminar September 2012

example, is a panel member who uses a lot of capital letters and exclamation points when answering certain questions. You should pay attention to what types of questions he feels this strongly about and think about whether his feelings on that issue would benefit or hurt your client. Something less obvious you should look for if time permits are themes that develop in panel members questionnaires. For instance, one panel member might continuously refer to the importance of family, express strong family values, and list hobbies that are family-centered. This information can be useful in several ways. This juror might be especially good for a loss of companionship claim, for example; or you can use the information as an avenue for helping that juror bond with your client by having your client talk about how important family values are to him. Because jury questionnaires are useful on so many levels, we ve written this article to walk you through a careful analysis of a standard one-page questionnaire. The sample questionnaire we ve used is from a personal injury case. We hope this step-by-step analysis will be help you learn how to get the most out of jury questionnaires. Age. The juror s age is important because it tells you what generation he belongs to, which can be a good indication of his belief systems. For example, jurors from Generation Y, which will be everyone on your panel in their midtwenties and younger, tend to be holistic. This means they are often more sympathetic to the problems of others and may be good plaintiff s jurors. Jurors from the World War II generation, on the other hand, may not be good jurors for a plaintiff who is looking for a substantial damage award because they tend to be more frugal. Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 101

The juror s age is also important because it may effect how he relates to your client. Conventional wisdom held that jurors in the same age group as your client would be more empathetic toward her. We ve noticed, however, that jurors in the client s peer group are often more critical of clients. Finding out whether a juror tends to socialize with people his own age or is more likely to have friends that are younger or older than him is a good clue as to how he may react to your client. 1. Education. The first thing you re looking for in the juror s educational background is simply his education level. Generally speaking, people with higher education levels have a more sophisticated kind of intelligence. This may be important if your case is particularly complicated or technical. We do not mean to say, however, that the less-educated jurors are unintelligent. There are many reasons intelligent people do not obtain college degrees. The juror s responses to other questions should give you a good idea of his intelligence level. You also want to look at what the juror studied in school. The juror s area of study or type of degree can indicate what type of thinker he is. By this we mean how he processes information. A person with a degree in electrical engineering, for example, is going to be a more logical juror; whereas, a person with a master s in social work is likely to be more visceral. Knowing how your jurors process information is important when it comes to deciding the most effective way to present your evidence. 2. Work history. Because our jobs occupy so much of our time, what a person does for a living reveals a lot about his belief systems. Of course, the kind of work a person does can give you a good idea of his value system for 102 Construction Law Seminar September 2012

example, whether he works for a non-profit organization or a bank but how long he s been at that job also tells you something important about the juror. Some people experience what we call the nesting effect. These individuals hold one job for a long period of time (they are also usually married to one spouse for a long time). The nesting effect indicates that a person has strong family values. As with education, work history can also tell you if juror has experience in an area related to your case as well as how he processes information. 3. Training. This question is similar to the education question but is important for jurors who don t have degrees as well as all those people out there who ended up in jobs completely unrelated to their degrees. If a juror has a particular expertise in an area relevant to your case, you need to know this. Seating a juror like this is like having an additional expert witness. She will consider herself an expert on that subject, and the other jurors may too. 4. Feelings about lawsuits. Pay careful attention to the wording of this question. We ask the jurors to tell us their feelings or opinions about personal injury lawsuits. We word the question this way because we ve found that the visceral jurors tend to give answers like nothing when asked what they think about personal injury lawsuits, and the cerebral jurors tend to give the nothing answer when asked how they feel about these kinds of lawsuits. Although the question may seem repetitive, it s actually been carefully worded to get answers from as many jurors as possible. Notice also that this is an open-ended question. In light of the fact that tort reform and lawsuit abuse have been hot topics lately, we want to give the Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 103

jurors the opportunity to express themselves in their own words on this issue. We think this is one of the most important questions to ask in every civil lawsuit. Although the question in our sample questionnaire is about personal injury lawsuits, the question could easily be reworded to read, What are your feelings or opinions about people who bring civil lawsuits? A negative answer to this question should always raise a red flag for a plaintiff s attorney. 5. Would you sue? When asked whether they would sue if injured by someone else s negligence, many jurors will give answers like, I m not sure or It depends. The reasons they give for their uncertainty can tell you the quantity and quality of evidence you will need to present at trial. As for the jurors who actually give unconditional answers to this question, you should absolutely follow-up with them in voir dire. Start out by making sure they truly understood the question, explaining that in your hypothetical question the other person really was responsible for a serious injury because of his negligence. People who indicate that they would not sue, even after having the question explained to them, are extremely unfavorable jurors for plaintiffs. This is true because people tend to impose their own belief systems onto others, so they will believe your client shouldn t be suing the defendant. Although this question is valuable to attorneys on both sides in all civil cases, it is the most important question for a plaintiff s lawyer in a personal injury lawsuit. 6. Future and soft damages. Any juror who says she could never award money in these areas can be disqualified in a personal injury case. Before you can disqualify the juror, however, you must follow-up with her to make sure she understands that the law requires her to award these damages if the 104 Construction Law Seminar September 2012

evidence supports such an award. Even if the juror retracts her position in voir dire (perhaps after being questioned by the judge) and says that she would be willing to listen to all the evidence before making a decision on that issue, you should consider striking her with a peremptory. It s been our experience that the jurors belief systems will ultimately dictate their decisions, and jurors who answer this question no initially rarely change their minds. 7. Punitive damages. First, we want to point out the importance of defining the term punitive damages along with the question. Most jurors have heard the term and have some idea what it means, but the majority of them will be unsure of its exact definition. Because punitive damages is another hotbutton issue, we also made this question open-ended to identify which jurors have particularly strong feelings on the subject. If your case truly involves punitive damages, this question is a must. 8. Personal experience with lawsuits. If a juror has been a party to a lawsuit himself, he often starts out empathetic toward the side he was on in his lawsuit. However, the outcome of his case will greatly affect his feelings about your client. We follow up this question by asking the juror what the outcome of his case was and whether he has any negative feelings because of that outcome. If a juror filed a lawsuit and did not get the award he thought he deserved, for example, he may be especially hostile to a defendant. Any time you have a juror who s been a party to a lawsuit, find out what kind of suit it was, what the outcome was, and how he feels about that outcome. 9. Prior jury service. Our research has shown that a juror with previous jury experience is often elected foreperson. This is particularly true if Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 105

he was the foreperson on the prior jury. Even if that juror is not elected foreperson, other jurors are likely to look to him for leadership in deliberations. It s important to know how these potential leaders will react to your case. We recommend asking the juror what kind of case he sat on, whether he was the foreperson, and what the verdict was. Lawyers are often reluctant to ask the juror the verdict because they feel it is improper. There is no prohibition against asking a juror this question the verdict is public record. That being said, it is clearly inappropriate to ask the juror any questions about the deliberative process during his prior service. We also recommend that you ask the juror whether he has any negative feelings about his previous experience on a jury. If there was anything that bothered him about his prior service that you can avoid in your case, you need to know that. Jurors often tell us, for example, that they were annoyed by lawyers who kept repeating themselves. This is an annoyance you certainly want to avoid. When space permits, we recommend adding the following two questions to your questionnaire: 1) Did your prior jury service cause you to have any favorable or unfavorable views of the justice system? and 2) Would any of your feelings about your prior jury service carry over into your service on this case? 10. Television and newspapers. You can learn a lot about a person by what TV shows she watches. A juror s regular viewing choices give you an insight into her personality. Similarly, what a juror chooses to read, if anything, also says a lot about her. For example, many cities have alternative weekly papers that are much more liberal than their mainstream counterparts. A 106 Construction Law Seminar September 2012

woman who regularly reads Atlanta s weekly alternative, Creative Loafing, will probably be driven by a different value system than one who sticks to the more conservative Atlanta Daily Constitution. 11. Organizations. The answer to this question provides a snapshot into the juror s life. It tells you what he values and what anchors him in the community. Does he belong to a charitable organization or a country club? A union? A political organization? A juror s social affiliations often reveal how he might react to the issues in your case. 12. People they admire most and least. Besides gaining information from this question, you also gain insight into the juror s thought process. Some jurors list all family members as the people they admire most, while other jurors put no family members on their lists. The former indicates people who are going to be receptive, for example, to evidence about loss of companionship. A juror who lists all businesspeople and politicians, on the other hand, is likely to be more analytical, which means a different kind of evidence will appeal to him. We usually see public figures on the least-admired list, such as the current President or Sadaam Hussein. Jurors whose least-admired list is more personal, naming perhaps an ex-spouse or former friend, are telling you that they ve had some dramatic negative experiences that are still influencing them. Don t overlook the unconscious clues either. For example, if a male juror lists his three least-admired people as the Devil, Osama Bin Laden, and Hillary Clinton, he has some serious issues with strong women. Besides looking at each name on the lists, look at the lists as a whole to see if they re telling you anything else about the juror. Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 107

13. Adjectives. This is one of the must have questions. How the jurors view themselves reveals a tremendous amount about their value systems and life experiences. We ve provided a sample adjective question, but be sure to tailor your adjectives to your case. If your main goal as a defendant, for example, is to keep the damage award to a minimum, it s important for you to find out which jurors consider themselves generous and keep them off your jury. 14. Hobbies and interests. Learning what the jurors do with their time will tell you what motivates them. Reading the answer to this question is like looking through a window into their homes. Their personal priorities and values will greatly affect how they perceive the issues in your case. Politics. Many people s answers to the political question will mirror how they feel about the current President. Jurors who like the President are going to align themselves with him politically, and conversely, jurors who dislike the President are going to identify themselves with the contrary view. The greatest value in this question is that it identifies jurors who are more inclined to go against popular opinion. Financial decisions. The purpose of this question is to find out which jurors are comfortable dealing with financial issues in general. When you re asking the jurors to make a financial decision that will have a significant impact on your client, you want to know which will be instrumental in the decision and which are more likely to sit quietly while the numbers are being crunched in deliberations. 108 Construction Law Seminar September 2012

15. The hardship and catch-all questions. The last two questions are strategically placed at the end of the questionnaire. The first question allows the jurors to discuss any hardships that would prevent them from sitting on the jury. We put this questionnaire at the end because we don t want jurors to start out thinking, I m not going to be on this jury anyway, and then not take the rest of the questionnaire seriously. The very last question we ask gives the jurors an opportunity to vent. They can say anything that s on their minds. This catch-all question is sometimes referred to as a Rorschach question because it allows the jurors to blurt out whatever they re thinking. We also call it an oyster question, because you have to shuck a lot of oyster to get a pearl. By that we mean most of the answers to this questions are run-of-the-mill, but when you get a good one, it can be the most important answer on the questionnaire. When a juror has a strong opinion about an issue in your case, the justice system in general, or anything remotely relevant, you will see it in this answer. We think this powerful question should be at the end of every questionnaire because it often answers the question you never thought to ask. Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 109

V. Dos and Don ts Dos of and Jury Questionnaires Don ts of Jury Questionnaires Lisa Blue is a shareholder practicing toxic-tort litigation with Baron & Budd in Dallas. She also maintains a practice as a counseling and forensic psychologist. Robert Hirschhorn is an attorney and lead jury consultant for Cathy E. Bennett & Associates Inc., a jury and trial-consulting firm located in the Dallas- Fort Worth area. West Publishing will publish the authors latest book ATLA s Blue Guide to Jury Selection this year. by LISA BLUE and ROBERT HIRSCHHORN Most attorneys think of jury questionnaires as time-saving devices and they are. But they re also valuable for other reasons. For example, while the content of the panel members answers can tell a lawyer how they feel about a case, the way in which they answer may reveal how they process information. This is important as a lawyer decides the most effective way to present evidence. Some jurors, for example, absorb information better through visual aids; others may rely heavily on statistical data when making decisions. Another often-overlooked use of questionnaires is identifying areas for bonding. An attorney may learn, for instance, that a panel member has a hobby in common with the client or belongs to the same organization as one of the expert witnesses. Never overlook an opportunity to help jurors connect with the individuals on your side of the case. Because jury questionnaires are an important tool on so many levels, it s essential to craft questionnaires that elicit the most information, in quality and quantity, possible. There is no ideal jury questionnaire, but there are several techniques a lawyer can use to improve questionnaires and tailor them to each case. Here are some of the most important dos and don ts of creating effective jury questionnaires: Do start with a confidentiality statement. Voir dire can be intimidating to prospective jurors especially when they see topics on the questionnaire that they consider private. Attach a cover sheet explaining that the information the panel members provide will be kept confidential. Also ask them to write private next to any answer they are not comfortable discussing openly during voir dire. If the jurors trust that the lawyer will respect their privacy, they will be more forthcoming on their questionnaires. 110 Construction Law Seminar September 2012

Do number questions. This sounds simple enough, but we ve seen too many cases where no one thought to number the questions. Fumbling through questionnaires makes it difficult to discuss the answers with the judge and other attorney. Anything that makes the questionnaire harder to work with will leave the judge with a negative impression and lawyers want judges to see questionnaires as expediting the process rather than slowing it down. Don t make the questionnaire too long. The length of a questionnaire should be proportionate to the amount of time a lawyer has to read them. There s no point in having a 20-page questionnaire if the lawyer only has 30 minutes to look over 40 of them. If an attorney spends voir dire re-asking questions jurors have already answered in the questionnaire, panel members become annoyed. Do ask some open-ended questions. Close-ended questions are good for getting a lot of information quickly. However, always include a few open-ended questions in questionnaires because they allow the panel members to express themselves in their own words. This may help a lawyer notice that some jurors latch onto a particular aspect of the case, for example, or that others have especially strong feelings (because they ve used capital letters or used exclamation points). Do leave enough space for the jurors to answer. Another thing that will irritate panel members is asking a question and then providing only half a line for the answer. People typically will fill in however much space they re given. So, lawyers who provide one line for an answer to an open-ended question get much less information than those who provide four lines. Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 111

Hardship Last Don t let the answer space fall on a separate page from the question. This may sound trivial, but bad page breaks cause problems in jury questionnaires. A question left alone at the bottom of a page often gets overlooked. Every question asked is significant, so do everything possible to make sure jurors answer them all. Do ask an adjective question. Include an adjective question on every questionnaire. It asks jurors to describe themselves by checking adjectives on a list. Provide a wide range of adjectives, from general to case-specific. Here are some suggestions: analytical, careful, compassionate, detail-oriented, emotional, frugal, generous, impulsive, judgmental, old-fashioned, open-minded, skeptical and visual. The selections the panel members make gives an idea not only of how they may view a case but also how they will process the evidence presented. Don t allow any typographical or grammatical errors. Always have at least one other person proofread the questionnaire. There inevitably will be a detailoriented panel member who corrects mistakes. Even if you aren t the party who typed the questionnaire, don t run the risk that jurors will associate the error with you. Do save the hardship question until the end. If a lawyer begins a questionnaire with the hardship question, jurors who think they will be let off often do not take the rest of the questionnaire seriously. You don t want panel members thinking about being excused before they fill out their questionnaires effectively. Do end with a question that lets jurors say anything that s on their minds. Always end questionnaires with an open-ended question that lets the panel members vent something as simple as the word comments with blank lines after it. Although half of the panel may write nothing significant here, the ones who do answer are revealing something specific about how they feel. Whether their answers are about an issue in the case, the jury system as a whole or whatever, view them as a red flag to follow up on in voir dire. 112 Construction Law Seminar September 2012

VI. Effective Witness Prep When the Witness is a Lawyer Effective Witness Prep When the Witness is a Lawyer Having worked with hundreds of witnesses over the years, it is perfectly clear that the most difficult witnesses are experts and lawyers. Experts because they have formed bad habits that are difficult to break and lawyers because they think they know it all. We want to share with you our ideas on how to effectively prepare an attorney to testify at a deposition or trial. In addition to our thoughts, we have posed this question to four of the best lawyers in America for their take on this thorny issue. DEPOSITION PREPARATION More cases have been lost at deposition than have ever been lost at trial. This occurs because the time has not been spend adequately preparing the witness. There are two components to effective witness preparation - substantively preparing the witness and then the delivery of the information. When either of these two essential elements are missing, you have the potential for a disaster on your hands. This is especially true if the witness is a lawyer because jurors hold attorney witnesses to a standard that is even higher than that of an expert witness. To reach this heightened expectation, the witness must have a solid grasp of the information and the documents. Once the lawyer witness is up to speed on the facts and documents then the witness is ready to be prepared on delivery. nd Witness Prep for Lawyer Witness 2 Draft 11/9/11 Page 1 of 15 Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 113

The old school advise has been, Answer the question just Yes or No if you can. This is not what we consider to be effective or sage advise. Rather, what we suggest is that the witness listen to the entire question and answer only the question asked. Sometimes the answer will only require a word, sometimes a sentence, occasionally a question requires a paragraph answer and rarely the question compels an page or more answer. The goal is to answer the question without providing bait for other questions. We are not trying to persuade at the deposition but rather simply provide a concise answer to the question asked. This is a particularly daunting task when the witness is a lawyer since most lawyers are not good listeners. If you don t believe us, just ask your spouse or significant other if you are a good listener! Training the lawyer witness to be listening to the question instead of thinking of their answer takes practice. The most effective technique for training the witness to listen to the question is to video tape the practice session and then let the witness see for themselves that their answer was not responsive to the question asked. The tape, which is made pursuant to and protected from disclosure by the attorney-client and work product privileges, is a remarkable teaching tool. The next problem with the delivery of the attorney witness deposition testimony is the language barrier that often occurs. We refer to this as talking shop. When accountants or mechanics or physicians get together, they talk in a language that they nd Witness Prep for Lawyer Witness 2 Draft 11/9/11 Page 2 of 15 114 Construction Law Seminar September 2012

are comfortable in and familiar with. Lawyers are no different. Therefore, you have to teach the lawyer witness not to use words or terms of art that other lawyers and judges will understand but will not be completely understood by the jurors. Language is the greatest impediment to effective communication. We have to remind the lawyer witness that they are looking at and answering the questioner but they are talking to the jury. Therefore, what they say and how they say it matters. If the jurors do not understand what the lawyer witness is saying, the jurors will not listen to the witness. If the jurors do not listen to the witness, the jurors will not believe the witness. If the juror does not believe the lawyer witness, the jury will find against the witness in their verdict. The terrible chain events begins because they could not understand the witness. Therefore, follow this rule - if the person working the counter at the nearest McDonalds would not understand what the lawyer witness is saying, the jury probably will not understand either. To solve this problem, you need to train the witness to explain the terms of art or use examples or analogies to illustrate the point. The next issue to consider is how the lawyer witness comes off. Is the witness likeable, which jurors equate to believable or is the witness condescending, arrogant and argumentative which jurors equate to deceptive. If we start from the premise that jurors hold the lawyer witness to a higher standard, if the witness comes across as condescending or worse yet gets into a verbal fist fight with the questioner, this will likely nd Witness Prep for Lawyer Witness 2 Draft 11/9/11 Page 3 of 15 Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 115

result in a disastrous outcome. This problem is exacerbated if the witness comes across as charming in front of the jury and then on cross examination the witness is impeached with the deposition demeanor and testimony. Many lawyers that hire us for the first time have us work with difficult witnesses after their deposition has been given. Lawyer that have worked with us for a long time will hire us before the deposition to help a witness appreciate the difference between holding their ground and lashing out. TRIAL PREPARATION Trial preparation differs from deposition preparation in one critical category - now the witness should be prepared to persuade. The key features to preparing the attorney witness are threefold: 1. Your testimony and delivery needs to be consistent between direct and cross examination. 2. The witness needs to know when to look at the jury when answering a question; and 3. The witness needs to be loaded with a handful of safe harbor answers in case the witness ever feels trapped or cornered on cross examination. Lets briefly examine each of these elements of trial testimony. nd Witness Prep for Lawyer Witness 2 Draft 11/9/11 Page 4 of 15 116 Construction Law Seminar September 2012

Consistency When a witness is consistent in their demeanor and delivery in both direct and cross examination, jurors perceive the witness as being prepared, likeable and believable. On the other hand, when I witness acts and answers one way on direct examination and then acts and answers completely different on cross examination, jurors perceive that witness as being coached, unprepared and not believable. This consistency is crucial with the lawyer witness. Jurors perceptions about the courtroom are typically formed by what they have heard and read. Unless a juror has prior jury service or other experience with the justice system, they walk into the courtroom with preconceived notions that are oftentimes incorrect. One erroneous preconceived notion relates to the witness who is an attorney - the witness will be thoroughly acquainted with all the facts in the case, the witness will be eloquent and likeable. Nothing could be farther from the truth with most attorney witnesses. Because of this extra baggage that the lawyer witness carries, it is crucial that the actions and answers of the witness on direct and cross examination are consistent. For example, if the lawyer witness does not pause or hesitate when answering questions on direct examination but on cross examination the witness hesitates before answering important questions, the jury will not have a favorable reaction to the witness. If direct examination looks like the lawyer and witness are doing the Tango and the cross examination looks like a street fight, the jury will not have a favorable reaction to the witness. If the witness talks slow and soft on nd Witness Prep for Lawyer Witness 2 Draft 11/9/11 Page 5 of 15 Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 117

direct examination but on cross examination the attorney witness comes across as loud and fast, the jury will not have a favorable reaction to the witness. Consistency is the first building block for effective communication. Eye Contact with the Jury The next issue is the process by which the witness bonds or ignores the jury. Again, there needs to be consistency. We firmly believe that the attorney witness must have some eye contact with the jury while testifying. The question becomes how much eye contact should the witness have with the jury? Too much eye contact and the jury may conclude the witness has been coached to look at the jury. If there is no eye contact, a bond will never be formed. We suggest that on direct examination, the witness should only look at the jury when the question he is being asked starts with, Tell us.... We insist on the words Tell us so that the lawyer asking the questions and the jurors are seen as part of the same team. The Tell us should be used only when the question and answer are important for the jury to remember. Jurors will have an easier time remembering an important response if the lawyer witness looks at the jurors while answering. This begs the question, what should the lawyer witness do on cross examination? The answer is easier said then done. Remembering the rule of consistency, the witness nd Witness Prep for Lawyer Witness 2 Draft 11/9/11 Page 6 of 15 118 Construction Law Seminar September 2012

should only look at the jury when giving an important answer. While witnesses, especially lawyer witnesses seem to think that ALL of their answers are important, the truth is that the less often the witness looks at the jury, the more likely the jury will remember the answer when the witness does look at them. We tend to use sports analogies to drive this point home. In 2001, Barry Bonds hit 73 home runs and this was the greatest home run production Major League Baseball history. That same historic season, Bonds had 664 plate appearances and he saw an average of 5 pitches per plate appearance. That means that Bonds saw over 3300 pitches and he ONLY hit 73 out of the park. The point is that the witness should only look at the jury on cross examination when the witness is going to hit one out of the park. Realistically, this will only occur once every 10 or 15 minutes. This consistent eye contact can make the difference between winning and losing a close case. Safe Harbor Answers Finally, all witnesses, but especially lawyer witnesses need to be locked and loaded with a handful of safe harbor answers should they ever feel trapped or cornered on cross examination. The safe harbor answer will turn a defeat into a victory. These answers are either related to the theme of your case or a mantra that we want to reinforce. If the lawyer witness can maintain their aplomb and respond appropriately during a scathing cross, this is the key to winning tough cases. nd Witness Prep for Lawyer Witness 2 Draft 11/9/11 Page 7 of 15 Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 119

Famous Trial Lawyers Weigh in on this Issue. We have asked four of the best trial lawyers in America, Mark Lanier (ML), Steven Susman (SS), Dick DeGuerin (DD) and Abbe Lowell (AL) to weigh in on a number of questions regarding the preparation for deposition or trial testimony when the witness is an attorney. Below are the questions we asked and their answers. Question - Regarding deposition or trial, is witness preparation different when the witness or client is an attorney and if so, how is it different? ML - Absolutely! One of the biggest problems with lawyers is they think they know too much! That knowledge will make them come off as an advocate instead of a fact witness. The advocate is a salesman; the fact witness is a neutral. An advocate does not do well with a jury. All of the cynicism against lawyers affects the credibility. SS - No. DD - AL - Witness preparation is very different when a client is an attorney (even though witness questioning at the actual trial or deposition may not be). The reason is pretty obvious -- attorneys as witnesses (and especially as clients) need, first, to be deprogrammed from being their own attorney in answering questions and the, need to learn how to answer questions as a "real" person9 (with feelings when appropriate, analysis only rarely, etc.). This is what an attorney witness does nd Witness Prep for Lawyer Witness 2 Draft 11/9/11 Page 8 of 15 120 Construction Law Seminar September 2012

than a non-attorney does not do as often or as much: Questioner asks a question; attorney witness thinks to herself not what is the answer, but where is this questioner going with the question. This may make for a poor answer the question actually asked and getting ahead of the questioner on the next inquiry. So, keeping an attorney witness "in the moment" and "in the actual question" and having him or her trust that you, as the attorney, will worry about the next one is key. Preparation, then, has to find ways to correct this tendency. One can do it especially well with videotaping an attorney witness who can then readily see what he or she does wrong. Our View - Question - From your experience, when the witness is an attorney, what do they do well and what do they do poorly in their deposition or trial testimony? ML - Lawyers do well at understanding the core issues behind the deposition. They can generally recognize many of the traps. These blessings are also curses, however. Because they make the lawyer predisposed to second guessing the opposing counsel in the deposi/trial. The lawyer tries to outsmart the other lawyer. The lawyer also has a tendency to be both lawyer and witness. All of these are dangerous. They get the lawyer "too close" to the situation and perspective is endangered. SS - Attorneys are able to grasp the issues and substance. What the attorney witness does poorly is that they volunteer too much, they have a hard time keeping thie answer to Yes or No and they appear arrogant nd Witness Prep for Lawyer Witness 2 Draft 11/9/11 Page 9 of 15 Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 121

DD - AL - What attorney witnesses do well is to grasp the issue and not be distracted by the questioner's background noise, premises that are not true, compound questions, etc. What attorney witnesses are especially good at is not to get trapped with assumptions in a question ("When did you stop beating your spouse"). They are also good at helping their attorneys separate the wheat from the chaff in preparation material more so than non-attorneys who are not trained or experienced to do that, What attorney witnesses do not do well is contained in 1) and 2) above. The over-analyze, they answer as lawyers and not as people, they think too far ahead and that often leads to them volunteering too much. Where as one can prepare a non-attorney witness to answer a question with a simple "NO," usually a safe answer, an attorney witness might want to explain even the "NO's." Our View - Question - Do you do more, less or the same amount of preparation when the witness is an attorney? ML - I typically spend more time in prep with a lawyer. You need to not only go over all the facts, documents, areas of discovery, etc., but you also need to have a heart to heart about their conduct in the deposition or trial. The lawyer needs to learn how to not be a lawyer and be a human. We do a lot more practice before the real thing with lawyers. SS - Less because the attorney picks up on the right answer more quickly. DD - nd Witness Prep for Lawyer Witness 2 Draft 11/9/11 Page 10 of 15 122 Construction Law Seminar September 2012

AL - Mostly it works out to be the same. What a non-attorney needs in preparation (e.g., learning to answer in shorter sentences, not volunteering, no guessing, etc.) has the equivalent with attorney witnesses. One group's strengths may be the other's weaknesses and vice versa. So, it takes about the same time, patience and hard work. Our View - Question - How does jury prejudice against lawyers play into your preparation? ML - Jury prejudice plays a large part. Juries think lawyers are fact manipulators. They think lawyers are greedy. They do not trust lawyers. We have to combat that. To do so, we take nothing for granted. We dress the lawyer conservatively so they do not stand out in appearance. We practice to get the lawyer used to being a witness rather than a lawyer. We have ways of reacting if the lawyer is crossing the line in behavior.it is almost like the army does basic training. We tear down the lawyer's pre-learned testimony habits and roles, and rebuild it as a witness rather than a lawyer. SS - You really have to think about how to make the lawyer lovable. DD - AL - Juries will hold "knowing better" "knowing more" "acting better" more against an attorney witness than a non-attorney AND juries will assume attorney witnesses are more evasive and less honest because of the generally held opinion of attorneys. Defenses and excuses and explanations that a non-attorney could say and be believed (e.g., I did not know it was wrong), an attorney nd Witness Prep for Lawyer Witness 2 Draft 11/9/11 Page 11 of 15 Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 123

witness will not get away with. Our View - Question - Can you think of any examples that illustrates how good or bad a witness a lawyer can be? ML - Two: One lawyer was a thinker... Always pausing and looking like he was going to catch the questioner in a trap... The jury hated him. A second was truly human. Just the facts. Acted like anyone else. Showed a little nervousness and admitted to it. Talked to the jury rather than the lawyers. Tried to be honest and direct. Gave up points that were properly given up, but was sturdy where he needed to be. The jury went with him 100 percent. SS - I can t recall one in my cases but the famous one comes from Joe Jamail s cross of Marty Lipton in the Penzoil case. DD - AL - Our View - Question - Does the jury prejudice against lawyers affect the questions you ask the witness or client who is an attorney? ML - Yes. I will ask a lawyer if he has ever been on that side of the witness box. I will ask a lawyer if it is a bit disconcerting. If the lawyer says something that doesn't make sense or seems nd Witness Prep for Lawyer Witness 2 Draft 11/9/11 Page 12 of 15 124 Construction Law Seminar September 2012

an apparent contradiction, I will ask him, "Well now you're a lawyer, what you are saying seems contradictory... Explain to me and the jury why its not!" The jury always remembers the witness is a lawyer. So I don't try to hide it. I just try to make it something everyone is comfortable with. SS - Not really DD - AL - Not so much as that, but a question ought to take that prejudice on. "So, Mr. Attorney, recognizing that you are a trusts attorney and not a.... " or "So. Ms. Attorney, realizing that you are here as a witness likes any other person..." Our View - Question - What are your 5 best tips for witness prep (in general). Do you add special instructions for lawyers? ML - Tip 1 - Keep your answers short and to the point. Best answers are "Yes," "No," I don't remember," and "I don't know." Tip 2 - Tell the truth. nd Witness Prep for Lawyer Witness 2 Draft 11/9/11 Page 13 of 15 Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 125

Tip 3 - Work through all the facts. Tip 4 - Ask the witness what is their biggest worry. Tip 5 - Practice the cross AND THE DIRECT! SS - Tip 1 - If the question can be answered yes or no, do so. Do not volunteer something not asked Tip 2 - Give the appearance of being helpful, candid knowledgeable and likeable Tip 3 - Be prepared by having reviewed all documents that you wrote or received any your prior testimony Tip 4 - Be sure you have studied and concurred with the hardest questions and best answers that your lawyers and you have worked on together Tip 5 - be enthusiast that you are finally getting the chance to tell your story DD - AL - Tip 1 - Ask yourself the question that was asked you in your mind's voice BEFORE starting to answer it (it gives you that second and makes sure you are asking what is asked) Tip 2 - When an adversary's question can be answered with a NO, it almost always does not need an explanation; when it has to be answered with a YES, it almost always does. Tip 3 - Answer the question asked, even it is wrong, stupid, off the mark and do not try to amend it or make it better even if you know what it was the questioner was trying to ask. nd Witness Prep for Lawyer Witness 2 Draft 11/9/11 Page 14 of 15 126 Construction Law Seminar September 2012

Tip 4 - Do not speculate to be helpful and if pressed to do so, make clear you are guessing because you were asked to do so. Tip 5 - Do not become educated about documents/facts you did not know at the time of the matter being questioned 1. Our View - Tip 1 - Video tape the mock examination and review it with the lawyer witness Tip 2 - In preparing for a Deposition or trial testimony, never let the lead lawyer cross examine the lawyer witness Tip 3 - Do not let the lawyer witness use legalese, talk like a normal person Tip 4 - At trial, demeanor, conduct, tone and delivery have to be consistent from direct to cross Tip 5 - Question - any other comments? DD - nd Witness Prep for Lawyer Witness 2 Draft 11/9/11 Page 15 of 15 Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 127

VII. PERSUASION - Arming your Friends, Convincing your Enemies PERSUASION - Arming your Friends, Convincing your enemies Lisa Blue, J.D., Ph.D. & Robert Hirschhorn, J.D. Persuasion is defined as the act of inducing someone to do something through reasoning or argument. Too often lawyers confuse advocacy with persuasion. Advocacy is the art of presenting your position in the best possible light. Persuasion on the other hand is convincing the listener that you are right. We want to share several tips for increasing your persuasive ability in the conference room, board room and the court room. If you read the next paragraph, then you have received the first tool of persuasion - pique the interest of the audience. 1. Make a good first impression The first impression you make on your audience is often the strongest and longest lasting, Studies have shown that if your initial impression is negative, it takes eight separate and distinct good impressions to get back to even. Therefore you want to be prompt, polite and professional. People place a great value on their time and the do not want to feel like their time is being wasted or they are being ignored. Remember what you were feeling the last time you were on an airplane and wondering why it was 30 minutes past departure time and the plane hasn t even left the gate yet and the pilot has never given you any explanation. That is exactly the same feeling that potential clients have when they are left waiting for you. W hen a jury panel is left out in the hallway with no explanation as to the reason for the delay, you have an angry and disgruntled panel when jury selection finally begins. To eliminate this problem, always start on time. Better yet, start 5 minutes early if you can. Being polite and professional is an essential building block towards building trust and confidence. People will pay close attention to how you treat them and even closer attention to how you treat others. In your office, you want to treat your office personnel with the same dignity and respect as you treat your potential client. If the potential client or witness has other people with them, pay attention to them as well since they were brought for as reason. 128 Construction Law Seminar September 2012

2. Know your audience Different arguments appeal to different people. If your audience has a cerebral orientation, rarely will an emotional argument, even a compelling one, be persuasive. Conversely, if the audience is viscerally oriented, a well reasoned, organized and logical argument will not be compelling to them. Thus, you need to match your message to the messenger. To determine which category an individual falls into, you simply need ask a question that starts with, What are your opinions or feelings about... and listen to the words that person uses. Visceral people will use emotional words - I feel, I m worried or I m scared. Cerebral people will use thinking words - My opinion, I think or I believe. This principle is equally applicable in jury selection. The problem is, how do you make this determination in a short period of time with a large group of people? There are two opportunities to gather this information - a juror questionnaire and voir dire. W e believe that the factors that contribute to whether a person is cerebral or visceral are their occupation, education, culture, upbringing and philosophy. At the very least, the juror information cards used throughout the State of Texas contains the education and occupation of the jurors. To supplement this information, you should prepare a supplemental questionnaire that includes an open-ended question that begins, W hat are your opinions or feelings about (awarding money for mental anguish, large corporations, people who bring personal injury lawsuits, fathers who want custody of their kids, etc). In jury selection in most cases, you will not have sufficient time to ask each juror an open ended question. Therefore, you will want to ask a closed ended question and ask each juror to answer it. For example, you might want to ask one of the following questions: 1. Some people see the big picture and other people dwell on the details, which type of person are you? (Big picture jurors tend to be visceral jurors while dwell on the detail jurors are more often cerebral jurors); 2. Do you tend to be more emotional or logical? 3. W hat would be more important to you in deciding to buy a house - you love the house or it is a good investment? 4. Are you a black and white or a black, white and shades of grey person? Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 129

3. Be an expert in the field W e analogize persuasion to sales. In sales, your audience falls into lookers and buyers. Buyers are the potential clients that have been referred to you by someone they trust. Lookers are the potential clients that are shopping for a lawyer. Buyers are the jurors who identify with your case or your client. Lookers are the jurors who can go either way. In both of these scenarios, it is much easier to persuade the buyer. To persuade a looker, you need to make the audience feel like you are an expert. Your audience will want to know that they can trust and count on what you tell them. If you were buying a car or television and you had a technical question and the salesperson said that they will check on that and get back to you, that lack of expertise creates a huge barrier. The three critical components to persuasion are: 1. Ability to communicate your position; 2. Belief that you know what you are talking about; and, 3. Concluding that you are right. 4. Lower Expectations There is a direct correlation between expectations and persuasion. If the expectation held by the audience is set too high and you do not meet it, you are doomed to fail. On the other hand, if you lower what is expected of you and you meet or exceed those expectations, you will accomplish your goal. Tell your audience what you will do (in the case of the client) or what you will prove (in the case of a trial). Do not make a promise that you can not meet or keep. Persuasion occurs in baby steps, not giant leaps. It is a gradual process where the audience likes you, believes you, trusts you and ultimately, agrees with you. 130 Construction Law Seminar September 2012

5. Tell an interesting and compelling story Storytelling captures the interest and attention of your audience. Sometimes it is the story that is compelling, sometimes it is the storyteller that is compelling and the ultimate form of persuasion occurs when both are present. How you convey your story is just as important as the story itself. As we talked about earlier, you must keep in mind whether the leaders in your audience are logical or emotional. You must also consider how your audience learns and retains information. The vast majority of people learn with their eyes, not their ears. (In jury selection, you will want to find out if the jurors prefer to get the news from the radio, television or newspaper). Therefore, a critical part of persuasion is using demonstrative aides. Powerful words and powerful images move people. Think of those imagines in our lifetime - the twin towers falling, the Challenger explosion, the OJ Simpson slow speed chase, a man walking on the moon. You want to find that tipping point moment with your potential client or case and capture it. W e were involved in a case involving a water purification plant that caught on fire. Our position was that the purification system was defectively designed. The defense took the position that our faulty maintenance caused the fire. Our focus group research showed that this was a compelling argument. We also knew from our experience that jurors always want to know in defective product cases if this had ever happened before. Armed with this knowledge, Mark Sales, a great trial lawyer from Dallas told the jury that every time the defendant said the word maintenance, we want you to think about the fires that occurred at other plants. Mark then showed the jurors a picture of the fire. It was a powerful imagine and the tipping point in that case. Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 131

VIII. Using a Questionnaire to Pick a Winning Jury USING A QUESTIONNAIRE TO PICK A WINNING JURY! Written by Lisa Blue and Robert B. Hirschhorn, edited by Alexandra Figari Two pivotal events have had a profound impact on jury selection in Texas - time 1 limits for conducting voir dire, and the general prohibition of case specific commitment 2 questions. One critical tool that allows lawyers to obtain the information that is needed for jury trial, despite this new jury selection landscape, is what has come to be known as a juror questionnaire. Virtually every county in Texas uses a standard juror information 3 card, which is given to the attorneys and provides a helpful, albeit basic, glance at every member on the jury panel. While this data provides lawyers with a little bit of information on who each juror is, the standard juror card fails to tell you what each juror is all about, pinpointing the very reason that a juror questionnaire has evolved into such a valuable resource for all attorneys involved in litigation. Consider the dynamics that now make up this new jury selection landscape. First we have our trial lawyers, who most likely feel very comfortable in the courtroom. In fact there are some lawyers who wouldn t hesitate to say that they would rather be in the courtroom than just about anywhere else. On the other hand we have the potential 1 The earliest reported cases on time limits for voir dire in a criminal case were DeLaRosa v. State, 414 S.W.2d 668(Tex. Crim App, 1967) [20 minutes was unreasonable]; Barrett v. State, 516 S.W. 181(Tex. Crim App, 1974) [30 minutes was reasonable]. The test for determining the reasonableness of the time limits where set forth in Ratliff v. State, 690 S.W. 2d 597 (Tex. Crim App, 1985). On the civil side, the earliest reported case is McCoy v. W al-mart Stores, 59 SW 3d 793 (Tex App - Texarkana 2001) [30 minute limitation on voir dire in this personal injury case was not an abuse of discretion] 2 Standefer v. State, 59 SW 3d 177 (Tex. Crim. App. 2001) [Commitment questions based on the facts of the case are improper in criminal cases]; Hyundai Motor Co. v. Vasquez, 189 SW 3d 743 (Tex. 2006) [Commitment questions on the facts of the case are improper in civil cases] 3 To obtain a copy of the standard juror information card from Harris County, go to www.hcdistrictclerk.com/common/juror/pdf/officialjurysummons.pdf. Texas.Lawyer.FinalDraft.April.2012 Page 1 of 11 132 Construction Law Seminar September 2012

jurors, the majority of whom would prefer to be just about anywhere else EXCEPT the courtroom. Many jurors are both intimidated of the courthouse and fearful of the prospect of having to talk in a public setting, causing the courtroom to quickly become a place of dread. You may be surprised to learn that the number one fear in America is not the fear of death, snakes, or taxes. Nor is it the dreaded drunk text message, or accidentally hitting Reply All when sending a private e-mail. No, the Number 1 fear in America is the fear of speaking in public. Unless the judge is willing to conduct voir dire in a sequestered fashion such as in the jury room or the judge s chambers, this stifling fear will still persist no matter what calming or reassuring words you try. Some jurors are able to rise above this fear and express their views, but for the majority of jurors, this fear is virtually paralyzing and their one hope is to stay silent. Most jurors are much more comfortable (and usually very relieved) to have the option of writing down their views, rather than having to raise their hands and express their views aloud. In addition to jurors being much more willing to answer a question if they have the option of writing it down, jurors often view written answers as an opportunity to demonstrate a refreshing amount 4 of honesty and candor. Why have juror questionnaires proven to be so valuable? Because you will always learn more about a juror from a 1 page questionnaire then you will learn during an hour of voir dire. All questionnaires are not created equal, and we would like to address three fundamental attributes for an effective questionnaire - it must be fair, short, and efficient. If you want opposing counsel to agree to your proposed questionnaire, it has to contain fair and relevant questions for both sides. When you are in the process of writing questions for the questionnaire, spend time thinking about the case from opposing This is why it is critically important to have at least one open ended question in every questionnaire. Such an open ended question would typically start with, What are your opinions or feelings about... Texas.Lawyer.FinalDraft.April.2012 Page 2 of 11 Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 133

counsel s perspective and include the questions that you believe the other side would want to have answered. If you have difficulty coming up with questions for the opposing side, then we recommend that you leave a few blank spaces on the questionnaire and allow opposing counsel to add in their questions. In addition to being fair, the questions must be relevant and helpful for hardship, cause, and peremptory strike purposes. The questionnaire must also be short if you want the judge to agree to use it. Some judges fully embrace and accept the use of a questionnaire, even a long questionnaire, but these judges are usually few and far between. On the other hand, a few judges absolutely refuse to ever use a questionnaire, even if the parties submit an agreed to questionnaire, but we are happy to report that this attitude is rapidly diminishing. What you will find is that there are a large number of judges who will allow an agreed to questionnaire provided that the instrument is short, does not require any additional work or cost on the part of court personnel, and, most importantly, will not result in unnecessarily delaying or prolonging voir dire. In the vast majority of our cases where a questionnaire has been employed, the questionnaire was a one page document, which had been agreed to by both sides. Included with this article is a copy of a one page 5 questionnaire that was recently used in a personal injury case, as well as a one page questionnaire that the Dallas chapter of ABOTA has approved for and used in numerous 6 civil cases tried in Dallas. Efficiency is the third component for an effective questionnaire, which means that there must not be any wasted space on the document. Our questionnaires typically contain 15-18 questions on a single page, and since space is limited, it is important to remember that every question counts. Efficiency also means that you must think through 5 6 Attached as Appendix 1 is a 1 page personal injury questionnaire. Attached as Appendix 2 is the Dallas ABOTA approved questionnaire, Texas.Lawyer.FinalDraft.April.2012 Page 3 of 11 134 Construction Law Seminar September 2012

how the questionnaire will be filled out and copied in a way that will not require excessive time or money. When proposing the use of a juror questionnaire, it is your 7 responsibility to find out if the court has clip boards and if they do not, then you should 8 arrive prepared to provide both clip boards and pens to the panel. Finally, efficiency demands that you be responsible for making the copies of the completed questionnaires. Unless your office is across the street from the courthouse, you need to make arrangements for someone to take the questionnaires to the closest Kinko s or similar copy center and have the necessary copies made. We recommend that a member of each team be present during the copying and that an equal number of copies be made for each side. If there is not a copy center nearby, you must be prepared to either make the copies at the law library, or have the clerk s office make the necessary copies and you split the cost with opposing counsel. Another option is to prepare the questionnaire 9 on triplicate carbonless paper with a cardboard backing. The most consistent complaint that judges have with a questionnaire is that the process of filling out and copying the questionnaires consumes too much time. 10 With a one page questionnaire, it takes prospective jurors 15 minutes or less to fill it out, and the use of triplicate carbonless paper eliminates the need for copies. The most efficient use of a questionnaire takes place when hardship challenges are heard and ruled on BEFORE the voir dire commences. By taking up hardships before voir dire, the judge has a better idea how many eligible jurors remain on the panel and 7 If there is not a hard writing surface, it will be very difficult to read the answers. 8 Since the questionnaires are going to be copied, you always want it filled out in black or blue ink. Pencil and red ink does not copy well. 9 The purpose of the cardboard backing is to provide the jurors a hard surface for filling out their questionnaire. Thus, the need for a clipboard is eliminated. 10 Time is spent filling out the questionnaire, copying the instrument and then giving the lawyers a reasonable amount of time to review the completed questionnaires. Texas.Lawyer.FinalDraft.April.2012 Page 4 of 11 Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 135

the lawyers do not risk wasting time by talking to jurors who will end up only later being excused for valid hardships. We are often asked what types of questions should the questionnaire contain. The answer is those questions that are designed to identify the life experiences and value system associated with each juror. While it is true that jurors base their verdicts on both the evidence and the law, it is ultimately their life experiences and value system that shape how they perceive the testimony and evidence, as well as how they decide to apply the law. Appreciating and recognizing that this is how individuals make decisions, the most important questions to ask are those that tap into both of these critical areas. Questions pertaining to life experiences are widely accepted by lawyers and judges alike. These are the typical inquiries pertaining to education, employment, and experiences that directly relate to the issues in the case. In a breach of contract case, the life experience questions would include: 1. Any education, experience or training in writing, reviewing or negotiating contracts?; 2. Ever had a bad experience with a contract?; 3. Ever work for or done business with a party to this case?; and, 4. Ever owned stock in the plaintiff or defendant corporations? A good trial lawyer knows to ask these questions in a questionnaire, but a very good trial lawyer understands that the questionnaire must contain value system questions as well. The following is an example of a value system question: What do you think is more important, the words in a contract or the spirit of the contract? A great trial lawyer knows that jurors make decisions based on their core values, and therefore wants to capture a snap shot of each juror s core values and beliefs. In order to do so, the lawyer would include one or two of the following questions on the questionnaire: 1. What three words or adjectives would you use to describe yourself?; 2. What three words or adjectives would your best friend use to describe you?; 3. Name three people you admire most and 3 people you admire least?; 4. Are you the type of person that prefers to see the big picture or dwelling on the details; or, 5. In most situations, are you a leader, follower or team player? It does not matter 136 Construction Law Seminar September 2012 Texas.Lawyer.FinalDraft.April.2012 Page 5 of 11

what type of case you are trying or what side of the litigation you are on, as long as jurors are deciding your case, you are well advised to put a couple of these questions on your questionnaire. The final issue is a critical one - how do you process or synthesize the information you have gleaned from the questionnaire? The longer you have to review the completed questionnaires, the more information you can extract. One of the leading counties in Texas for use of juror questionnaires is Tarrant County, where many of the judges routinely use questionnaires in both civil and criminal cases. What makes Tarrant County so questionnaire-friendly is the fact that many times the jury panel is called into court the Friday before trial, which is when hardship excuses are both heard and ruled on. After hardships have been ruled on, the remaining jurors complete the juror questionnaires and are then dismissed and told to return Monday morning for voir dire examination. This process gives the lawyers all weekend to review the completed questionnaires, therefore allowing them time to prepare both meaningful and appropriate follow up questions for individual jurors. Another advantage of having the weekend with the completed questionnaires is that it provides the attorneys with an opportunity to reach an agreement on those jurors they want to excuse for cause. Furthermore, the extra time allows the attorneys to identify any members of the panel who should be questioned at the bench in order to avoid potentially embarrassing them, or in order to avoid possibly tainting the panel. The final benefit of the Tarrant County method is the fact that a fair number of cases have settled as a result of the parties having the weekend to process the information because it allows both sides time to assess the likelihood of prevailing in front of the said panel. Unfortunately the Tarrant County method is not yet the standard in Texas. The most typical pattern we have seen utilized is when the jurors fill out the questionnaire, and then voir dire begins anywhere from 30 minutes to 2 hours later. This approach leaves Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 137 Texas.Lawyer.FinalDraft.April.2012 Page 6 of 11

counsel with very little time to review and capture the critical information contained in the questionnaire. To accomplish this daunting task, we recommend that the lawyer only focus on 2 or 3 key questions in each questionnaire. After reviewing those key questions, if there is any remaining time, the lawyer should go back and quickly review each questionnaire to see if there are any specific follow up questions that would be helpful to pose for a particular juror. This is not a task that the lawyer can delegate to a trial partner, associate, or staff member because it is important that the lawyer who will be interacting with the jury have a general familiarity with each of the jurors. If you have a jury consultant helping with jury selection, then both the lawyer and the consultant should each have a copy of the completed questionnaires. It is the lawyer s job to get a feel for each juror, while it is the consultant s job to know each juror. Thanks to both this tandem approach and the valuable juror questionnaire, the lawyer will know the right questions to ask the jurors, the right jurors to exercise cause and peremptory strikes on, and finally, the right jurors to hear and decide their case. 138 Construction Law Seminar September 2012 Texas.Lawyer.FinalDraft.April.2012 Page 7 of 11

APPENDIX #1-1 Page Questionnaire (Personal Injury) TO PROSPECTIVE JURORS This questionnaire is designed to obtain information from you with respect to your qualifications to sit as a juror in this case. By the use of the questionnaire, the process of jury selection will be shortened. Please answer the questions as completely as possible. The information contained within the questionnaire will become part of the Court's permanent record, but it will not be distributed to anyone except the attorneys in the case and the judge. During the questioning by the Court or the attorneys, you will be given an opportunity to explain or expand any answers, if necessary. If for any reason you do not want to answer any of the questions asked, please write the word 'PRIVATE' next to the question and we will take this matter up with you in private. This questionnaire is part of the jury selection process. The questions must be answered by you under penalty of perjury and you should fill out this questionnaire by yourself without consulting any other person. Please use the back of the questionnaire should you wish to m ake further comments regarding any of your answers, and please remember to indicate the corresponding question number. If you do not understand a question, please write "I DO NOT UNDERSTAND" and the question will be explained to you in Court. PLEASE REALIZE THERE ARE NO RIGHT OR WRONG ANSWERS -- JUST HONEST ONES. Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 139 Texas.Lawyer.FinalDraft.April.2012 Page 8 of 11

The information given in this questionnaire is confidential and will only be used to assist with jury selection. YOUR NAME: AGE JUROR # 1. What jobs have you held in the past? 2. Circle any of the following in which you have received training, experience or education: 3. Have you or any family member ever worked as a commercial truck driver? YES NO If YES, What jobs has your spouse held in the past? Accounting Law Insurance Medicine Who? What company? Was it long haul or short haul? 4. Have you or any family member ever worked for, done business with Delta Sanitation? YES NO If YES, please explain: 5. How many automobile accidents have you had in the past 15 years? How many of those accidents were your fault? 6. Have you or any family member ever been seriously injured in an automobile accident? YES NO If YES, please explain: 7. If supported by the evidence, could you award money damages for: Lost Wages YES NO Pain and Suffering YES NO Medical Bills YES NO If any of your answers are NO, please explain: 10. Have you ever been the Plaintiff (the party suing) or the Defendant (the party being sued) in a lawsuit? YES NO If YES, please explain: 13. What do you enjoy doing in your spare time? Was anyone serious hurt or killed in any of the accidents? YES NO 8. The main issue the jury will decide in this case is the amount of damages to be awarded to the plaintiff. On a scale of 1-5 how comfortable or uncomfortable would you feel in listening to the evidence, applying the law and deciding what amount of money to award. (Please circle only one number) 1 2 3 4 5 Very uncom fortable Very com fortable 11. What three (3) words or adjectives would you use to describe yourself: 14. What internet or social networking web sites do you visit most often? 9. Have you ever served as a juror in a civil case? YES NO If YES: What type of civil case was it? What was the verdict in the case? Were you the foreperson? YES NO 12. List 3 people you most admire: 1. 2. 3. List 3 people you least admire: 1. 2. 3. 15. Is there any reason why you could not be a fair juror in this personal injury lawsuit? YES NO If YES, please explain: Who makes the financial decisions in your home? I hereby swear or affirm that all of my answers in this questionnaire are true and correct to the best of my ability. Juror s Signature Date 140 Construction Law Seminar September 2012 Texas.Lawyer.FinalDraft.April.2012 Page 9 of 11

APPENDIX #2-1 Page Questionnaire (Dallas ABOTA) TO BE USED ONLY FOR THIS JURY TRIAL (Civil) TOTALLY CONFIDENTIAL JUROR # 1) Full Name: 2) Age: Place of Birth: Years at current address: 3) Type & year of all autos: 4) What are your duties or responsibilities at work? What jobs have you held in the past? 5) Have you ever served in the military? Yes No If Yes, when and where did you serve and what was the highest rank you achieved? 6) What is your educational background? What is your spouse/significant other s educational background? 7) If married or living with someone, what are their duties or responsibilities at work: What jobs has your spouse/significant other held in the past? 8) Names, ages and occupations of children & step-children: Any deceased children? If Yes, please explain: 9) Favorite TV shows: Favorite radio talk shows: Favorite movies: 10) Are you a: Democrat Independent Republican Other: 11) Hobbies: 12) Please describe how you learn the best: Visual Both (Visual & Audio) Audio Other: 13) Which of the following do you prefer the most: Books Movies Internet TV Newspapers & Magazines, please list: 14) Parents occupations? Occupations of your brothers and sisters? 15) Member of any organizations (include political, religious, social, cultural) Ever been a union member? If so, what union? 16) Were you or a family member ever a Plaintiff Defendant or Witness in a lawsuit? If so, please describe briefly, (where, when, what type, outcome) Name of attorney representing you/family member: 19) What is your opinion about punitive damages? (Extra damages as punishment) 22) Please write three words that best describe yourself: 17) If you or a family member have ever been seriously injured, please describe what happened: 20) Newspapers, magazines, or journals regularly read: Internet sites regularly visited: What is your main source of news? Newspaper Radio Internet TV Friends & Family Radio Talk Shows 23) Any reason you are unwilling, unable or prefer not to serve as a juror: 18) Under what circumstances would you file a lawsuit? 21) If you or a family member have any relationship to the medical, legal, or insurance fields (claims adjusting and claims settlements), please describe: 24) Any comments you wish to make: Any physical, medical, or psychological issues you wish to call to the court s attention: Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 141 Texas.Lawyer.FinalDraft.April.2012 Page 10 of 11

A DOZEN DO S FOR A QUESTIONNAIRE 1. DO the questionnaire at least a few weeks before trial 2. DO include a Confidentiality/Explanation cover page 3. DO keep the questionnaire short - 1 page is preferable 4. DO number each question 5. Do include at least one Scaled question 6. DO include at least one open ended question 7. DO include the question that asks for three words to describe the juror 8. DO include a hardship question near the end of the questionnaire 9. DO ask, Any final comments? as your last question 10. DO a careful review to make sure the questionnaire has no mistakes 11. DO involve opposing counsel so the result is an agreed questionnaire 12. DO let the judge know in advance that there is an agreed to 1 page questionnaire that the parties would like to use 142 Construction Law Seminar September 2012 Texas.Lawyer.FinalDraft.April.2012 Page 11 of 11

IX. Using Voir Dire to Set the Stage for a Favorable Verdict in your Case Using Voir Dire to Set the Stage for a Favorable Verdict in your Case. By Lisa Blue and Robert Hirschhorn We are often asked if voir dire can influence the ultimate outcome of a close case. The answer is clear and unequivocal - voir dire done properly can influence a favorable outcome while a poor voir dire will influence an unfavorable result. We want to address the three effective ways to condition a jury in voir dire: 1. An effective Power Statement; 2. Conditioning questions; and, 3. Looping answers given by the jurors. To develop an effective voir dire strategy, you have to begin with a realistic expectation for both you and your client as to what constitutes a win. From the plaintiff s perspective, in many cases a finding of liability and maximum damages is the desired result. In other cases an affirmative finding on liability is sufficient. From the defense perspective, winning is either a finding of no liability or reduced/minimal damages. Having a clear vision is essential for an effective voir dire and using your peremptory strikes on the right members of the venire. Now that you have determined what constitutes a win, you are ready to design your voir dire. First and foremost, you need a concise Power Statement that frames the essence of the case into in a single sentence. Think of the Power Statement as the headline to the lead story. The most effective Power Statements are those that are simple, easy to understand and have three components to Texas Lawyer - April 17, 2012 Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 143

them. The classic example is the Power Statement Lisa used to start her Asbestos trials - This is a big and important case, but is also a simple case, as simple as A B C - Asbestos, Breathing Asbestos and Cancer from Breathing Asbestos. Without arguing or committing jurors to the facts of the case (which is improper voir dire under Hyundia), Lisa was able to effectively set the agenda for the trial. Power Statements are a powerful tool when a defendant has a strong liability case. In a recent truck accident/wrongful death case, the defendant s power statement was strong, simple and clearly resonated with the jury - The plaintiff was driving too fast at the time he ran into the back of our truck. That simple little sentence set the tone for the entire trial which resulted in a complete defense verdict. Applying the principal of Primacy and Recency (that is, jurors remember the first and last thing you tell them) an effective Power Statement should always be your starting and ending point of voir dire, Opening Statement and Closing Argument. It is essentially your trial slogan which you want the jury to understand, remember and repeat during their deliberations. The second method of influencing the jury is by using conditioning questions. These are questions that cement a concept into the mind of the jury. For example, we were assisting the defense in a legal malpractice case. One fact that we Texas Lawyer - April 17, 2012 144 Construction Law Seminar September 2012

believed was central to our defense was that the plaintiff was not honest with our client when he represented her. We wanted to condition the jury on the concept that a lawyer can only do their job if the client is honest with the attorney. The two main ways to condition a jury is to either use a scaled question or make a statement and find out who on the panel agrees or disagrees with the statement. I n o u r example, we chose to ask a s c a l e d question. Below is our voir d i r e PowerPoi nt slide o n t h i s issue. Texas Lawyer - April 17, 2012 Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 145

We fully expected that every single juror would answer this question with 9 or 10. If any of the jurors answered this question with a 5 or less, the venire member would be on our radar screen for either a challenge for cause or a peremptory strike. As we expected, the vast majority of jurors gave an answer of 10 with a handful of prospective jurors giving an answer of 9. The fact that every single juror strongly agreed with this principle reinforced our belief of how important a concept this was. We were in the position of being able to ask the Plaintiff on cross examination this very question. It was a win-win. If the plaintiff gave an answer of 10, we would be able to prove that the plaintiff did not tell the lawyer the truth about some key issues. If the Plaintiff gave an answer on the lower end of the scale, the jurors would realize that the Plaintiff did not share their value system. As it turned out, the plaintiff answered this question with a 5. The jurors returned a defense verdict. Conditioning questions are designed to intentionally and consciously embed a concept into the minds of the jurors. Conditioning questions can be asked about principles of law as well as key issues in a case. As a plaintiff, you want the juror to only hold you to a preponderance of the evidence. You can condition the venire by showing the concept (showing the slight tipping of a scale of justice or using the single sheet more example with 2 reams of paper - the single sheet constituting the greater weight of credible evidence). You can also use a scaled question to condition the jury on the preponderance principle - On a scale of 0-10, how strongly do you agree or disagree with this principle of the law: A Plaintiff only Texas Lawyer - April 17, 2012 146 Construction Law Seminar September 2012

has to prove their case by a Preponderance of the Evidence (which means the greater weight of the credible evidence). When you want to condition the jury to a principle of law, it must be an important principle of law, it must be simple for a jury to understand and the principle must be contained in the Jury Charge. Jurors are predisposed to accept a principle when you say it, but jurors will follow and apply the principle when it comes from the Judge. To condition the jury on an issue in the case, you must spend the time thinking about a way to frame the issue simply and in a manner that virtually every juror will agree to. For example, in a product liability case, the plaintiff wants to condition the jury to the concept that a company should disclose known defects or problems. The lawyer would want to ask a scaled question such as: On a scale of 0-10, how strongly do you agree or disagree with the following statement - A COMPANY SHOULD NOT HIDE KNOWN PROBLEMS OR DEFECTS WITH ITS PRODUCTS FROM CUSTOMERS. The defense should use a scaled question to condition or anchor the jury with the concept that even a safe product can hurt you if it is used improperly. The main point to take away from conditioning questions is that you want design the question so that the vast majority of your jury panel will be compelled to strongly agree with the question. Remember, you are not trying to flush out or identify your unfavorable jurors, rather, you are trying to firmly establish an idea in the conscious of the panel. Texas Lawyer - April 17, 2012 Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 147

The final way to condition the jury is to use a technique that we refer to as looping. The term looping is the process whereby a lawyer asks an open ended question to one of the jurors and then loops or repeats that answer to another juror and asks for their reaction or response. This technique of looping is remarkably effective at stimulating a discussion among the jurors but it is also extremely time consuming. The rule of thumb that we follow is that you should only use the looping technique once every 30 minutes. Thus, if the Judge has given you an hour for voir dire, you can use the looping technique two times. The reason that looping is such a powerful tool is because jurors are naturally skeptical of lawyers because they understand that attorneys are advocates by trade. Panel members are much more likely to believe and accept what is being said by a member of their peer group. If a juror expresses a reasonable, rationale and intelligent opinion, fellow jurors (if they are paying attention) tend to agree with the view espoused. Since jurors have the power influence and persuasion, it is easy to see why looping can play a powerful role in conditioning the jury panel. For example, if you wanted to condition the jury panel on the concept of responsibility (corporate responsibility if you represent a plaintiff and an individual s responsibility if you represent a corporation and you are wanting the jury to place a higher percentage of responsibility on the plaintiff), you would want to use the looping technique. You would start with a juror who appears interested and engaged in the process (if you have the benefit of a questionnaire, start with a juror who had no problem expressing their opinion) and Texas Lawyer - April 17, 2012 148 Construction Law Seminar September 2012

ask them a question such as - I think we would all agree that people should be held accountable for their conduct, why is it important to hold companies to the same standard? If the juror gives an answer you like, pick a juror on the other side of the room and say to that panel member, Ms. Smith, you just heard Mr. Jones say (use the prior juror s name, it makes that person feel important and rewarded) that if a company s conduct hurt someone, the only way you can get the corporate culture to change is to hold them accountable. Please tell us how you feel about this? If this juror gives a favorable answer, say to the panel, if you agree with what Mr. Jones and what Ms. Smith said, please raise your hand. Pick one or two more of the jurors who raised their hands and ask to tell you their opinion. If the juror simply says I agree with Mr. Smith, ask the juror to share the view, ever if it is exactly the same. By the time 3 or4 jurors have expressed the similar view, then panel is prone to being conditioned on this point. N.B. - You DO NOT want to ask if anyone has a different or opposing view. That will defeat the purpose of using this conditioning technique. If you are inclined to find out if anyone on the panel disagrees, wait until a handful of jurors have expressed the view that supports your position and only then should you ask if there is anyone on the panel that disagrees with the views that have been expressed. When you are wanting to condition the jury, you want uniformity of opinion. When you are wanting to identify your favorable and unfavorable jurors, you are not conditioning so you want to the jurors to tell you who agrees and who disagrees with a particular issue. Texas Lawyer - April 17, 2012 Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 149

In the final analysis, in every single civil or criminal case, your voir dire needs to consist of questions designed to obtain information from the panel members, questions designed to identify your unfavorable jurors and questions designed to condition your jury panel. How much time you spend conditioning your panel depends on the nature and strength of your case. Conditioning is not designed to identify your unfavorable jurors. Rather, it s purpose is to identify the path that the jurors will have to travel and effect the ultimate outcome of the case. Texas Lawyer - April 17, 2012 150 Construction Law Seminar September 2012

Win Your Case Before the Trial: X. Win Your Case Before the Trial: Mock Jurors Mirror Actual Jurors in High Profile Mock Case Jurors Mirror Actual Jurors in High Profile Case By: Alexandra C. Figari and Robert B. Hirschhorn Imagine your next trial. Wouldn t it be great if before your next trial even began, you knew exactly how the jury was going to react to the evidence presented in the case? Think how powerful it would be if you had unabashed insight into the jury s interpretation of not only the evidence, but also the credibility of witnesses, the traction of case themes, and the effectiveness of delivery. Welcome to the world of mock trials. Lawyers often spend an exorbitant amount of time and energy preparing for trial, but each case always comes down to the same thing the only thing left mattering in the end and that is the heart of our legal system, the jury. No preparation could be more helpful, more powerful, or more profound than the opportunity to enter trial with foresight concerning how the jury will react to and understand your case. An attorney who recognized the unparallel value of obtaining an early glimpse into the minds of jurors, recently hired the authors to conduct a mock trial for a case that was on its way to trial. The client was a high profile doctor who was being accused of domestic abuse by his wife. Counsel s decision to test out the defense with a mock trial proved to be a good one, and the mock jury not only provided accurate insight into jurors interpretation of the case, but it also gleaned information that was fundamental in driving the direction of the case for trial. Four main themes emerged during the mock trial deliberations, and it would be those same four themes that would again reemerge weeks later when the actual jurors were interviewed by the media after returning a not guilty verdict. When quotes from the actual jurors were considered with quotes from the mock jurors, the similarities and overlap were profound and unmistakable. Upon closer comparison of the trial jurors quotes in the media, it became clear that the mock trial deliberations had served as almost an exact mirror image of the deliberations that took place in the jury room at the Harris County courthouse. Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 151

One of the greatest benefits of conducting a mock trial is the abundance of genuine feedback ascertained from the mock jurors, which is typically extracted through written evaluation forms, deliberations, and post-verdict debriefing. Although the mock jurors identified a number of important issues in the case, each deliberation group seemed to touch on the same four themes. The fact that all of the deliberation groups keyed in on the same four themes was very revealing in itself, but it was also deemed significant for another reason. The discussions that emerged between the mock jurors allowed the trial team to pinpoint both the strengths and weakness of their case, as well as distinguish the evidence and themes that gained the most traction. As a result of the knowledge acquired through the mock trial, the approach to the case was modified, and the case was tried based on the recommendations gleaned from the research. It is one thing for a lawyer to learn from a mock trial, but it is another thing for a lawyer to take that knowledge and modify or transform their approach to trial accordingly. During trial, the defense team drew on the four central ideas that had surfaced during the mock trial deliberations, and at the end of trial, the commentary from the actual jurors served as proof that the themes were powerful motivators in driving them to their verdict of not guilty. The first theme to emerge during the mock trial was the idea that the injuries from the alleged domestic abuse were exaggerated. This theme was originally brought to light through comments made by the mock jurors such as, I think the prosecution is exaggerating the physical contact 1 2 between [the husband and wife] and if he wanted to hurt her, he probably could of. A number of weeks later, the case went to trial and a local newspaper who did post-verdict reporting on the trial published several quotes from the actual jurors. The Houston Chronicle article included the following statement: most of the jury thought that she exaggerated the 1 2 Deliberation Rm2 AM, Cathy E. Bennett & Associates, Inc. (August 27, 2011), DVD. Deliberation Rm1 PM, Cathy E. Bennett & Associates, Inc. (August 27, 2011), DVD. 152 Construction Law Seminar September 2012

injury, said [one] juror [...]. He probably could have hurt her if he had wanted to. There was 3 some pulling and tugging going on. This quote taken from a juror who served on the actual trial jury is almost word for word what the mock jurors expressed during their deliberations, illustrating what an enlightening tool jury research can be when it is done properly. The second theme to emerge was the role of intent in regards to the alleged abuse. In two separate deliberation groups, mock jurors made the following remarks: he did not 4 knowingly and intentionally twist her arm to cause bodily harm and not guilty. I don t believe 5 that he intentionally committed the act with the intent to harm her. Making almost an identical statement, the foreman for the actual jury was quoted after trial saying, to call him guilty we would have had to say that he intended to catch her at the door and he intended to twist her 6 arm, and we just weren t there. Furthermore, other news sources reported that the jurors 7 identified the doctor s intent as the most important issue, and said they just didn t believe [the doctor] intended to hurt his wife. 8 The distinct mirroring between the mock trial and the actual trial does not stop with the second theme. The third theme refers to emphasizing both the concept of reasonable doubt and the importance it plays in reaching a verdict. One mock juror succinctly summarized this theme when she said, the issue is not whether he did it or not. The issue is whether the State 3 Rogers, Brian, Brown jurors: There was not enough evidence, Houston Chronicle (Sept. 20, 2011), http://www.chron.com/news/houston-texas/article/former-hand-surgeon-found-not-guilty-in-assault-2180599.php. 4 5 Id. at 2. Deliberation Rm1 AM, Cathy E. Bennett & Associates, Inc. (August 27, 2011), DVD. 6 Former hand surgeon found not guilty of assaulting his wife, ABC 13 HOUSTON KTRK (Sept. 20, 2011), http://abclocal.go.com/ktrk/story?section=news/local&id=8360994. 7 8 Id. at 3. Id. at 6. Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 153

9 proved it beyond a reasonable doubt, and they failed to do that. Referencing the same dilemma, as well as the overriding notion of doubt, one of the trial jurors made the following comment: it didn t make [the doctor] innocent, in my eyes or anybody else s, but it did show 10 enough doubt, for us. The fact that both the mock jurors and the actual trial jurors expressed skepticism regarding the doctor s innocence confirms that the verdict was never a sure bet. The fourth theme to emerge during the research project and subsequently become a significant component in the trial approach was the focus on the complainant s character. A Houston-based news station published the following statement: during the trial, prosecutors tried to paint [the doctor] as a violent, abusive husband, while defense attorney Dick DeGuerin 11 tried to bring [the complainant] s character into question. This theme gained quite a bit of traction with the trial jurors as evidenced through post-verdict comments such as, we didn t 12 13 believe [the complainant], necessarily,...she lost credibility, and we felt like she tried 14 to portray herself as somebody she wasn t in the beginning. Once again, these comments closely mimicked the sentiment expressed weeks earlier by the mock jurors who stated that 15 16 she wasn t as believable as [the doctor], she wasn t trustworthy, there were 9 10 Id. at 1. Id. at 3. 11 Zubowski, Courtney, Not guilty: Houston hand doctor walks free after assault trial, KHOU 11 News (Sept. 20, 2011), http://www.khou.com/news/crime/not-guilty-houston-hand-doctor-walks-free-after-assault-trial- 130200428.html. 12 Rogers, Brian, Jury rules Michael Brown not guilty in assault trial, Houston Chronicle (Sept. 20, 2011), http://www.chron.com/news/houston-texas/article/jury-rules-michael-brown-not-guilty-in-assault-2178728.php. 13 14 15 16 Id. Id. at 6. Id. at 5. Id. at 1. 154 Construction Law Seminar September 2012

17 18 inconsistences in her testimony, and it seems like [the wife] blames everyone else. In addition to identifying helpful and damaging evidence, testimony, and themes for your case, there are other benefits of conducting a focus group (lawyer presentations only) or a mock trial (lawyer presentations plus witness vignettes) that are often unexpected, but frequently just as meaningful. Big cases often turn on smalls facts, and this case was no exception. The mock jurors were shown police photographs of the scene where the alleged domestic abuse occurred, including a photograph of a vase broken on the floor. The complainant testified that the doctor threw the vase at her, but several mock jurors picked up on the fact that it looked like the vase had either been dropped or knocked over, rather than thrown, because the flowers were all in a neat pile on the floor. This simple nuance proved to be a turning point in the case because it established uncertainty and made jurors more wary of the complainant s story. Witness testimony proved to be a powerful component in this case, and although the mock jurors were not able to hear the testimony of either the nanny or the bodyguard (both of which were at the home the night of the alleged incident), the mock jurors taught the trial team that if any inconsistencies existed between the testimonies of the complainant, the bodyguard, and the nanny, then they would be much less likely to believe the charges and hence less likely to convict. Regarding the testimony of the Defendant himself, at the time of the mock trial there was still uncertainty among defense counsel about whether or not it was in the doctor s best interest to testify at trial. In order to arrive at this decision in the most informed manner possible, the authors decided to conduct the research project with both a morning and an afternoon session. In the morning session, the mock jurors heard case presentations from both sides and the defense lawyer included the Defendant s testimony in his presentation. In 17 18 Id. at 5. Id. at 1. Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 155

the afternoon, a new group of jurors arrived and heard the same case presentations, except the defense attorney left out the doctor s testimony during the afternoon session. Structuring the research project in two sessions allowed the trial team to gauge jurors reactions to both the absence and presence of the Defendant s testimony, and therefore arrive at an informed decision regarding whether or not it was in the Defendant s best interest to take the stand at trial. rd Judge Jim Wallace of the 263 Criminal Court did an outstanding job of presiding over the trial and his rulings allowed both the prosecution and the defense to try a fair case. The jury started deliberations with a 10 to 2 vote for not guilty and after more than five hours of 19 deliberating, they reached a verdict and found the doctor not guilty. Although numerous factors contributed to the defense team s success, there is no dispute that the mock trial was greatly advantageous for the attorneys preparation, approach, and strategic decisions as to the best way to try the case. To ensure that a mock trial is as beneficial as possible, it is important to schedule the research far enough in advance of trial in order to give counsel adequate time to react to the information learned (the authors recommend scheduling a project 4-6 weeks prior to the trial date). In addition to coordinating the research around the trial date, there are several other key components that must be taken into consideration in order for a project to be as effective and useful as possible. First, to ensure the reliability of a research project, it is crucial that the project participants reflect a representative cross section of individuals, which mirror a jury panel in the jurisdiction where the case will be tried. The second component critical to a successful research project is the notion that counsel must put on their opponent s best case, rather than their own best case. In the example discussed in this article, the attorneys not only presented the prosecution s best case scenario, but they also crafted the defense 19 Id. at 3. 156 Construction Law Seminar September 2012

presentation using a minimal amount of persuasion, and were careful not to include any defense evidence that was either speculative or of questionable admissibility. Adopting this approach allows the trial team to obtain feedback from the jurors about which facts are the most damaging for their case, as well as the importance or irrelevance of certain pieces of evidence. In order for the mock trial to elicit as much valuable insight as possible, it is also imperative that any videotaped witnesses shown during the project reflect the testimony most favorable to your opponent. Presenting the opponent s strongest case brings out the true weaknesses in one s own case, and allows the attorneys to get feedback on how to effectively manage or debunk those weak points during trial. The benefit and importance of jury research is neither isolated nor restricted to this example or even to this type of case. When a focus group or a mock trial is conducted properly, the value is extensive and these same results have been seen time and time again with both criminal and civil cases. An attorney can never be completely certain of a verdict, but this type of research goes beyond the scope of traditional trial prep, and provides legal counsel with the insight and awareness they need in order to try the best case possible and increase their chances of obtaining a favorable verdict. Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 157

SAMPLE CHALLENGE FOR CAUSE CHART XI. Samples - Challenge for Cause Chart # REASON FOR CAUSE # REASON FOR CAUSE A B C D E F G H I J # CAUSE # CAUSE # CAUSE 1. 21. 41. 2. 22. 42. 3. 23. 43. 4. 24. 44. 5. 25. 45. 6. 26. 46. 7. 27. 47. 8. 28. 48. 9. 29. 49. 10. 30. 50. 11. 31. 51. 12. 32. 52. 13. 33. 53. 14. 34. 54. 15. 35. 55. 16. 36. 56. 17. 37. 57. 18. 38. 58. 19. 39. 59. 20. 40. 60. 158 Construction Law Seminar September 2012

XII. Samples - One-Page Juror Questionnaires The information provided in your answers to this questionnaire will be held strictly confidential JUROR NAME: AGE: JUROR #: 1. Where do you work and what is your job? 2. What is your current marital status? 3. Highest grade you completed in school: What jobs have you held in the past? Where does your spouse/partner work and what is this person s job? If college, please list college attended and any degrees received: 4. Circle any of the following in which you have received training or education: Architecture Engineering Business law Construction Design or Drafting Electricity Insurance Insulation 5. Have you ever worked for / done business with Cooper Homes or any home builder? please explain: 6. Have you ever worked for / done business with Williams Insulation or any YES, please explain: 7. Have you or any family members ever worked in the construction industry? 8. Have you ever purchased a new home / condominium or remodeled a home? was the builder? 9. While building or remodeling a home, have you or anyone you know ever had a bad experience with the builder or a subexplain: 10. Have you ever lived in a house, 11. What duties or responsibilities do sub-contractors owe to the general contractor? 12. What duties or responsibilities does the general contractor owe to the owner? 13. Who should be responsible for a construction defect [ all that apply]: -contractor PLEASE EXPLAIN: 14. Have you ever been a Plaintiff (the person suing) or a Defendant (the person being sued) in a lawsuit? 15. Have you ever served as a juror in a What type of civil case(s)? What was the verdict? 16. Which of the following words best describe you [ all that apply]: -decisions 17. List 3 people you admire most: 1. 2. 3. List 3 people you admire least: 1. 2. 3. 18. Is there any other reason why you would be unwilling or unable to serve as If YES, please explain: I hereby swear or affirm that all the answers contained in this juror questionnaire are true and correct. Juror s Name Date Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 159 CONFIDENTIAL

The information provided in your answers to this questionnaire will be held strictly confidential. JUROR NAME: AGE: JUROR #: 1. Where do you work and what is your 2. What is your current marital status? 3. Highest grade you completed in job? school: What other jobs have you held? Where does your spouse/partner work and what is this person s job? If college, please list any degrees received: 4. Circle any of the following in which you have received training or education: Accounting Contracts Architecture Business law Construction Design or Drafting Engineering Insurance coverage 7. Have you or anyone you know ever worked in the construction industry? 5. Have you ever worked for or done business with Lochshire LLC, Buchan Properties, John F. Buchan Construction, Prescott Homes or Carl Pollard? 8. Have you ever purchased a new home / condominium or remodeled a home? the builder? 6. Have you ever worked for, done business with, or hired Stanton Spray or Professional Home Builders? 9. While building or remodeling a home, have you or anyone you know ever had a bad experience with the builder or a subexplain: 10. Have you ever lived in a house, condo or apartment that leaked (roof, windows etc.) or had other construction explain: 11. What duties or responsibilities do subcontractors owe to the general contractor? 12. What duties or responsibilities do general contractors owe to the owner? 13. Who should be responsible for a construction defect [ all that apply]: -contractor PLEASE EXPLAIN: 14. Have you ever been a Plaintiff (the person suing) or a Defendant (the person being sued) in a lawsuit? 15. Have you ever served as a juror in a What type of civil case(s)? What was the verdict? 16. Which of the following words best describe you [ all that apply]: tical -decisions 17. List 3 people you admire most: 1. 2. 3. List 3 people you admire least: 1. 2. 3. 18. Is there any other reason why you would be unwilling or unable to serve If YES, please explain: I hereby swear or affirm that all the answers contained in this juror questionnaire are true and correct. Juror s Name Date CONFIDENTIAL 160 Construction Law Seminar September 2012

INTRODUCTION: VOIR DIRE QUESTIONS for Celotex Tell the jurors that this is a very big and a very important case but it also a very simple case. Do a SHORT summary of the case. This summary should take no more than 30 seconds( The plaintiffs are claiming that we committed fraud even though the property was sold as is, where is, with all faults ). We are not trying to persuade but instead, trying to get our theme out there and then identify our potentially bad jurors. Tell the panel that, It is honorable to serve on a jury. It is also honorable NOT to serve on a jury if this is not the right case for you. If at anytime you feel this way, please just let us know. Tell the jurors there are no right or wrong answers to the questions you will be asking. All that you are asking of the jury is that they be honest and forthright in their answers. Do not tell the jurors that you are looking for 12,...fair and impartial jurors. This will condition the jurors to give the fair and impartial response rather than the honest response. Let the jury know that many times jurors want to talk privately about an answer to a question. Tell them if any juror would feel more comfortable sharing an answer in private, that person should simply let you know. Tell the jurors that it s been your experience that many jurors believe that if they don t talk, they won t be selected. Then tell the jurors that the folks who most often end up serving on the jury are the people who don t say much during the lawyer Attorney-Client and Work-Product Privileges Page 1 of 14 Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 161

questioning. All we ask is that you share with us any opinion or reaction that you have to our questions. 1. [Pick a juror] [Juror s name], If a juror started this trial favoring the plaintiff, that would not be fair, would you agree with me? [Juror s name], I am going to be talking about a number of issues in this case and if at any point you feel that you are favoring or leaning toward the plaintiff, would you feel comfortable raising your hand and saying, Craig, I feel like I m favoring or leaning toward the plaintiffs in this case? Is there anyone on the panel who would not be willing to raise their hand and let me know if at any point they feel like they are favoring the plaintiffs? Explain to the jurors that when lawyers refer to a juror having a prejudice or bias, that means a leaning or prejudgement. Because of the issues that will be raised during this trial, there may be a number of jurors that have formed opinions that would cause them to have a leaning or prejudgment. Let me give you an example of what I m talking about - there will be a lot of talk about this property containing asbestos. Some people have very strong opinions about asbestos. We would expect that and that is ok if you have such strong feelings or opinions, we just need to know. Attorney-Client and Work-Product Privileges Page 2 of 14 162 Construction Law Seminar September 2012

FAVORING PLAINTIFF: [ELIMINATION] 1. [Pick a juror on the first row] [Juror s name], the lawyer for the plaintiff spent [insert amount of time] telling you about this case. As you sit there right now, do you feel that you are leaning or favoring the plaintiff in this case? 2. [If juror says NO, pick another juror. If juror says YES, go row by row and find out who else agrees with that juror and feels the same way] Thank you [juror s name], for being so honest. You have done exactly what we and the Judge want you to do which is to let us know if you have formed an opinion, so again, thank you. Who else on the first row feels the same way as [juror s name] and is leaning or favoring the plaintiff in this case? Second row, third, etc. 3. [Go back to the initial juror who said she is favoring the plaintiff ] [Juror s name], you were very honest when you told us that you were already favoring the plaintiff. Since you are favoring the Plaintiff you are starting out with a leaning or prejudgment, what the law calls a bias or prejudice, would that be fair to say? [subtly nod your head as you do this question] 4. [if juror says YES, ask each of the other jurors who raised their hand this question]. Would your answer be the same as [juror s name]? And so we are clear, you are telling us that you also would start the trial with a leaning or prejudgment, what the law calls a bias or prejudice? Attorney-Client and Work-Product Privileges Page 3 of 14 Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 163

PLAINTIFF IN A LAWSUIT: [ELIMINATION] 1. Other than a divorce, has anyone on the first row ever been a Plaintiff (the party that is suing) in a lawsuit? Second row, third, fourth? (To the jurors who say yes, find out what type of case, how long ago, and if they were satisfied or unsatisfied with the result) 2. [If a juror has been a Plaintiff] Would that experience cause you to start this case leaning in favor of the plaintiff or with a prejudgment against the Defendant? 3. [If juror says YES] Thank you [juror s name], for your honest answer. Who else on the first row who has been a plaintiff in a lawsuit feels the same way as [juror s name] and is leaning in favor of the plaintiff or has a prejudgment against the Defendant? Second row, third, etc. 4. [Go back to the initial juror who said she is favoring the plaintiff] [Juror s name], you were very honest when you told us that you were already favoring the plaintiff. Would it be fair to say that you start this trial favoring the plaintiff and that the defendant is not starting the trial even? [subtly nod your head as you do this question] 5. [If juror says YES, ask each of the other jurors who raised their hand this question]. Would your answer be the same as [juror s name]? And so we are clear, you are telling us that you are starting out with a leaning or prejudgment, what the law calls a bias or prejudice, fair to say? 164 Construction Law Seminar September 2012 Attorney-Client and Work-Product Privileges Page 4 of 14

OPINIONS ABOUT THE CASE GETTING TO THIS POINT: [ELIMINATION] 1. [Pick a juror] Do you feel that because the plaintiff has brought a lawsuit that the defendant must have done something wrong? 2. Does anyone on the first row feel that the defendant must have done something wrong or else the plaintiff would not have brought this lawsuit? Second row, third, fourth, etc 3. [Pick a juror] Do you feel that because this case has gotten this far, it must be valid? 4. Does anyone on the first row feel that because this case has gotten this far, that it must be valid? Second row, third, fourth, etc 5. [Pick a juror] Do you feel that because the plaintiff has brought a lawsuit the plaintiff is entitled to some money? 6. Does anyone on the first row feel that because a lawsuit had to be brought, the plaintiff is entitled to some money? Second row, third, fourth, etc [If any of the jurors answer YES, then ask each one the question about them starting off with a leaning or prejudgment. Attorney-Client and Work-Product Privileges Page 5 of 14 Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 165

KNOWLEDGE OF CELOTEX: [EDUCATION] 1. Does anyone know any former employees of Celotex? 2. Has anyone heard or read anything about Celotex? 3. If Yes, what have you heard or read? 4. Based on what you have heard or read, which of the following best describes your opinion of Celotex: Very Positive Positive Neutral Negative Very Negative Attorney-Client and Work-Product Privileges Page 6 of 14 166 Construction Law Seminar September 2012

CONTRACTS 1. As you already know, this case is about a contract for the purchase of property that many, many years ago manufactured asbestos products. Please raise your hand if you were taught that if you signed a contract, you were bound to the contract? 2. Has anyone on the panel ever taken a business law class or a class on contracts? 3. Has anyone ever had a job where you were responsible for writing or signing a contract. BAD EXPERIENCE WITH A CONTRACT: [ELIMINATION] 1. [Pick a juror] Have you ever had a big problem or negative experience with a contract? 2. Who else on the first row has ever had a big problem or negative experience with a contract? Second row, third, etc 3. [Ask this question to each of the jurors who answered YES] As a result of that experience have you formed a negative feeling or opinion about contract cases? 4. [Ask this question to each of the jurors who answered YES] Would it be fair to say that experience would cause you to start this trial with a prejudgment or leaning against the defendant? Attorney-Client and Work-Product Privileges Page 7 of 14 Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 167

LAW IMPOSES A LEGAL DUTY NOT A MORAL DUTY 1. There is a difference between a moral duty and a legal duty. [Pick a juror], the law only imposes a legal duty and the law never imposes a moral duty? Do you agree with that? 2. Does anyone on the panel disagree and feels that the law imposes a moral obligation in addition to a legal duty? 3. Is there anyone on the panel that would impose not only a legal duty but a moral duty as well on someone who was selling something? 4. Will everyone on the panel promise to only impose the legal duty and not a moral duty as well? AS IS WHERE IS 1. Has anyone on the panel ever purchased a product that was sold, as is? For example, many times cars or trucks are sold as is. Can anyone think of a time when you bought something as is? 2. Has anyone ever bought something as is and then tried to return it? 3. If a person bought a piece of furniture as is, do you think the store where it was bought would be required to give the money back if the customer returned it? 4. If you bought a car or truck as is, would you have someone you trust look at the vehicle before you bought it? Why 5. When you hear that something is being sold as is, what does that mean to you? 6. [Pick a juror], when you see a sign that says, all sales are final, what did you understand that to mean? 7. Has anyone ever bought something that you felt was a lemon? If yes, what did you buy? When you bought it, was it sold as is? 8. If you bought a lemon but the contract you signed said it was sold, as is, do you feel you should have the right to return it? 168 Construction Law Seminar September 2012 Attorney-Client and Work-Product Privileges Page 8 of 14

9. Let s say you bought a truck as is and prior to buying it, you had a mechanic look at it and you decided to buy it. Later on you learn that the truck had water damage, should you be able to return it to the dealer and get your money back? 10. In the case of something that is sold as is, why is it important for the buyer to thoroughly check it out before they purchase it? 11. Who feels that when something is being sold as is and the buyer has the opportunity to have it inspected prior to buying, that the seller must point out the problems? Attorney-Client and Work-Product Privileges Page 9 of 14 Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 169

EXPERIENCE WITH A REAL ESTATE: [EDUCATION] 1. I m going to ask each person on the panel how homes have you purchased in your lifetime. 2. Has anyone on the panel ever purchased any commercial property? BAD EXPERIENCE WITH A REAL ESTATE DEAL: [ELIMINATION] 1. [Pick a juror] Have you ever had a big problem or negative experience with a real estate deal? 2. Who else on the first row has ever had a big problem or negative experience with a real estate deal? Second row, third, etc 3. [Ask this question to each of the jurors who answered YES] As a result of that experience have you formed a negative feeling or opinion about cases involving real estate deals? 4. [Ask this question to each of the jurors who answered YES] Would it be fair to say that experience would cause you to start this trial with a prejudgment or leaning against the defendant? EXPERIENCE AS AN APPRAISER: [EDUCATION] 1. Is there anyone on the panel, either yourself or a family member that has ever worked as any type of appraiser (that is, a person that determines the value of real estate, cars, jewelry, etc) 2. What is the purpose of an appraiser? 3. What should an appraiser do to determine the fair market value of something? BAD EXPERIENCE WITH A REAL ESTATE APPRAISER: [ELIMINATION] 1. Has anyone on the panel ever had any type of bad or negative experience with a real estate appraiser? 2. If YES, would that experience affect your ability to serve as a juror in this case or could you set that experience aside and decide this case on the evidence, testimony as the law? Attorney-Client and Work-Product Privileges Page 10 of 14 170 Construction Law Seminar September 2012

ASBESTOS: [ELIMINATION] 1. Now I want to talk about the Asbestos aspect of this case. Let me be clear, there is no claim that the health of these plaintiffs were affected or hurt by Asbestos. As I told you a few minutes ago, the property we are talking about used to manufacture asbestos products many years ago. [Pick a juror] Have you, any family members or close friends ever been exposed to asbestos? [We do not, at this point want the juror to describe the experience, tell juror we will talk more about that experience a little later] 2. Has anyone on the panel or any of your family members ever brought a claim or lawsuit as a result of being exposed to asbestos? 3. Is there anyone on the panel that has such strong feelings or beliefs about asbestos that it would affect your ability to be a fair juror in this case? 4. [If juror says YES] Thank you [juror s name], for your honest answer. Who else on the first row has such strong feelings or beliefs about asbestos that it would affect your ability to be a fair juror in this case? Second row, third, etc. [DO NOT LET ANY OF THE JURORS DESCRIBE THE BAD EXPERIENCE AT THIS POINT OF THE VOIR DIRE!] Attorney-Client and Work-Product Privileges Page 11 of 14 Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 171

FRAUD 1. From what you have already heard from the attorney for the plaintiffs, how many members of the jury panel believe that the defendant may have committed fraud in this transaction? 2. At the end of the case, the Judge will tell you the legal definition of fraud. We anticipate that the Judge will tell you that fraud has certain elements and that the plaintiff must prove each and every element. Will everyone assure us and the Judge that you will follow that law? 3. Let me explain this a little further. The law requires the plaintiff to prove each and every element and if they fail to prove by the greater weight of the credible evidence even 1 of the elements, the law requires you to return a verdict in favor of the defendants. [Pick a juror], will you feel comfortable doing this? 4. Please raise your hand on the first row if you will feel comfortable finding for the defendant if the plaintiff does not prove by the greater weight of the credible evidence even 1 element of their fraud claim? 5. Is there anyone on the first row that would feel uncomfortable doing this? 172 Construction Law Seminar September 2012 Attorney-Client and Work-Product Privileges Page 12 of 14

BURDEN OF PROOF: [EDUCATION] 1. In a civil case, the party bringing the case must prove their case by a preponderance of the evidence. Here is what that means: [Pick up a ream of paper] As you can see, I have a ream of paper in my right hand. Let s say the plaintiff presents this amount of credible evidence, and let s say we present [pick up another ream of paper] this amount. If the amount of credible evidence that is presented is equal, the plaintiff has not proven their case and the law says the plaintiff must lose their case. Now let me ask you a few questions. [Pick a juror] [Juror s name], does that sound fair to you...that the plaintiff must present more credible evidence than the defense before they can win their case? [pick another juror] Does it sound fair to you that if we present just as much credible evidence as the plaintiff that the law says the plaintiff has not proven their case and my client must not be held liable or responsible? Does anybody on the jury panel feel this is unfair? Attorney-Client and Work-Product Privileges Page 13 of 14 Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 173

MISCELLANEOUS: 1. Some people make very important personal decisions with logic and reasoning. Other people make important personal decisions with their feelings and emotions. 2. How do you make very important personal decisions? 3. What is an example of important decisions you would make logically? 4. What is an example of important decisions you would make emotionally? Is there anyone on the panel that would consider themselves a strong environmentalist? 5. When I say strong environmentalist, what I m referring to is a person who donates time or money to an environmental cause, is a member of an environmental group, etc. Is there anyone on the panel that donates time or money to an environmental cause, is a member of an environmental group? 6. This next question is very personal and private. If you want to answer the question privately, just let me know and I m certain the judge will let us talk privately. My question is this, has anyone on the jury panel or any member of your family ever been convicted of a criminal offense? 7. Does anyone on the panel know the Judge or any of his staff? 8. Is there anyone on the panel who is actively involved in politics? CATCH - ALL 1. My final two questions are this: Is there anyone on the panel who is thinking to themselves, If Craig had just asked me this question, he would have learned something very important about me being a juror in this case? 2. Finally, is there anyone on the panel, for whatever reason that is starting out favoring the plaintiffs in this case? Attorney-Client and Work-Product Privileges Page 14 of 14 174 Construction Law Seminar September 2012

VOIR DIRE QUESTIONS in Metropolitan v. Hoy, et. al. FIRST ROUND OF QUESTIONING INTRODUCTION: Tell the jurors that this is a very big and a very important case but it also a very simple case. Do a SHORT summary of the case. This summary should take no more than 15 or 30 seconds. (For Example: This case is about holding a developer (Builder) responsible for the poor construction of a condominium project.) We are not trying to persuade but instead, trying to identify potentially bad jurors. Tell the panel that, Being a good citizen means serving on a jury. Being a good citizen also means that you should not serve on the jury if this is not the right case for you. If at anytime you feel this way, please just let us know. Tell the jurors there are no right or wrong answers to the questions you will be asking. All that you are asking of the jury is that they be honest and forthright in their answers. Do not tell the jurors that you are looking for 12,...fair and impartial jurors. This will condition the jurors to give the fair and impartial response rather than the honest response. Civ/vdq/Marconi.Met. v. Hoy, et.al. ATTORNEY-CLIENT AND WORK-PRODUCT PRIVILEGES Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 175

Let the jury know that sometimes, jurors want to talk privately about an answer to a question. Tell them if any juror would feel more comfortable sharing an answer in private, that person should simply let you know. Tell the jurors that it s been your experience that many jurors believe that if they don t talk, they won t be selected. Then tell the jurors that the folks who most often end up serving on the jury are the people who don t say much during the lawyer questioning. All we ask is that you share with us any opinion or reaction that you have to our questions. 1. [Pick a juror] [Juror s name], If a juror started this trial favoring the Defendants, that would not be fair, would you agree with me? [Juror s name], I am going to be talking about a number of issues in this case and if at any point you feel that you are favoring or leaning toward either of the Defendants, would you feel comfortable raising your hand and saying, Bob, I feel like I m favoring or leaning toward the Defendants in this case? [Go to another juror] [Juror s name], would you feel comfortable raising your hand and saying, Bob, I feel like I m favoring or leaning toward the Defendants in this case? [Ask the same question to a third juror]. Explain to the jurors that when lawyers refer to a juror having a prejudice or bias, that means a prejudgement or a leaning. Tell them that often jurors have prejudgements or opinions about issues in a case and there is absolutely nothing wrong with that, it just means that this is not the right case for them to serve as a juror. So, if anyone has a prejudgment or opinion about any of the issues, we need you to please let you know. Civ/vdq/Marconi.Met. v. Hoy, et.al. ATTORNEY-CLIENT AND WORK-PRODUCT PRIVILEGES 176 Construction Law Seminar September 2012

BURDEN OF PROOF: 1. In a civil case, the party bringing the case must prove their case by a preponderance of the evidence. Here is what that means: [Pick up a ream of paper] As you can see, I have a ream of paper in my right hand. Let s say we present this amount of evidence, and let s say the Developer (Builder) presents [pick up another ream of paper] this amount of evidence. If the amount of evidence is equal, we have not proven our case and we should lose. On the other hand, if we present ever a single sheet more of credible evidence [pick up a single sheet of paper and place on one of the reams] then the law says we have proven our case. Now let me ask you a few questions. [Pick a juror] [Juror s name], does that sound fair to you...that if we present even a single sheet more of credible evidence, then we have proven our case? 2. Is there anyone on the first row who feels that we should have to prove our case by more than a preponderance of evidence? [if no hands are raised, ask this question, Is there anyone who feels that for us to win this big and important case, we should have to prove our case by more than a slight tipping of the scales? ] 3. [If a juror on the first row raises their hand, thank them for their honesty] Who else agrees with [juror s name], that we should have to prove our case by more than a preponderance of the evidence? It s OK if you feel this way, but would you please raise your hand and let me know you feel this way. 4. In this case, we believe the evidence will show that the Developer s (Builder s) failure to properly construct this condominium project will cost our clients at least $5 Million in damages. There are some people who feel that if Plaintiffs are coming to court for 5 million dollars or more, they should have to prove their case by more than a slight tipping of the scales. [pick a juror] [Juror s name], What are your thought or feelings about this? 5. Who on the first row feels a Plaintiff should have to prove their case by more than a slight tipping of the scales? Who on the second feels that we should have to prove our case by more than a preponderance of evidence? Third row, etc. Civ/vdq/Marconi.Met. v. Hoy, et.al. ATTORNEY-CLIENT AND WORK-PRODUCT PRIVILEGES Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 177

CONNECTIONS WITH REAL ESTATE DEVELOPMENT: 1. Has anyone on the jury panel ever worked in commercial or residential real estate development? If Yes, a. Whom did you work for and for how long? b. What was your job? c. Why did you leave? d. Overall, was that job a positive or negative experience for you? 2. Has anyone on the jury panel had a family member or close friend who worked in commercial or residential real estate development? If Yes, a. Who worked in the construction industry and for how long? b. What was this person s job? c. Why did this person leave that job? CONNECTIONS WITH CONSTRUCTION INDUSTRY: 1. Has anyone on the jury panel ever worked in the construction industry? If Yes, a. Whom did you work for and for how long? b. What was your job? c. Why did you leave? d. Overall, was that job a positive or negative experience for you? 2. Has anyone on the jury panel had a family member or close friend who worked in the construction industry? If Yes, a. Who worked in the construction industry and for how long? b. What was this person s job? c. Why did this person leave that job? Civ/vdq/Marconi.Met. v. Hoy, et.al. ATTORNEY-CLIENT AND WORK-PRODUCT PRIVILEGES 178 Construction Law Seminar September 2012

EXPERIENCE WITH HOY RELATED ENTITLES: (ELIMINATION) 1. Has anyone on the jury panel ever heard of or worked for David Hoy or MHI Real Estate? 2. Mr. Hoy has a number of companies, including the development and construction of residential (and commercial?) properties. Has anyone on the jury panel ever done business with or lived at a Hoy developed or constructed property? [If a juror answers in the affirmative, ask if that experience would cause the juror to start this trial favoring Mr. Hoy.] HOY AS AN EXCELLENT WITNESS: (CONDITIONING): 1. I want to be the first person to tell you that Mr. Hoy will come across as a very nice person. When you first hear Mr. Hoy, some jurors will think that he is the best witness they have ever seen. [Pick a juror] [Juror s name] We are going to call Mr. Hoy as a witness. If you think he is a nice person, are you the kind of person that would find in favor of Mr. Hoy, even if the evidence showed he and his companies are responsible for the problems the homeowners are having with their condominiums? 2. Is there anyone on the jury panel that is the kind of person that would find in favor of Mr. Hoy, even if the evidence showed he and his companies are responsible for the problems the homeowners are having with their condominiums? 3. Many of us have had an experience where a very nice person did something bad and was held responsible. Best example might be a car accident. [Pick a juror] [Juror s name] If a very nice person was the cause of a serious accident, should the nice person still be held accountable and responsible? 4. Is there anyone on the jury panel that disagrees with this? 5. Here is what I am going to ask of everyone who serves on this jury - if you find yourself liking Mr. Hoy or feeling sorry for him, will you be willing to judge Mr. Hoy by his deeds and not his smooth words? Civ/vdq/Marconi.Met. v. Hoy, et.al. ATTORNEY-CLIENT AND WORK-PRODUCT PRIVILEGES Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 179

TORT REFORM:(ELIMINATION) 1. Is any one on the jury panel a member of CALA (Citizens Against Lawsuit Abuse or any other group or organization that favors limiting the amount of money a plaintiff is entitled to recover in a lawsuit? 2. I think everyone on the jury has heard or read about tort reform which involves limiting the amount of money that a jury can award. How many members of the panel agree with tort reform and feel that the amount of money that a jury can award in a case should be limited? 3. [Ask each juror] Generally speaking, how strongly do you agree or disagree with limiting the amount of money that a jury can award in a case: strongly agree, agree, disagree or strongly disagree with limiting the amount of money that a jury can award. DAMAGES - REPAIRS (ELIMINATION) 1. One of the key issues in this case is going to be the amount of money it will cost to fix the condominium. The developer (builder) want to literally put a patch on the problems. The homeowners want their homes to be fully and completely repaired. [Pick a juror] [Juror s name], some jurors feel that the cost of patching a problem is all that a homeowner should be entitled to. What are your thoughts or feelings about this? 2. Who on the first row feels that the developer (builder) should only be required to pay the cost of patching the problem? 3. Is there anyone on the jury panel who feels that the developer (builder) should only be required to pay the cost of patching the problem? 4. [Pick a juror] [Juror s name], if your home had been poorly constructed, would you want the patch or the full and complete repair? Why? 5. Is there anyone on the jury panel who would feel it would be sufficient if the developer (builder) just paid for the patch and not the full and complete repair? Civ/vdq/Marconi.Met. v. Hoy, et.al. ATTORNEY-CLIENT AND WORK-PRODUCT PRIVILEGES 180 Construction Law Seminar September 2012

DAMAGES - LOSS OF USE AND ENJOYMENT: (ELIMINATION) 1. Some people feel punitive damages are not proper. How many members of the panel agree with this view that punitive damages are not a proper way to punish a company? 2. I know that some jurors feel that millions of dollars for the Plaintiffs loss of use and enjoyment of their home is not appropriate, even if supported by the evidence. [Pick a juror] [Juror s name], do you feel that millions of dollars for the loss of use and enjoyment of their home is not appropriate, even if supported by the evidence? 3. Does anyone on the panel feel this way? 4. Let me ask this question another way: [Ask each juror] How comfortable would you feel awarding millions of dollars to the plaintiffs for their loss of use and enjoyment of their home, if supported by the evidence: very comfortable, comfortable, somewhat comfortable, uncomfortable or very uncomfortable? INDIVIDUAL QUESTIONING OF THE JURORS BASED ON THE ANSWERS GIVEN IN THEIR QUESTIONNAIRE: BOB, AT THIS POINT, I NOW WANT YOU TO ASK QUESTIONS TO CERTAIN MEMBERS OF THE JURY PANEL BASED ON ANSWERS THEY GAVE IN THEIR JUROR QUESTIONNAIRE, IF WE GET A QUESTIONNAIRE. FAVORING THE HOMEOWNERS OVER THE COMPANIES: (CONDITIONING) 1. The law says that you can not start a trial favoring the individuals bringing this case over the companies that have been sued. You must start the parties out on even footing. Will everyone on the jury panel assure the defense lawyers that you will not start this trial favoring the individuals over the companies that are being sued? Civ/vdq/Marconi.Met. v. Hoy, et.al. ATTORNEY-CLIENT AND WORK-PRODUCT PRIVILEGES Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 181

SYMPATHY: (CONDITIONING) 1. The law also says that you can not decide who should win the case based on sympathy. I want to make sure that there is no one on the panel who would decide this case based on sympathy. Will everyone on the jury panel assure the defense lawyers that you will not decide this case based on sympathy? ROUND 2 DEVELOPER (BUILDER) RESPONSIBILITY: (EDUCATION) 1. [Ask each juror the following question] On a scale of 1 to 10, with 1 being very positive, 5 being neutral and 10 being very negative, what is your general opinion of real estate developers (builders)? 2. What duty or responsibility does a real estate developer (builder) have on the construction project? 3. [Pick a juror] [Juror s name], do you agree that the real estate developer (builder) takes credit when a project is built well and should take responsibility when a project is built poorly? 4. Is there anyone on the panel that feels the real estate developer (builder) does not have to take responsibility when a project is built poorly? 5. If there is a problem with the construction of a condominium project, should the real estate developer (builder) be held responsible? 6. Is there anyone on the jury panel who feels that the real estate developer (builder) should not be held responsible if there is a problem with the construction of a condominium project? Civ/vdq/Marconi.Met. v. Hoy, et.al. ATTORNEY-CLIENT AND WORK-PRODUCT PRIVILEGES 182 Construction Law Seminar September 2012

WATER INTRUSION IN A HOME: (EDUCATION) 1. Does anyone on the jury panel know what the purpose of flashing is? 2. One way that water gets trapped inside the walls of a home is from windows or window frames that leak. Is there anyone on the jury panel who has ever had windows or window frames that leak? 3. If water gets trapped inside the walls of a new home, considerable damage can occur. Should the developer be held responsible if this happens? Why? 4. Is there anyone who feels that the developer (builder) does not have any responsibility in that situation? 5. Who else agrees and feels that the developer (builder) should not be held responsible if water gets inside the walls of a new home? 6. Even if the law said that the developer (builder) was responsible, would it be fair to say that you would disagree with this law? 7. So, this would be an issue that you would start out with a prejudgment or leaning, what lawyers refer to as a bias or prejudice, would you agree with me? [If juror says Yes, thank him/her, tell him/her that you may talk some more about this later. Then, find out who else on the panel feels the same way as that juror.] Civ/vdq/Marconi.Met. v. Hoy, et.al. ATTORNEY-CLIENT AND WORK-PRODUCT PRIVILEGES Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 183

THIRD PARTY BENEFICIARY (EXPLAINS WHY WE SUE THE BUILDER IF HOY ENTITIES ARE OUT OF THE CASE): 1. Has anyone on the jury panel ever heard of the term, Third Party Beneficiary? [if any juror has heard of the term, ask them:] What do you understand this term to mean? 2. Third Party Beneficiary means that 2 parties have a contract that benefits a third party. The law in Washington allows a third party beneficiary to sue even though they were not a direct party to the contract. [pick a juror] [Juror s name], do you agree or disagree with this law? 3. Does anyone on the jury panel feel uncomfortable or just disagrees with this law? BROKEN WRITTEN CONTRACTS: (ELIMINATION) 1. Has anyone on the jury panel ever been accused of breaking a written promise or contract? [If any juror says yes] Tell me about that situation. Do you think that experience would cause you to start this trial leaning or favoring the Defendant in this case? 2. If a developer (builder) [if objected to because it commits jurors to the facts of this case, then use the word company] makes a promise in writing and fails to live up to the agreement, [pick a juror] [Juror s name], do you feel that developer (builder) [company] should be held responsible? Why? 3. Who feels that the developer (builder) [company] should not be held responsible if they break a written contract? Civ/vdq/Marconi.Met. v. Hoy, et.al. ATTORNEY-CLIENT AND WORK-PRODUCT PRIVILEGES 184 Construction Law Seminar September 2012

MISREPRESENTATION: (EDUCATION) 1. Has anyone on the jury panel had an experience where a company told you one thing but did something else? 2. [Ask each juror] How important is it to you that a developer (builder) of condominiums tell the truth about the quality of construction: very important important somewhat important not important 3. If a developer (builder) intentionally misrepresents important facts about the construction of condominiums to homeowners, should they be held accountable for their actions? 4. Does anyone on the jury panel feel that if a developer (builder) is deceptive or makes intentional misrepresentations about important facts to people who buy the condominiums should not be held accountable for their actions? MISCELLANEOUS: (ELIMINATION) 1. The lawyers and law firms representing the Hoy companies (builders) are [names of lawyers and law firms]. Does anyone on the jury panel know any of these lawyers or law firms? Has anyone or any of your family members ever hired any of these lawyers or their law firms? [If any juror says Yes, ask if that relationship would cause you to start this trial favoring the Defendant]. 2. Does anyone know someone else on the jury panel? 3. From what you have heard so far about this case, is there anyone who would start the trial favoring the Developer (builder), even if only slightly? 4. Is there anyone sitting out there right now thinking to themselves, from what I ve heard so far, I m already leaning towards, or favoring, the developer (builder)? Civ/vdq/Marconi.Met. v. Hoy, et.al. ATTORNEY-CLIENT AND WORK-PRODUCT PRIVILEGES Choose Your Audience Wisely: Effective Techniques for Voir Dire Hirschhorn 185

CONCLUSION: (CONDITIONING) 1. The issues in this case are going to boil down to this: 1. Is the developer (builder) responsible for the damage at the Metropolitan Condominiums? We believe the answer is YES, but will everyone on the jury panel wait until you hear all the evidence before deciding this case? 2. The second issue is whether all of the Hoy owned companies are responsible as the developer. Again, we believe the answer is YES, but will everyone on the jury panel wait until you hear all the evidence before deciding this case? 3. The third issue is, what amount of money are the homeowners entitled to for the following: repairs to their home; their loss of comfort of their home; and, their loss of enjoyment during the 12 months that the repair construction will take. We strongly believe that Plaintiffs are entitled to millions of dollars to compensate them, but will everyone on the jury panel wait until you hear all the evidence before deciding this case? Civ/vdq/Marconi.Met. v. Hoy, et.al. ATTORNEY-CLIENT AND WORK-PRODUCT PRIVILEGES 186 Construction Law Seminar September 2012

Latest Developments in CGL Coverage for Construction Defects (2012 Update) 1 Lee H. Shidlofsky Shidlofsky Law Firm PLLC 7200 North Mopac Expressway, Suite 430 Austin, TX 78731 (512) 685-1400 (866) 232-8709 [fax] lee@shidlofskylaw.com

Lee H. Shidlofsky is a founding member of Shidlofsky Law Firm PLLC, where he heads up the Insurance Law Practice Group. The Insurance Law Practice Group represents corporate policyholders that are in disputes with their insurance companies, provides advice to plaintiffs in complex litigation on how to best maximize an insurance recovery, and provides risk-management consultation in connection with contractual risk transfer issues. The Insurance Law Practice Group has handled a wide variety of first-party and third-party insurance claims (e.g., D&O, E&O, personal and advertising injury liability, construction defect, commercial property, business interruption, pollution, and commercial auto) in state and federal courts at both the trial and appellate court levels. Mr. Shidlofsky has been named a Super Lawyer by Texas Monthly Magazine since 2004, including a ranking as a Top 50 attorney in the Central and West Texas Region since 2007. He also is ranked as a top insurance coverage lawyer by Best Lawyers in America, Chambers USA and Who s Who Legal. Lee is a Fellow of the Texas Bar Foundation and a member of the College of the State Bar of Texas.

Latest Developments in CGL Coverage for Construction Defects (2012 Update) Table of Contents I. Introduction...191 II. Interpreting a CGL Policy...191 III. The CGL Insuring Agreement...192 A. Legally Obligated...193 B. Because Of...194 IV. The Occurrence Requirement...194 A. Historical Development Exclusion (a)...195 B. Occurrence and Bodily Injury...195 C. Occurrence and Property Damage...195 V. Trigger...196 A. The Manifestation Trigger...197 B. The Exposure Trigger...197 C. The Actual Injury or Injury-in-Fact Trigger...197 D. Continuous Trigger...198 VI. The Property Damage Requirement...198 A. Physical Injury to Tangible Property and Loss of Use of Tangible Property...198 B. Economic Loss and Consequential Damages...200 VII. The Historical Development of the CGL Forms and Coverage for Defective Work...200 A. Business Risk and Revisions of the Forms...200 B. CGL Coverage vs. Performance Bonds...201 VIII. Exclusions...203 A. Expected or Intended Injury...203 B. Contractual Liability Exclusion (and Coverage)...203 C. Owned Property and Alienated Premises Exclusions...204 D. Care, Custody, or Control Personal Property...205 E. Exclusions for Ongoing Operations and Incorrect Work...206 F. The Your-Work Exclusion and the Subcontractor Exception...207 G. Impaired Property Exclusion...209 H. Product Recall (Sistership) Exclusion...211 IX. Common Construction-Related Endorsements to a CGL Policy...212 A. Professional Liability...212 B. Habitational Exclusionary Endorsements...212 C. Other Specific Exclusionary Endorsements...212 X. Standard Conditions of the CGL Policy...213 A. Notice...213 B. Cooperation...214 C. Voluntary Payments/Settlement Without Consent...214 Endnotes...215 Latest Developments in CGL Coverage for Construction Defects (2012 Update) Shidlofsky 189

Latest Developments in CGL Coverage for Construction Defects (2012 Update) I. Introduction Modern construction remains a dangerous business even as construction means and methods have changed and improved over time. Claims arising from bodily injury (both to workers on the jobsite and others) and property damage on and off the jobsite are common, and even the most carefully planned and monitored projects can experience accidents. Commercial general liability (CGL) insurance is the dominant form of liability coverage applicable to such claims. However, CGL coverage is not a construction-specific product. Although some of the standard CGL exclusions are most often raised in the construction context, the basic CGL forms have been drafted broadly to apply to commercial endeavors of all types. Also, CGL coverage may overlap with coverages that are construction-specific products. For example, property damage to the project during the course of construction is typically covered by builders risk insurance, which is first-party insurance. Design professionals involved in a project (including architects, engineers, and design builders contractors) likely maintain professional liability coverage. Disputes can arise as to whether a property damage claim arising from construction work implicates CGL coverage, builders risk coverage, professional liability coverage, a combination, or none of these. Disputes also arise as to whether a particular loss should be covered by insurance or by a performance bond. For these reasons, and others, construction-related claims frequently lead to coverage disputes under CGL policies, and such disputes can be complex and costly to resolve. This paper discusses how CGL insurance applies to third-party property damage and bodily injury claims that arise either during the course of construction or after construction operations have been completed. The most frequently disputed CGL coverage issue in the construction context is coverage for defective work and resultant damage. Since builders risk policies generally exclude coverage for defective work and design, owners, developers, and contractors may look to the CGL policy for coverage in connection with such claims. However, insurers often take the position that such claims are business risks expressly excluded by CGL coverage, and/or that such claims arise from factors under the control of the insured and therefore fall outside the scope of CGL coverage. Disputes also arise as to whether certain types of damage alleged in such claims fall within the scope of property damage as defined by CGL policies. Oftentimes, and despite the fact that the language is standard, the outcome of these issues may be dependent on which state s law applies to the interpretation of the CGL policy. The uncertainty from state to state is troubling for insureds and makes a choice of law analysis very important. In any case, the major coverage issues over CGL coverage for construction defects are a particular focus of this paper. II. Interpreting a CGL Policy Standard rules of contract interpretation apply to CGL policies, whether written for construction operations or any other commercial venture. These rules include principles applied specifically in the context of insurance coverage disputes e.g., that policies must be read as a whole, that all parts of a policy must be given effect, that policy language is to be given its plain and ordinary meaning, and that extrinsic evidence is allowed only where policy language is ambiguous. 2 The standard CGL policy contains a broad insuring agreement that grants coverage for all sums the insured is legally obligated to pay as damages because of bodily injury or property damage caused by an occurrence. Bodily injury, property damage, and occurrence are defined terms, and nearly all CGL policies employ identical or substantially similar definitions of those terms. Latest Developments in CGL Coverage for Construction Defects (2012 Update) Shidlofsky 191

Although the insuring agreement is a very broad grant of coverage, the policy then shifts certain risks back to the insured through exclusions. 3 Exclusions intended to clarify that CGL coverage does not apply to bodily injury covered by other specific types of insurance (most notably auto and workers compensation) are often raised in the construction context. The CGL exclusions, however, that garner the most attention in the construction context are those that specifically address property damage claims, often referred to as the business risk exclusions. The evolution of these exclusions and their exceptions is essential to the overall analysis of CGL coverage for construction-related claims. CGL coverage for construction-related property damage should turn on the applicability of these exclusions, rather than the broad insuring agreement and accompanying definitions. That being said, much of the litigation over the past several years has been focused on the insuring agreement and, in particular, whether defective work can constitute property damage caused by an occurrence. This debate has morphed into a battle between tort versus contract damages and whether a CGL policy only exists to respond to tort-based damages. The structure of the CGL policy as described above dictates the manner and order in which the parts of the CGL policy should be read and interpreted. Conceptually, a CGL policy should be read in the following order: Declarations (including, e.g., supplementary schedules of insureds, coverages, sublimits, covered locations, and the schedule of policy forms) Insuring agreements Definitions Exclusions Conditions Endorsements 4 This paper separately addresses the major component parts of a CGL policy in the context of construction-related claims. III. The CGL Insuring Agreement An analysis of coverage under any insurance policy, including a CGL policy, begins with the insuring agreement. The insuring agreement sets forth the scope of coverage to be provided without regard to exclusions and conditions. As noted above, the insuring agreement of CGL policies is broad. The Coverage A insuring agreement of a standard CGL policy 5 applies to bodily injury and property damage liability. 6 It provides, in part: We will pay those sums that the insured becomes legally obligated to pay as damages because of bodily injury or property damage to which this insurance applies. * * * This insurance applies to bodily injury and property damage only if: (1) The property damage is caused by an occurrence that takes place in the coverage territory ; [and] (2) The bodily injury or property damage occurs during the policy period. Although the insuring agreement contains other provisions that apply to the scope and duration of the coverage, it is the first sentence that frames the broad scope of coverage. It states the policy covers all sums the insured becomes legally obligated to pay as damages... to which the insurance applies that is, bodily 192 Construction Law Seminar September 2012

injury or property damage that takes place during the policy period and is caused by an occurrence. The component parts of the CGL insuring agreement each have their own legal significance. The remainder of this subsection addresses two terms in the first sentence of the insuring agreement: legally obligated and because of. Separate subsections are devoted to the occurrence requirement and the scope of the term property damage. A. Legally Obligated As noted above, the insuring agreement applies to sums the insured becomes legally obligated to pay as damages. The satisfaction of the legally obligated requirement can be a source of disagreement between insureds and insurers. One issue is whether damages for breach of contract in the absence of a judgment give rise to the kind of legal obligation to pay contemplated by the insuring agreement. The issue is particularly significant in the construction context, where contractual relationships usually govern every facet of a project. One of the leading cases for the proposition that liability for breach of contract does not satisfy the legally obligated requirement in the CGL insuring agreement is Data Specialties, Inc. v. Transcontinental Insurance Co., 7 a case in which the insured electrical contractor sought coverage for damage to the electrical system that exploded while the insured was in the course of repairing it. The court held that, in the absence of a judgment against it, the insured was not legally obligated to pay the damages. The court relied primarily upon California precedent, which was subsequently overruled and discredited by the California Supreme Court in Vandenberg v. Centennial Insurance Co. 8 In Vandenberg, the California Supreme Court expressly held that the phrase legally obligated to pay as damages in the CGL insuring agreement should be given its plain and ordinary meaning, and not one drawing an overly formal distinction between tort and contractual liability. 9 Nevertheless, other courts have adhered to the tort-versus-contract distinction. A recent example is McDonald Construction Company, Inc. v. Bituminous Casualty Corp., 10 in which the court held that the cost of replacing floor tiles pursuant to the insured s contractual obligation was not covered under its CGL policy because the cost arose from a pre-existing contractual obligation and not a tort claim for damage to the tiles. Therefore, the contractor was not legally obligated to replace the tiles. Other cases reaching similar results include Detroit Water Team Joint Venture v. Agricultural Ins. Co. 11 and Ohio Casualty Ins. Co. v. Time Warner Entertainment Co., L.P., 12 both of which stand for the proposition that a legal obligation under the insuring agreement of the CGL agreement must be established by judgment or settlement. 13 Other courts have held that liability arising out of breach of contract can give rise to damages for which the insured is legally obligated. In Wanzek Construction, Inc. v. Employers Insurance of Wausau, 14 the court determined that the cost of repairing defective coping stone on a swimming pool project was within the apparent contractual obligation of the insured contractor to repair or pay for property damage to the project. The court found that nothing in the CGL insuring agreement suggested a lawsuit was necessary to trigger coverage. Likewise, in Venture Encoding Service, Inc. v. Atlantic Mutual, 15 the insured printer was obligated under the terms of its contract to remedy and correct any mistakes or errors in its printing services and was legally obligated to pay those expenses within the terms of its liability policy. For further examples, see Potomac Insurance of Illinois v. Huang 16 (filing of a third-party lawsuit or a judgment against the insured was not necessary to establish the insured builder s legal obligation to repair leaking windows) and Lennar Corp. v. Great American Insurance Co. 17 (recognizing insured builder s legal obligation to pay the cost to repair a defective exterior insulation finishing system (EIFS), and that a judgment is not the only manner by which an insured can become legally obligated to pay because a legal obligation can be imposed by law, pursuant to a judgment, settlement, contract, or statute). The tort-versus-contract limitation placed upon the legally obligated requirement in the CGL insuring agreement has been rejected by some courts on the basis that it lacks sup- Latest Developments in CGL Coverage for Construction Defects (2012 Update) Shidlofsky 193

port in the language of the policy itself. Early commentary from the insurance industry itself as to the legally obligated requirement indicates that the coverage grant is broad enough to include the insured s legal obligation to pay damages for breach of contract as well as for tort, subject to other limitations of the policy, including the definitions of property damage and occurrence and the exclusions. 18 As will be discussed, even if some courts do not rely on the legally obligated to pay provision, the occurrence requirement also is fertile ground for the contract versus tort debate. 19 B. Because Of Another key part of the CGL insuring agreement is the provision stating the insurer will pay damages the insured is legally obligated to pay because of bodily injury or property damage to which the insurance applies. The because of formulation has been found to be a basis for insureds to recover the costs to repair property damage (defined, in part, as physical injury to tangible property ) to the project and other consequential damages. A case that extensively discusses this issue is Lennar Corp. v. Great American Insurance Co., 20 in which the insured homebuilder sought coverage for the cost to repair water damage to hundreds of homes due to defectively installed EIFS. The court determined that the damage to the homes arising out of the water infiltration through the defective EIFS caused property damage, and the costs of repairs were damages incurred because of that property damage within the insuring agreement of the insured s CGL policies. However, the court held that the costs to remove EIFS on otherwise undamaged homes as a preventive measure were not covered because they did not constitute damages paid by the insured because of property damage. These issues relating to the definition of property damage are discussed more fully below. If damages because of property damage are broader than property damage itself, then there is a basis for recovery of consequential damages so long as those damages were caused by property damage. A leading case for this proposition is American Home Assurance Co. v. Libbey-Owens Ford Co., 21 which involved a claim against the manufacturer of window glass where the alleged damages included the windows themselves. The court held that consequential losses stemming from physical injury to the windows were covered, even though there may not have been coverage for the repair and replacement of the windows themselves. The court remanded the case to the trial court to determine which of the claimed consequential damages, including increased administrative and heating/cooling costs and lost rentals were due to the breakage of the insured s windows. For instances in which delay damages have also been awarded as damages because of property damage, see Riley Stoker Corp. v. Fidelity & Guaranty Insurance Underwriters, Inc. 22 (upholding coverage for delay damages because of explosions and mechanical problems in connection with construction of two coal-fired steam generators) and Insurance Company of North America v. Aberdeen Insurance Services, Inc. 23 (upholding coverage for liquidated damages assessed because of damage to pipeline caused by insured s subcontractor). Courts uphold coverage in these cases pursuant to the insuring agreement of the policy as damages because of property damage, within the definition of that term in the policy. The because of language is key to recovering what would otherwise be denied as pure economic loss. IV. The Occurrence Requirement One of the key requirements for coverage under a CGL policy is that the bodily injury or property damage be caused by an occurrence. Occurrence is defined in the policy as an accident, including continuous or repeated exposure to substantially the same general harmful conditions. The definition of occurrence is where the CGL directly incorporates the requirement of fortuity, which is part and parcel of the basic tenet of insurance that an insured should not be able to control the risk and obtain insurance coverage for intentional acts. 194 Construction Law Seminar September 2012

A. Historical Development Exclusion (a) The CGL forms moved from a strict accident formulation to an occurrence basis in 1966. At that time, the term occurrence was defined as an accident, including injurious exposure to conditions, which results, during the policy period, in bodily injury or property damage neither expected or intended from the of the standpoint of the insured. That definition, without change, was maintained in the 1973 revisions to the CGL policy form. In 1986, the definition of occurrence was added in its present iteration, and the neither expected or intended language was moved to an exclusion a. The exclusion states that the insurance does not apply to bodily injury or property damage expected or intended from the standpoint of the insured. The current definition of occurrence, together with exclusion a, tracks the 1973 definition in which the neither expected nor intended from the standpoint of the insured requirement was incorporated within the definition of occurrence. In practical terms, issues relating to the fortuity of bodily injury or property damage arising out of construction risks are usually determined by reference to the occurrence requirement. Exclusion a, if addressed at all, is usually relegated to tag-along status. B. Occurrence and Bodily Injury Claims involving bodily injury do not often involve disputes regarding the existence of an occurrence. Usually, it is undisputed that a bodily injury suffered in the course of construction work is accidental. King vs. Dallas Fire Insurance Co. 24 is illustrative. In King, the court upheld coverage for an insured employer under its CGL policy for its derivative liability for the intentional acts of its employee in assaulting another worker on a construction jobsite. Although there was no occurrence as to the assaulting employee (who, as an employee, qualified as an insured under the policy), there was an occurrence for purposes of the employer s coverage under the policy. The insurer argued that because the assaulting employee acted intentionally, the injuries were reasonably foreseeable, and there was no occurrence. The court rejected this argument, holding that the allegations of negligent hiring, training, and supervision were to be evaluated from the standpoint of the employer, and that these unintentional acts were an occurrence under the CGL policy, regardless of whether the employee acted intentionally. The court focused on the separation-of-insureds clause in the policy, and held that the occurrence requirement must be analyzed from the standpoint of the insured. 25 C. Occurrence and Property Damage The issue of whether a contractor s defective work arises out of an occurrence has been hotly disputed throughout the United States. 26 Although opinions are diverse, the holdings generally break down into two opposing views: [O]ne line of cases has held that faulty or improper construction does not constitute an accident; rather, the damage is the natural and ordinary consequence of the insured s act. The other line of cases has held that improper or faulty construction does constitute an accident as long as the resulting damage is an event that occurs without the insured s expectation or foresight. 27 The trend in the case law favors coverage, based on the view that inadvertent construction defects resulting in property damage may constitute an occurrence. A recent example, and one addressing the most common issues raised by CGL insurers, is the Supreme Court of Texas opinion in Lamar Homes, Inc. v. Mid-Continent Casualty Co. 28 Lamar Homes involved a suit against an insured homebuilder arising out of a subcontractor s defective work. 29 The builder s CGL insurer denied coverage on the ground that faulty workmanship is not an occurrence, and that to find otherwise would transform the CGL policy into a performance bond. 30 The case was certified by the Fifth Circuit to Latest Developments in CGL Coverage for Construction Defects (2012 Update) Shidlofsky 195

the Supreme Court of Texas, which recognized that not every case of faulty workmanship will result in coverage. 31 The court noted situations where faulty workmanship is intentional from the viewpoint of the insured, and where faulty workmanship merely diminishes the value of the damaged project without causing physical injury. 32 The court also observed that some faulty workmanship claims would be excluded under specific business-risk exclusions. However, the court also reviewed the evolution of the CGL policy and reached the conclusion that the subcontractor exception to the your work exclusion was a purposeful addition to the CGL policy that has to be given effect. 33 Likewise, the court rejected any contract versus tort distinction for determining whether the occurrence requirement is satisfied. 34 Similarly, the court rejected foreseeability as the boundary between accidental and intentional conduct. 35 Following Lamar Homes, the Florida Supreme Court addressed a case involving an insured general contractor s claim for damage to completed homes caused by its subcontractors use of poor soil and improper soil compaction and testing. 36 The insurer argued that a subcontractor s faulty workmanship causing damage to the insured contractor s own work can never be an occurrence because it results in reasonably foreseeable damages. 37 The court, focusing on the evolution of CGL policy forms, rejected that analysis and instead found that the defective workmanship of a subcontractor can constitute an occurrence under a general contractor s CGL policy. 38 The court also rejected the insurer s contention that construing the term occurrence to include a subcontractor s defective work converts a CGL policy into a performance bond. 39 These cases are two illustrations of a recent trend of state courts finding that physical damage resulting from inadvertent construction defects constitutes an occurrence under a CGL policy. The supreme courts of Mississippi, 40 South Carolina, 41 Tennessee, 42 Kansas, 43 Wisconsin, 44 and Indiana 45 also have issued opinions concluding that claims against an insured contractor satisfy the occurrence requirement. Recent decisions from other states, including Arkansas, 46 Pennsylvania, 47 Hawaii, 48 and Kentucky, 49 are examples of the opposing view. 50 Even if the view that defective workmanship resulting in property damage can arise from an occurrence becomes universal, courts may continue to decide the issue differently in given cases based on their facts. 51 And, some courts have adopted a middle ground approach whereby defective work is only an occurrence if it damages otherwise non-defective work. 52 Obviously, the cited cases are only a small sampling as this issue has been the subject of much litigation across the country. 53 Also, in response to what has been perceived as bad case law, some states (e.g., Arkansas, Hawaii, South Carolina and Colorado) have passed legislation that specifically addresses the occurrence issue. While the statutes vary slightly, each attempts to legislatively define what constitutes an occurrence. It will be interesting to see if legislative interventions become a trend in the insurance coverage world. V. Trigger The concept of trigger that is, when property damage or bodily injury occurs so as to implicate coverage is one of the thorniest concepts in CGL coverage. When bodily injury or property damage corresponds with a so-called boom event, it is relatively easy to determine which policy must respond to the loss. Construction losses, however, often involve latent damage or progressive damage that occurs over a period of time. When such damage occurs, it spawns complex disputes among insurers and between insureds and insurers as to when the damage occurred and which policy or policies must respond. The dispute centers around the fact that most CGL policies are written on an occurrence basis. In occurrence-based policies, the insuring agreement specifically requires that the bodily injury or property damage take place during the policy period. This is in contrast with claims-made policies, under which it is the claim that must be made during the policy period, even if the particular act or omission that caused the damage happened prior to the policy period. 54 196 Construction Law Seminar September 2012

Because CGL policies provide coverage for property damage or bodily injury that occurs during the policy period, when the work was performed is not usually relevant. Thus, it is the timing of the resulting injury or damage (rather than the timing of the occurrence) that determines which policy or policies must respond to a particular loss. The trigger analysis for occurrence-based policies has spawned many different approaches: (1) the manifestation trigger, (2) the exposure trigger, (3) the actual injury or injury-infact trigger, and (4) the continuous trigger. 55 Trigger battles were commonplace in environmental coverage litigation and other types of long-tail claims (most notably, asbestos-related claims), and the issue is also fertile ground for litigation in the construction defect arena. The trigger theory applied to a particular set of facts can have a significant impact on how much coverage is available to respond to a claim. Before summarizing the different trigger theories, it is important to note that different states follow different theories, and in some situations, the same state may apply a different theory depending on the type of injury (e.g., bodily injury versus property damage) or the nature of the policy (e.g., first-party versus third-party coverage). Further, even when a state s high court has issued an opinion adopting a particular trigger theory, it must be remembered that the labels are somewhat malleable in nature. It is not uncommon for a court to apply a trigger theory so as to fit a particular set of facts. 56 A. The Manifestation Trigger A manifestation trigger analysis considers damage to have occurred when it becomes apparent or readily identifiable. Although the manifestation trigger may have some advantages when it comes to ease of application, it is not widely followed in connection with liability coverage. 57 Courts generally hold that it is not grounded in the policy language. 58 Even when a jurisdiction appears to have adopted a manifestation trigger, a marked difference may exist as to how one court applies it versus another. 59 B. The Exposure Trigger Under an exposure trigger, coverage is triggered at the time of the exposure to the conditions that cause the damage. Although the exposure trigger been applied with some frequency in bodily injury cases, especially in the asbestos context, it has not been widely followed in property damage cases. 60 As with the manifestation trigger, an exposure trigger suffers from textual problems when applied to the policy language because a CGL policy does not state the coverage applies if property is, during the policy period, exposed to a process, event, or substance that later results in bodily injury or physical injury to tangible property. 61 However, in practice, the nominal application of an exposure trigger often does not differ much from application of an actual injury or injury-in-fact trigger. 62 C. The Actual Injury or Injury-in-Fact Trigger The actual injury or injury-in-fact trigger, as the name implies, attempts to match the policy with the time period when the damage actually occurs. In contrast to a manifestation trigger, no requirement exists that the damage become manifest or apparent during the policy period only that damage actually occurs during the policy period. This has led to some criticism over the sometimes difficult task of determining when property damage actually occurs. However, as one court noted, [p]inpointing the moment of injury retrospectively is sometimes difficult, but we cannot exalt ease of proof or administrative convenience over faithfulness to the policy language; our confined task is to review the contract, not to revise it. 63 Perhaps because the actual injury or injury-in-fact trigger most closely tracks the policy language, it has gained traction as the proper trigger theory to be applied in determining CGL coverage for progressive property damage claims. 64 Latest Developments in CGL Coverage for Construction Defects (2012 Update) Shidlofsky 197

D. Continuous Trigger A so-called continuous trigger, although sometimes applied differently by different courts, generally provides that bodily injury and property damage that are continuous in nature are covered by all policies in effect during the time the damage takes place. Neither the date of the negligent act nor the discovery of the damage or injury is particularly relevant in applying a continuous trigger theory. Perhaps the most widely cited case supporting a continuous trigger theory albeit not in the construction defect arena is Keene Corp. v. Insurance Company of North America. 65 The continuous trigger is often applied in construction defect cases. 66 The tendency of courts to apply the continuous or multiple trigger led to a revision of the CGL policy form in 2001 to require that bodily injury or property damage must not have been known to the insured prior to the inception of the policy period. That provision, located in the insuring agreement, states as follows: Prior to the policy period, no insured listed under Paragraph 1. of Section II Who is An Insured and no employee authorized by you to give or receive notice of an occurrence or claim, knew that the bodily injury or property damage had occurred, in whole or in part. If such a listed insured or authorized employee knew, prior to the policy period, that the bodily injury or property damage occurred, then any continuation, change or resumption of such bodily injury or property damage during or after the policy period will be deemed to have been known prior to the policy period. The provision goes on to set out criteria as to the means whereby bodily injury or property damage will be deemed to have been known by the insured to have occurred, including the earliest time when the insured reports the bodily injury or property damage, receives a written or verbal demand or claim for damages, or becomes aware by any other means that bodily injury or property damage has occurred. The provision is an attempt to isolate a loss in a single policy once it becomes known. VI. The Property Damage Requirement The concept of property damage is central to CGL insurance coverage for construction risks. As construction lawyers are aware, problems in a construction project do not only result in damage to the project or the property of third parties, but also economic losses that go beyond the value of damaged property itself. As discussed below, it is with respect to economic losses that disputes regarding the definition of property damage most often occur. The standard CGL policy defines property damage as: a) Physical injury to tangible property, including all resulting loss of use of that property. All such loss of use shall be deemed to occur at the time of the physical injury that caused it; or b) Loss of use of tangible property that is not physically injured. All such loss of use shall be deemed to occur at the time of the occurrence that caused it. A. Physical Injury to Tangible Property and Loss of Use of Tangible Property In 1973, the insurance industry revised the definition of property damage to require physical injury to or destruction of tangible property. It was thought that the addition of the word physical (together with other exclusions in the policy) would eliminate coverage for claims for damages such as diminution in value of property that was not itself physically injured. The physical injury requirement was a reaction to the landmark case of Hauenstein v. St. Paul-Mercury Indemnity Co. 67 In that case, the insured supplied defective plaster that was applied to the walls and ceilings of a building. The plaster shrank and cracked after application and had to be removed and replaced. The court held that the application of the defective plaster in effect 198 Construction Law Seminar September 2012

lowered the market value of the building, constituting property damage under the terms of the policy s insuring agreement. The court held that the measure of the damage was the diminution in the market value of the building or the cost of removing the defective plaster and restoring the building to its former condition, plus any loss from deprivation of use, whichever was lesser. By adding the word physical to the definition of property damage, the insurance industry hoped that this type of diminution-in-value claim would be found outside the scope of CGL coverage. The first prong of the property damage definition is the one most frequently at issue in the construction context, particularly with respect to construction defect claims. The key is distinguishing between a mere defect and physical injury to tangible property. Generally speaking, tangible property suffers a physical injury when the property is altered in appearance, shape, color, or in another material dimension. 68 Competing views exist as to whether the mere incorporation of a defective component into a larger product constitutes property damage. When a product manufactured or installed by an insured has been integrated into another party s property, damage to that property, as a whole, excluding the cost of repairing or replacing the defective part, constitutes property damage. 69 The second prong of the property damage definition deals with inability to use property that is not physically injured. An example is where a property owner alleges his business sustained economic loss during a construction delay. 70 Outside of this context, however, the second prong of the property damage definition oftentimes is problematic because of the impaired property exclusion elsewhere in the policy (as discussed below). It has been argued that defective construction claims fail to allege property damage because damage to the work itself constitutes a mere economic loss or an uninsurable business risk. The definition of property damage, however, does not require that the physical injury to tangible property be to the property of others or of third parties. In rejecting the view that the property damage definition requires damage to third-party property, one federal court stated: The definition of property damage in the policies does not limit the coverage to property that is not in the possession of or work product of the insured. [The insured] correctly points out that if the work product of the insured could never come within the definition of property damage, then the exclusions set forth in the policy to limit such damages would be without meaning. 71 Despite the fact that the definition of property damage does not require that damage be to the property of a third party, some courts have read the property damage requirement in conjunction with the business risk exclusions to hold that damage to the work itself does not constitute property damage. 72 A detailed analysis of the property damage issue from a slightly different perspective was undertaken by the Florida Supreme Court in Auto-Owners Insurance Co. v. Pozzi Window Co. 73 There, the court grappled with the distinction between replacement of a building component rendered defective by faulty installation as opposed to a component that was inherently defective and installed properly. The owner purchased windows, which were installed by a subcontractor. Subsequent to their installation, the windows leaked, causing damage to substantial portions of the owner s home as well as the windows, which had to be removed and replaced. The CGL insurer agreed that the damages to the home were covered, but denied coverage for the replacement of the windows. The court concluded that the record did not resolve whether the windows themselves were defective at installation, or whether they eventually leaked because of defective installation. According to the court, if the windows themselves were defective, the cost of their replacement would not be the result of property damage but simply the cost of rectifying defective work itself. In contrast, if the claim were for the replacement of windows that were not defective at installation, but were damaged by defective installation, Latest Developments in CGL Coverage for Construction Defects (2012 Update) Shidlofsky 199

then that would constitute damages because of property damage and the replacement of the windows would be covered. The rule announced in Pozzi was recently analyzed and followed by the Eleventh Circuit. 74 B. Economic Loss and Consequential Damages Insurers sometimes argue that a loss is purely economic in nature and thus not property damage. Although it is almost uniformly recognized that purely economic losses (i.e., economic losses not tied to any property damage) are not covered, the same is not true for consequential economic losses that arise from or relate to property damage. 75 CGL policies have been interpreted to cover consequential economic damages based on the language of the insuring agreement stating that [w]e will pay those sums that the insured becomes legally obligated to pay as damages because of... property damage. The words because of indicate that the damages must have their origin in physical injury to or loss of use of tangible property. Accordingly, once property damage has been established, the policy then covers economic losses that flow because of the property damage. 76 For example, diminution in value in and of itself is a purely economic loss that would not constitute property damage. 77 However, diminution in value resulting from physical injury to tangible property constitutes damage because of property damage. 78 Other forms of economic loss that occur on construction projects (e.g., project delays, cost overruns, etc.) could be covered as well provided that the economic losses are tied to otherwise covered property damage. VII. The Historical Development of the CGL Forms and Coverage for Defective Work A construction lawyer s first involvement with coverage issues for a particular client or project may only occur after a claim has been made against the client and has been forwarded to an insurance carrier. Following notice, the insurer almost always issues a letter from the adjuster assigned to handle the claim. The letter may take several forms: an outright denial of coverage, acceptance of coverage without reservation, a reservation of rights letter, a request for more information, or a letter containing elements of some or all these positions. In the majority of cases involving property damage to some part of the project itself (as opposed to, for example, damage to a neighboring structure), the insurer will assert or suggest that construction defects themselves are not covered because they are not property damage caused by an occurrence, and/or that only damage resulting from a construction defect is covered. As noted above, the majority of CGL coverage disputes in the construction context in some way spring from this scenario. At the outset of any such coverage dispute, consideration of the historical development of the standard CGL policy is important. The standard CGL policy form has been in a state of continuing development for decades, including major revisions in 1986. Courts hearing construction defect disputes have been particularly amenable to considering the historical development of CGL forms to determine the scope of coverage under present-day policies. The historical development of CGL forms reflects the efforts of the insurance industry to meet the perceived needs of the construction industry and to clarify and modify coverage as new risks have emerged. However, it also illustrates that when emerging, difficult-to-predict risks have resulted in unanticipated exposures for contractors and insurers, contractions of coverage have resulted. Examples include new exclusions of exposures such as asbestos, fungus and mold, lead, and EIFS. A. Business Risk and Revisions of the Forms A tension has long existed between the underwriting of CGL coverage for damage to the work caused by an insured contractor and what underwriters traditionally have referred to as an uninsured business risk. 200 Construction Law Seminar September 2012

The drafting of CGL forms over the past sixty years reflects an effort by the insurance industry to provide a quantum of coverage for certain construction risks, including defective construction, where providing coverage squares with the fortuity which must underpin all insurance. However, in determining whether a certain type of loss is sufficiently fortuitous to be insurable, there can be a fine line between certainty and foreseeability. Many disputes regarding coverage for defective work and resultant damage hinge on such fine distinctions. The drafters of the standard CGL form have attempted to address the concept of uninsured business risk primarily through exclusions and exceptions that have been modified over several years. The standard CGL policy form is promulgated by the Insurance Services Office ( ISO ), an industry organization that drafts many standard forms used by insurers, including the main ISO CGL occurrence form (also known as form CG 00 01). Over the years, the ISO CGL form has undergone several major revisions, including revisions affecting coverage for construction risks. One such revision was issued in 1966, when exclusion o (the work performed exclusion) was added to the policy in order to broadly exclude coverage for property damage arising out of work performed by or on behalf of the named insured. This excluded coverage for property damage arising out of the work of the insured and its subcontractors. However, in recognition of the nearly blanket nature of the exclusion vis-à-vis damage to the work, two companion endorsements were made available in 1969. One endorsement expanded coverage to include ongoing operations, and one expanded coverage to include both ongoing operations and completed operations. Exclusion o was retained in the 1973 revision of the form, and the two endorsements also were retained. For a time, the endorsements became collectively known as the broad form property damage endorsement. The endorsement providing only operations coverage became separately known as advisory endorsement 3006 (excluding completed operations). The endorsement providing both operations and completed operations coverage became separately known as advisory endorsement 3005 (including completed operations). 79 Endorsement 3005 proved to be an overwhelmingly more popular endorsement in the construction industry, and eventually came to be referred to simply as the broad form property damage endorsement (BFPDE). Indeed, insurance provisions in construction contracts sometimes still refer to the BFPDE, even though its coverage was long ago incorporated into the main CGL policy form, as discussed further below. The BFPDE expanded the coverage under the 1973 version of the main CGL form by, among other modifications, modifying the work performed exclusion to delete the reference to work performed on behalf of the named insured. As a result, coverage included property damage arising out of work performed by subcontractors. The CGL policy form underwent another major revision in 1986. The 1986 revisions were widely hailed throughout the insurance industry, both for their simplification and reduction of the number of forms, as well as their use of more plain language. 80 One of the simplifications sought by ISO was to clarify the limitations on the business risk concept introduced in 1973 by the BFPDE. Because of the popularity of the extra coverage provided by the BFPDE, one major revision to the main CGL form was adding an exception for subcontractor work to Exclusion l (the your work exclusion). This key exception states that the your work exclusion does not apply to work performed on the named insured s behalf by a subcontractor. The revisions also rewrote and streamlined other exclusions, including exclusions j and m, which apply primarily to risks that arise during construction operations, and loss-of-use damages (as discussed further below). 81 B. CGL Coverage vs. Performance Bonds In addition to citing the business risk doctrine as a basis to deny coverage for certain damages arising from construction defects, insurers have argued that providing liability coverage for such damages would impermissibly convert CGL policies into performance bonds. Latest Developments in CGL Coverage for Construction Defects (2012 Update) Shidlofsky 201

Of course, it is true that a performance bond is not insurance, and vice versa. Insurance is a contract of indemnity, while a surety bond is a guaranty of the performance of the principal s obligations. An insurance policy is issued based on an evaluation of risks that are actuarially linked to premiums. Expected losses (sometimes referred to as loss picks by underwriters) are determined in advance. In contrast, a surety bond is underwritten based on what amounts to a credit evaluation of the particular contractor and its capabilities to perform its contracts with the expectation that no losses will occur. As part of the underwriting of a bond, the surety analyzes the strengths and weaknesses of the contractor and its ability to perform its obligations. The process is very similar to the process used by a lender in making a loan. In addition, the performance bond is not for the protection of the contractor (the principal), but rather for the protection of the owner (the obligee). Recent cases such as United States Fire Insurance Co. v. J.S.U.B., Inc. 82 and Lamar Homes, Inc. v. Mid- Continent Casualty Co. 83 have addressed the distinctions between the two types of instruments. In Lamar Homes, the Supreme Court of Texas concluded that any similarities between CGL coverage and a performance bond under the circumstances of a subcontractor defect claim were irrelevant to the scope of coverage under a CGL policy, and that no rule of policy construction operates to eliminate coverage simply because similar protection may also be available through another product. 84 As noted above, a performance bond is a three-party instrument between the obligee, the surety, and the contractor, with the surety retaining a right of indemnity against the contractor as well as other indemnitors, typically the contractor s individual owners. Thus, the contractor will ultimately be required to pay the loss from its own funds by indemnifying the surety for amounts paid to or for the benefit of the obligee. This is a fundamental distinction between performance bonds and CGL coverage: an insurance company has no right of indemnity against its insured for covered losses. An insurer is instead limited to recover against third parties through subrogation (to the extent subrogation is not limited by the insurance policy and/or separate waivers of subrogation). One of the assumptions behind the argument that CGL coverage should be limited where it would subsume certain obligations of a performance bond is that the scope of a performance bond and a CGL policy must be mutually exclusive. While it is true that there are many types of risks and losses that fall within the ambit of a bond and not an insurance policy, and vice versa, there can be considerable overlap between the two. For example, assume that a residential condominium building is constructed with defective balconies which slope backward toward the building. The problem is compounded by defective waterproofing and flashing that allow water to enter finished individual units. The plans and specifications called for a proper slope and proper waterproofing and flashing, but the general contractor used a subcontractor who failed to perform as required. If the general contractor does not fix the defective balconies after a request from the developer (the surety bond obligee), this may trigger a performance bond default and the surety s obligation to remedy the work. In that case, the surety would usually cover the cost of removing and rebuilding the balcony (some of which may be treated as covered rip-and-tear work under a CGL policy). Resultant damage to unit owner build-outs which were not in the scope of the contractor s work would likely not be covered by the performance bond but would be covered under the contractor s CGL policy as resultant damage. Upon payment to the owner of a performance bond claim involving defective workmanship, the surety would have a right of indemnification against the principal-contractor and would be subrogated to the contractor s rights under its CGL policy. A surety s right of subrogation against its principal s CGL insurer is well recognized. 85 Some courts continue to find that CGL coverage for defective workmanship is generally barred because to hold otherwise would convert the policy into a performance bond. In that regard, see Essex Ins. Co. v. Holder., 86 relying upon Nabholz Construction Corp. v. St. Paul Fire & Marine Insurance Co. 87 Overall, how- 202 Construction Law Seminar September 2012

ever, the argument seems to be waning as an independent basis to deny CGL coverage for defective workmanship claims. 88 VIII. Exclusions Standard CGL coverage for bodily injury and property damage is subject to approximately twenty exclusions. The exclusions of particular applicability in the construction context are discussed below. A. Expected or Intended Injury As the discussion of the definition of occurrence emphasized, the notion of fortuity that is, an accident is central to the principle of liability insurance that an insured cannot control the risk or intentionally cause bodily injury or property damage. Exclusion a, the expected or intended injury exclusion, states that the insurance does not apply to bodily injury or property damage expected or intended from the standpoint of the insured. The expected or intended injury exclusion had its genesis in prior definitions of occurrence, and is discussed above in connection with the definition of occurrence. B. Contractual Liability Exclusion (and Coverage) The contractual liability exclusion is of critical importance in the construction context because construction contracts usually contain some form of indemnity or hold harmless agreement whereby a downstream party such as a contractor agrees to indemnify the upstream party such as an owner for bodily injury and property damage arising out of the contractor s operations. An example of such an indemnity agreement is found in paragraph 3.18 of A201, the General Conditions for the Construction Contract promulgated by the American Institute of Architects. The enforceability of an indemnity clause in a construction contract is determined by reference to the applicable state law, and may be subject to regulations or an anti-indemnity statute. That indemnity obligation may be insured under a CGL policy, but under an equally complex exclusion that provides coverage by means of an exception. The standard CGL policy provides coverage for this indemnity exposure by means of the contractual liability coverage provided for in the policy. The coverage is part of the standard form but is provided in a somewhat circuitous manner that is, by means of an exception to exclusion b, the contractual liability exclusion. The exclusion states that the insurance does not apply to: Bodily injury or property damage for which the insured is obligated to pay damages by reason of the assumption of liability in a contract or agreement. This exclusion does not apply to liability for damages: 1. That the insured would have in the absence of the contract or agreement; or 2. Assumed in a contract or agreement that is an insured contract, provided the bodily injury or property damage occurs subsequent to the execution of the contract or agreement.... In turn, the defined term insured contract lists the types of indemnification clauses to which the exclusion does not apply (and for which there is coverage), including a lease of premises, a sidetrack agreement, an easement or license agreement, an obligation to indemnify a municipality except in connection with work for a municipality, and an elevator or maintenance agreement. Most significantly, subparagraph f of the definition of insured contract includes: That part of any other contract or agreement pertaining to your business (including an indemnification of a municipality in connection with work performed for a municipality) under which you assume the tort liability of another party to pay for bodily injury or property damage to a Latest Developments in CGL Coverage for Construction Defects (2012 Update) Shidlofsky 203

third person or organization. Tort liability means a liability that would be imposed by law in the absence of any contract or agreement. As noted above, the general purpose of contractual liability coverage is to insure the indemnitor s obligation to indemnify the indemnitee for bodily injury or property damage to third parties arising out of performance of the contract. While exclusion b excludes coverage for all liability assumed by contract, the exception for insured contracts for the most part swallows the exclusion for many claims in the construction context. It must be emphasized that the exclusion does not apply to property damage for which the insured is directly liable based on breach of contract. By its terms, it applies only to liability by reason of the assumption of liability that is, pursuant to a hold harmless agreement that is not within the companion definition of insured contract. Case law, for the most part, upholds this underwriting intent. In American Family Mutual Insurance Co. v. American Girl, Inc., 89 the court held that the exclusion applies where the insured has contractually assumed the liability of a third party, as in an indemnification or hold harmless agreement, and that it does not operate to exclude coverage for any and all liabilities to which the insured is exposed under the terms of the contracts it makes generally. 90 Recently, the Texas Supreme Court rejected a long line of case law and commentary to hold that the contractual liability exclusion was not limited to hold harmless and indemnity agreements. 91 That holding was then extended by the Fifth Circuit to apply to any breach of contract by the insured contractor. 92 Given this new case law, it will be interesting to see whether the contractual liability exclusion becomes the new battleground for insurers in 2012 and beyond. C. Owned Property and Alienated Premises Exclusions The CGL policy is a liability policy and is intended to cover just that: liability to third parties. As such, the policy excludes damage to property owned by the insured on the premise that first-party property insurance is the appropriate vehicle to cover such losses. Two exclusions accomplish this intent in the CGL policy. The first, subparagraph (1) of exclusion j, states that the insurance does not apply to property damage to: Property you own, rent, or occupy, including any costs or expenses incurred by you, or any other person, organization or entity, for repair, replacement, enhancement, restoration or maintenance of such property for any reason, including prevention of injury to a person or damage to another s property. This exclusion generally protects against the moral hazard problem, in that theoretically an insured has less incentive to take precautions to prevent damage to its own property if it has insurance to cover that damage. The exclusion is intended to prevent the liability insurer from becoming a guarantor of the insured s operations. While case law addressing the owned property exclusion is not extensive, it generally upholds this intent as to construction exposures. 93 The applicability of the owned-property exclusion can arise in the context of condominium developments. For example, in the event the developer of the project is unable to sell the units at the pace it intended, it frequently remains the owner of the unsold units. This was the situation in State Farm Fire & Casualty Co. v. English Cove Association, Inc. 94 The homeowners association filed suit against the developer for construction defects in the common areas, including the exterior walls in which water intrusion took place. The insurer raised the owned property exclusion as to 43 of the 160 units of which the developer retained ownership. The court held that, since the developer retained ownership of the unsold units and had an undivided interest in the common areas of the project, and since the word owned was not ambiguous, the policy exclusion applied. Subparagraph (2) of exclusion j excludes coverage for property damage to: 204 Construction Law Seminar September 2012

Premises you sell, give away or abandon, if the property damage arises out of any part of those premises. However, this exclusion is subject to the following exception: Paragraph 2 of this exclusion does not apply if the premises are your work and were never occupied, rented or held for rental by you. The prior version of this exclusion was referred to as the alienated premises exclusion because it applied to premises alienated by the named insured and arising out of the premises. That earlier edition did not include the exception for premises that are your work that is, the named insured s work that were never occupied, rented, or held for rental by the named insured. As such, the current version of the exclusion, added in 1986, does not apply to developers and contractors who ultimately sell the construction project. The absence of this exception caused the exclusion to be applied to a contractor s completed operation despite the subcontractor exception to the your-work exclusion. 95 The court in Maryland Casualty Co. v. Reeder 96 viewed this as unfair. In that case, a developer had conveyed his interest in a project years before any of its CGL policies were issued to him and before construction of the defective condominiums involved in the claim commenced. The court determined that application of the alienated premises exclusion under those circumstances would rob the developer of any benefit whatsoever from the insurance under his CGL policy. These types of arguments led to the insertion of the clarification in 1986 that the exclusion does not apply to a contractor s work that was never occupied, rented, or held for rental by it. The application of the alienated premises exclusion should now be limited primarily to situations involving the sale of premises that were not constructed or developed by the insured for sale. However, where a contractor or developer will occupy or rent a completed project prior to selling it, it may seek a modification of the exclusion to add a time limitation in the event it is possible to predict under what circumstances, and for how long, the insured may occupy, rent, or hold for rent the premises before selling them. D. Care, Custody, or Control Personal Property Subparagraph (4) of exclusion j provides that the insurance does not apply to personal property in the care, custody or control of the insured. An exception to the exclusion states that it does not apply to liability assumed under a sidetrack agreement. In 1986, the exclusion was modified to make it clear that it applies only to personal property in the care, custody, or control of the insured. Earlier versions of the exclusion stated that the insurance did not apply to property damage to property in the care, custody, or control of the insured or as to which the insured was for any purpose exercising physical control. 97 This was problematic because, under the standard 1973 version of the exclusion, some courts applied the exclusion to the entire construction project that is, real property where the insured was in charge of the entire jobsite. For example, in Estrin Construction Company, Inc. v. Aetna Casualty & Surety Co., 98 a windstorm toppled the partially completed walls of a warehouse project. Although the court recognized the principle that real property is not usually found to be in the care, custody, or control of the contractor engaged to work on less than an entire structure, the court held that because the insured under the terms of its contract had immediate supervision of every phase of the project, the real property was in the care, custody, or control of the contractor for purposes of the exclusion. Whether or not certain property constitutes real property is frequently disputed. One factor to consider is whether the damaged property was affixed to the realty, as illustrated in cases like Houston Building Services, Inc. v. American General Fire & Casualty Co. 99 (finding that doors and frames in an office building were annexed to the building and adapted for a specific use of the property and were therefore real property) and Crane Operators, Inc. v. Fidelity Excess & Surplus Insurance Company, Inc. 100 (finding that a crane barge Latest Developments in CGL Coverage for Construction Defects (2012 Update) Shidlofsky 205

damaged by a crane boom was personal property because the crane barge was movable within the meaning of the care, custody, or control exclusion). E. Exclusions for Ongoing Operations and Incorrect Work As noted above, the primary means of insuring a project during construction is builders risk insurance, which is first-party coverage usually obtained by the owner or the general contractor. However, in certain circumstances, the CGL policy also provides coverage for operations in progress, and the operations exclusions have been frequently litigated in the construction defect context. The operations exclusions mirror builders risk coverage in that they usually exclude the cost of making good faulty workmanship, but provide coverage for ensuing loss where defective workmanship results in another cause of loss to the work. Under subparagraphs (5) and (6) of exclusion j, the concept of ensuing loss is embodied in the limitation of the exclusions to that particular part upon which the insured is performing operations, or property that must be replaced because of defective work performed upon it. Subparagraph (5) of exclusion j, commonly referred to as the ongoing operations exclusion, states that the insurance does not apply to property damage to: That particular part of real property on which you or any contractors or subcontractors working directly or indirectly on your behalf are performing operations, if the property damage arises out of those operations. As discussed in CU Lloyd s of Texas v. Main Street Homes, Inc., 101 because of the use of the present tense, courts have found that the ongoing operations exclusion does not apply to property damage that occurs after construction is complete, but only to property damage that occurs while operations are in progress. In addition, courts have found the exclusion applies only to damage caused during active physical construction activities, as explained in Mid-Continent Casualty Co. v. JHP Development, Inc. 102 (indicating that exclusion j(5) did not apply to damage caused during a prolonged suspension of active construction work during which the insured was not actively performing a task at the jobsite). Assuming the property damage occurs while operations are in progress, the that particular part language further limits the scope of the exclusion. Only that particular part of the work on which operations are actually being performed and which is damaged is excluded. In an explanatory circular, ISO sets out an example where a steel erector is erecting steel beams furnished by the general contractor. Having erected four of the beams, the subcontractor is in the process of erecting a fifth steel beam when the beam falls, resulting in damage to all five beams. Only the damage to the fifth beam is excluded as that particular part upon which it was performing operations. 103 Subparagraph (6) of exclusion j, sometimes referred to as the incorrect work exclusion, is a companion to exclusion j(5). It states that the insurance does not apply to property damage to: That particular part of any property that must be restored, repaired, or replaced because your work was incorrectly performed on it. Exclusion j(6) is subject to the following exception: Paragraph (6) of this exclusion does not apply to property damage included in the productscompleted operations hazard. The express provision that exclusion j(6) does not apply to the products-completed operations hazard is routinely upheld by the courts and clarifies that the exclusion does not apply to a completed operations loss (that is, a loss that occurs after the work is put to its intended use or all work under the insured s contract 206 Construction Law Seminar September 2012

is completed). 104 Rather, it is exclusion l, the your-work exclusion (discussed below), which applies in such situations. As is the case with the ongoing operations exclusion, the that particular part language in the exclusion often limits its applicability. In many construction claims, particularly construction defect claims, the amount of available coverage turns on the interpretation of the that particular part language. Insurers may argue that coverage for all of the insured s work is excluded under the exclusion. Thus, the insured must be able to segregate out the defective from the non-defective portions of the work in determining that particular part, in order to limit the scope of the exclusion. Transportation Insurance Co. v. Piedmont Construction Group, LLC 105 provides an example of the competing arguments employed by insureds and insurers as to the scope of the term that particular part. In that case, during the course of a dormitory renovation, a plumbing subcontractor negligently ignited wood scrap, damaging the rest of the dormitory. The insurer argued that, because the contractor s renovation contract involved the entire dormitory, coverage for the entire loss was excluded. The court rejected this argument, determining that particular part of the real property upon which the contractor s subcontractor was working applied only to the room in which the plumber was working at the time the fire was started, rather than the entire building that was being renovated at the time of the fire. Mid-Continent Casualty Co. v. JHP Development, Inc. 106 involved a more typical construction defect scenario where property damage caused by defective work on a condominium project allowed water to infiltrate the structure and damage otherwise non-defective portions of the work. In upholding coverage for the non-defective portions of the condominium project under the contractor s policy, the court applied the that particular part limitation in exclusion j(6). The court held that the exclusion barred coverage only for property damage to parts of the property that constituted defective work by the insured, and that the exclusion did not bar coverage for damage to parts of the property that were not defective work by the insured but were damaged as a result of defective work by the insured on other parts of the property. 107 Another case involving the that particular part limitation is Gore Design Completion, Ltd. v. Hartford Fire Insurance Co. 108 There, the insured miswired a component of an in-flight entertainment system in a commercial aircraft, resulting in physical damage to the aircraft s entire electrical system. The court observed that if exclusion j(6) were applied to the entire aircraft, rather than only the in-flight entertainment system, the that particular part limitation would be read out of the policy. 109 Some courts, however, do no read the that particular part language narrowly and instead apply it broadly. 110 F. The Your-Work Exclusion and the Subcontractor Exception The concept of business risk that is, that the construction participant should be responsible for the quality of its own work is particularly reflected in exclusion l, the your work exclusion. This exclusion is commonly at issue in construction defect cases. Although the exclusion applies to the defined term your work, it is subject to an exception for property damage arising out of work performed by a subcontractor. This subcontractor exception may provide a considerable amount of coverage for insureds that perform construction services through subcontractors. The exception was a concession by the insurance industry that the general contractor is unable to monitor and control all the work of subcontractors, and that property damage arising out of such work is more fortuitous than work that a general contractor performs directly. The significance of the exception follows from the fact that self-performed work by a general contractor now appears to be the exception, rather than the rule, on complex construction projects. The your-work exclusion states that the insurance does not apply to: Property damage to your work arising out of it or any part of it and included in the products-completed operations hazard. Latest Developments in CGL Coverage for Construction Defects (2012 Update) Shidlofsky 207

This exclusion does not apply if the damaged work or the work out of which the damage arises was performed on your behalf by a subcontractor. The exclusion by its terms applies to property damage to your work, defined in the policy as follows: Your Work means: (1) Work or operations performed by you or on your behalf; and (2) Materials, parts or equipment furnished in connection with such work or operations. Includes: (1) Warranties or representations made at any time with respect to the fitness, quality, durability, performance or use of your work, and (2) The providing of or failure to provide warnings or instructions. In turn, the terms you and your refer to the named insured on the policy. Finally, the exclusion only applies to property damage within the products-completed operations hazard, defined to include: [A]ll bodily injury and property damage occurring away from premises you own or rent and arising out of your product or your work except: (1) Products that are still in your physical possession; or (2) Work that has not yet been completed or abandoned. However, your work will be deemed completed at the earliest of the following times: (a) When all of the work called for in your contract has been completed. (b) When all of the work to be done at the job site has been completed if your contract calls for work at more than one job site. (c) When that part of the work done at a job site has been put to its intended use by any person or organization other than another contractor or subcontractor working on the same project. Work that may need service, maintenance, correction, repair or replacement, but which is otherwise complete, will be treated as completed. The effect of the your work exclusion is to exclude coverage for all property damage to the named insured s work arising out of it or any part of it. Because the term your work is defined in the policy to include work performed by the named insured or on its behalf, the exclusion, but for the explicit exception for property damage arising out of work performed by subcontractors, would also apply to subcontractor work. Because of the widespread use of subcontractors in the construction industry, the exception often preserves coverage for insureds, and, by virtue of the subcontractor exception, the named insured has coverage notwithstanding the exclusion for exposures such as: Property damage to work performed by the insured when the damage results from the work of the insured s subcontractor; Property damage to work performed by the insured s subcontractor when the damage results from that subcontractor s work; Property damage to work performed by the insured s subcontractor when the damage results from work performed by the insured; and Property damage to work performed by the insured s subcontractor when the damage results from the work of another contractor or subcontractor. 111 208 Construction Law Seminar September 2012

It appears that the insurance industry determined that the construction industry would view the CGL policy as a more attractive product and that the CGL policy could be better sold if it contained coverage for property damage arising out of subcontractor work. 112 In addition, the extension of coverage to subcontractors defective work was in accord with the notion that the insured should have coverage for liability to or because of work other than its own. 113 The discernible trend in the case law is to provide coverage for property damage arising out of the work of a subcontractor under an insured contractor s CGL policy. Illustrative cases include United States Fire Insurance Co. v. J.S.U.B., Inc. 114 (the subcontractor exception to the your work exclusion provides coverage for property damage to homes arising out of defective site preparation); Lamar Homes, Inc. v. Mid-Continent Casualty Co. 115 (the subcontractor exception preserves coverage when a general contractor becomes liable for damage to work performed by a subcontractor or for damage to the general contractor s own work arising out of a subcontractor s work); Travelers Indemnity Company of America v. Moore & Associates 116 (damages resulting from the subcontractor s faulty installation of windows are not excluded from coverage, even if those damages affected the general contractor s own work); Architex Association, Inc. v. Scottsdale Insurance Co. 117 (the subcontractor exception applies to property damage to a foundation resulting from defective installation of rebar by the named insured s subcontractor); American Family Mutual Insurance Co. v. American Girl, Inc. 118 (damage to a warehouse arising out of defective site preparation is within the exception, determining that conflicting authorities interpreting CGL policies that did not include the subcontractor exception are no longer controlling because the damage to an insured contractor s work caused by a subcontractor is within the subcontractor exception in the 1986 form); and Auto Owners Insurance Co. v. Newman 119 (the subcontractor exception preserved coverage for damage arising out of defective installation of EIFS by a subcontractor, which would otherwise be excluded under the your work exclusion). Nevertheless, other courts have refused to apply the subcontractor exception to property damage arising out of a subcontractor s work. For example, see Kvaerner Metals v. Commercial Union Insurance Co. 120 (the subcontractor exception did not obviate the fact that faulty work on a coke battery resulting in damage to the battery itself was not an accident under the contractor s CGL policy); William C. Vick Construction Co. v. Pennsylvania National Mutual Casualty Insurance Co. 121 (seminal case decided under the 1973 broad form property damage endorsement that coverage for the defective workmanship of the insured s subcontractor was nevertheless excluded based upon a business risk rationale); and Lexicon, Inc. v. ACE American Insurance Co. 122 (finding that collapse of silo arising out of defective welding by a subcontractor was not an occurrence under Arkansas law). The breadth of the subcontractor exception to the your work exclusion led to the promulgation of a standard endorsement by ISO, CG 22 94 10 01, that modifies the your work exclusion by eliminating the subcontractor exception. By issuing the endorsement, ISO has, in effect, facilitated a significant reduction in coverage for many construction insureds. 123 Construction insureds need to pay careful attention at the time of insurance procurement to whether quoted CGL policies are subject to the endorsement, as a true determination of the relative cost and scope of coverage must take into account the potentially significant effect of the presence or absence of the subcontractor exception. G. Impaired Property Exclusion The complexity of modern construction raises new risks associated with construction-related property damage, one of which is damage to neighboring or existing property. For example, assume that a contractor is hired to construct a major addition to a computer chip plant. In the course of doing so, it cuts off power to the plant, shutting it down and contaminating all the clean rooms, resulting in a total loss of product for Latest Developments in CGL Coverage for Construction Defects (2012 Update) Shidlofsky 209

several days. While the property damage to the electrical equipment may be relatively minimal, the damage to the clean rooms and the chips may be substantial. It is this risk of damage to other property that the impaired property exclusion is intended to apply. Exclusion m, added to the 1986 CGL form, states that the insurance does not apply to: Property damage to impaired property or property that has not been physically injured, arising out of: (1) a defect, deficiency, inadequacy or dangerous condition of your product or your work ; or (2) a delay or failure by you or anyone acting on your behalf to perform a contract or agreement in accordance with its terms. This exclusion does not apply to the loss of use of other property arising out of sudden and accidental physical injury to your product or your work after it has been put to its intended use. The 1986 revision also added the following definition of impaired property to the policy: Impaired property means tangible property, other than your product or your work, that cannot be used or is less useful because: (a) it incorporates your product or your work that is known or thought to be defective, deficient, inadequate or dangerous; or (b) you have failed to fulfill the terms of a contract or agreement; If such property can be restored to use by: (a) the repair, replacement, adjustment or removal of your product or your work or (b) your fulfilling the terms of the contract or agreement. A key to understanding the exclusion is that it applies to two different types of property damage: impaired property and property that has not been physically injured. The term impaired property is primarily directed to exclusion of damages for loss of use, as it is defined to include tangible property, other than the insured s product or work, that cannot be used or is less useful. The exclusion s reference to property that has not been physically injured appears directed to diminution-in-value claims where no property has been physically injured or destroyed. 124 An example of an impaired property exclusion case is Admiral Insurance Co. v. Little Big Inch Pipeline Co., 125 in which the court held that exclusion m applied to bar coverage for diminution-in-value claims arising out of the insured subcontractor s defective work in turning off natural gas service to a mobile home park because no property had been physically injured and the loss arose out of the insured s inadequate performance. Another key factor in determining whether property is impaired for purposes of the exclusion is the status of the named insured. If the named insured is a general contractor that is in charge of the entire project, no portion of that project can constitute impaired property because property is, by definition, impaired only if it is property other than the named insured s work. A case illustrating this concept is Corn Plus Co-Op v. Continental Casualty Co., 126 in which the court held that exclusion m barred coverage for the cost associated with the repair of the insured s defective welding at an ethanol processing plant. The exclusion also applied to consequential damages, including loss of use of the plant and decreased ethanol production, because the plant itself was not the insured s work only the welding was and the insured s work rendered the ethanol plant impaired. In other words, the impaired property exclusion targets situations where a defective product, after being incorporated into the property of another, must be replaced or removed at great expense thereby causing a loss of use of the property. 127 Moreover, the exclusion bars coverage for loss-of-use claims where the loss 210 Construction Law Seminar September 2012

was caused solely by the insured s failure to provide work of the quality or performance capabilities called for by the contract and where there has been no physical injury to property other than the insured s work itself. The exclusion does not apply if there is damage to property other than the insured s work or if the insured s work cannot be repaired or replaced without causing physical injury to other property. 128 The definition of impaired property is not satisfied where property cannot be restored to use by the repair of the insured s work. This was the situation in Federated Mutual Insurance Co. v. Grapevine Excavation, Inc., 129 where it was alleged that the insured excavation contractor s work damaged a parking lot, and the proposed repair was to overlay the parking lot with additional asphalt, rather than remove or repair the select fill installed by the subcontractor. The court held that the parking lot did not constitute impaired property because there was no suggestion that the damage to the surface of the parking lot could be restored by the repair, replacement, adjustment, or removal of the select fill installed by the excavation subcontractor. The entire exclusion is also subject to an exception for sudden and accidental physical injury to the insured s work after it has been put to its intended use. For example, in Mississippi Phosphates Corp. v. Furnace and Tube Service, Inc., 130 the court held that the impaired property exclusion did not exclude coverage for loss of use of a sulfuric acid plant arising out of the sudden and accidental injury to the plant after the water boiler worked on by the insured was put to its intended use. Though the impaired property exclusion was inserted into the policy form in 1986, a body of case law has been slow to develop, perhaps because of the complexities associated with it. H. Product Recall (Sistership) Exclusion Another exclusion sometimes cited in the construction defect context is exclusion n, the product recall exclusion, which states that the insurance does not apply to: Damages claimed for any loss, cost or expense incurred by you or others for the loss of use, withdrawal, recall, inspection, repair, replacement, adjustment, removal or disposal of: (1) Your product ; (2) Your work ; or (3) Impaired property ; If such work, or property is withdrawn or recalled from the market or from use by any person or organization because of a known or suspected defect, deficiency, inadequacy or dangerous condition in it. Exclusion n historically is known as the sistership exclusion because of the underwriting intent at the time it was first drafted: to deny coverage for claims based upon the cost of withdrawing a product from the market, replacing a product, or the loss of use of a product that is temporarily or permanently withdrawn from market because of occurrences involving the same or a similar product. That intent was explained in Gulf Insurance Co. v. Parker Products, Inc. 131 The name derives from an occurrence in the aircraft industry where all airplanes of a certain make and type were grounded by an order of the Civil Aeronautics Administration because one crashed and others were suspected of having a common structural defect. The damages arising out of the loss of use of all of the sister ships were enormous. The recall of equipment or parts discovered to have a common fault involve expenses incurred to prevent accidents that have not occurred. While the insurance covers damages for bodily injuries and property damage caused by the product that failed, it never was intended that the insurer would be saddled with the cost of preventing other failures, any more than it was intended that the insurer would pay the cost of preventing the first failure if the product had been discovered to be in a dangerous condition before the occurrence. 132 Latest Developments in CGL Coverage for Construction Defects (2012 Update) Shidlofsky 211

Nevertheless, the product recall exclusion applies only to damages claimed for any loss, cost, or expense incurred if a product is withdrawn or recalled from the market because of a known or suspected defect. 133 In Auto Owners Insurance Co. v. Newman, 134 however, after holding that coverage for property damage arising out of the installation of defective stucco by the insured homebuilder s subcontractor caused water infiltration damage to a home, the court went on to apply the product recall exclusion, even though the property damage was to a single home and did not involve the withdrawal of any other homes from the market or use. Moreover, it was not clear from the opinion whether the home that was damaged ever was withdrawn from use. The court held that the exclusion applied to the cost of removal and replacement of the defective stucco, determining that those costs fell within the exclusion as the cost of repair and replacement of the insured s work that was withdrawn from use because of a defect. Again, the application of the exclusion under these circumstances is open to question, especially where the subcontractor exception expressly preserves coverage for the cost of repairing and replacing property damage caused by the defective work of subcontractors, including the work of the subcontractor itself. IX. Common Construction-Related Endorsements to a CGL Policy A. Professional Liability Because of blurring lines between traditional design and construction, most CGL policies issued to construction industry participants contain exclusions for traditional architectural, engineering, and supervision activities by the insured. A good deal of variation exists among manuscript endorsements attached to policies for this purpose, and special care should be used in reviewing them. Generally, for traditional designbid-build projects, the ISO CG 22 79 endorsement should be used, as it preserves coverage for incidental design services performed as a part of a contractor s construction means and methods. Where a contractor provides design services, ISO endorsement CG 22 80 should be used where available. B. Habitational Exclusionary Endorsements The wave of litigation involving defects in residential construction attracted not only the attention of the construction industry, plaintiffs lawyers, and homeowners associations, but also the insurance industry. The potentially staggering liability associated with completed operations claims brought by multitudes of plaintiffs in a single lawsuit spawned the attachment of habitational endorsements designed to exclude coverage not only for claims arising out of single-family homes or multi-family condominium developments, but also apartments, assisted living facilities, nursing homes, hospitals, military housing, and other similar construction projects. These endorsements are manuscripted (that is, written by specific insurance companies, as opposed to ISO forms) and should be tailored to the needs of particular insureds; for example, an apartment developer may have a residential exclusion on its policy, but it usually specifically excepts apartment projects. Nevertheless, problems can arise even with these types of endorsements in the event an apartment project is sold and later converted into condominiums. If the apartment developer s policy includes a habitational endorsement that applies to condominiums, the issue arises as to whether it would apply to the converted project. Again, because of the individual nature of these endorsements, they must be examined carefully by the insured. C. Other Specific Exclusionary Endorsements Endorsements that exclude coverage for mold and fungi, lead, asbestos, and EIFS are nearly universal in CGL policies issued to construction industry participants. These types of endorsements reflect that certain 212 Construction Law Seminar September 2012

substances have, over time, presented such an inordinate amount of risk and attendant liability that they have simply been carved out of the CGL market. Prior to such explicit exclusions (particularly asbestos exclusions), disputes between the insurers and insureds abounded as to coverage. A more recent example is coverage for mold damage under the CGL policy. 135 X. Standard Conditions of the CGL Policy CGL policies have numerous conditions that must be followed, and an insured s failure to do so can, in certain circumstances, lead to a forfeiture of coverage. The most common conditions involve notice, cooperation, and voluntary payments or settlement without consent. A prevalent issue for years has been whether an insurer must demonstrate prejudice in order to rely on a breach of these common conditions to deny coverage. The answer depends on the jurisdiction. Some require a showing of prejudice while others do not. 136 A similar issue is whether an insured must comply fully with the conditions or whether substantial compliance is sufficient. Again, the answer depends on the jurisdiction. A. Notice CGL policies generally require that the insured provide notice of an occurrence as soon as practicable. This condition often is coupled with a requirement that the insured must immediately forward any suit papers. Although the notice requirements seemingly are straightforward, they have generated a significant amount of case law. Compliance with the provision that notice of an occurrence or accident be given as soon as practicable oftentimes is treated as a condition precedent, the breach of which forfeits policy coverage. As soon as practicable is commonly understood to mean as soon as notice would have been given by an ordinarily prudent person in the exercise of ordinary care in the same or similar circumstances. What constitutes a reasonable time within which notice must be given may depend on the individual facts and circumstances of each particular case, including but not limited to age, experience, and capacity for understanding and knowledge that coverage exists. The purpose of the timely-notice requirement is to enable an insurer to investigate the circumstances of an accident while the matter is fresh in the minds of the witnesses, so that it may adequately prepare to adjust or defend any claims that may be asserted against persons covered by its policy. When an insurer must prove it was prejudiced by the insured s failure to comply with the notice provisions, the recognized purposes of the notice requirements form the boundaries of the insurer s argument that it was prejudiced; a showing of prejudice generally requires a showing that one of the recognized purposes has been impaired. 137 Under claims-made policies, on the other hand, most jurisdictions do not require any showing of prejudice. 138 Any notice given after a claims-made policy period (and any applicable extended reporting period) ends will be insufficient as a matter of law. Accordingly, an insured must make sure it strictly follows the notice requirements of any claims-made policy. In addition to timely providing notice of the claim, insureds are required to timely provide notice of suit and forward all suit papers. The majority view across the country is that an insurer does not have a duty to defend until the lawsuit is tendered to the insurer for a defense. 139 Accordingly, it is important to put a CGL insurer on notice of a loss or claim as soon as possible. Moreover, the fact that an initial pleading does not trigger a duty to defend does not foreclose the possibility that an amended or supplemental pleading may do so. Consequently, it always is important to tender amended and supplemental pleadings as soon as they are received. Latest Developments in CGL Coverage for Construction Defects (2012 Update) Shidlofsky 213

B. Cooperation CGL policies also require that the insured cooperate in the investigation, settlement, or defense of the claim or suit. Specifically, the cooperation clause typically states: You and any other involved Insured must:... cooperate with us in the investigation, settlement or defense of the claim or suit. An insured has a duty to cooperate with its insurer in the defense of claims for which the insurer has a duty to defend. 140 On the other hand, if the insurer denies a duty to defend, the insured should no longer have any duty to cooperate with the insurer. 141 The cooperation clause serves to assist the insurance company to (1) obtain information concerning a loss while the information is still fresh, (2) determine its obligations to indemnify for the loss and/or defend its insured, (3) protect itself from fraudulent claims, and (4) pursue a subrogation claim against a responsible third party, if applicable. It has been held that the duty to cooperate should be limited to the insured s assistance in the liability lawsuit, and does not extend to assisting the insurer in its coverage determination. 142 The issue of whether an insured has breached the cooperation clause should, in most instances, be treated as a question of fact. 143 Moreover, the majority of jurisdictions hold that reasonable and substantial compliance with the cooperation clause is adequate absent a showing of prejudice on the part of the insurer. 144 C. Voluntary Payments/Settlement Without Consent The voluntary-payments provision, also known as the settlement-without-consent clause or voluntary-assumption-of-liability condition, generally states, No insureds will, except at their own cost, voluntarily make a payment, assume any obligation, or incur any expense, other than for first aid, without our consent. This provision is very important in the construction defect context. Because of contractual obligations and the importance of timely performance, contractors have a tendency to fix a problem or damage and then notify their insurance company. Contractors that repair damage before putting their insurance carrier on notice run the risk of a coverage denial. Likewise, even if the carrier is put on notice, insureds should seek approval before starting any repair or admitting any liability. Some courts have held that an insurer must show prejudice in order to deny coverage based on breach of the settlement without consent condition. 145 Notwithstanding the foregoing, the Fifth Circuit Court of Appeals has stated that [a]n insurer s right to participate in the settlement process is an essential prerequisite to its obligation to pay a settlement, 146 concluding that an insurer is prejudiced as a matter of law when the insurer is not consulted about the settlement, the settlement is not tendered to it and the insurer has no opportunity to participate in or consent to the ultimate settlement decision. 147 214 Construction Law Seminar September 2012

Endnotes 1 Large portions of this paper are directly excerpted from Chapter 3 of Construction Insurance: A Guide for Attorneys and Other Professionals (American Bar Association 2011) (Chapter 3 was co-authored by Patrick J. Wielinski). 2 While there may be slight variations among the laws of some states as to these tenets of insurance policy interpretation, for a general discussion, see Ostrager & Newman, Handbook on Insurance Coverage Disputes 1.01 (15th ed. 2010). 3 Although contract interpretation principles may vary from jurisdiction to jurisdiction, it is commonplace for a court to require the insured to carry the burden of proving a claim falls within the insuring agreement whereas the insurer must carry the burden of proving the application of any exclusions. Moreover, because most jurisdictions recognize insurance policies are contracts of adhesion, many jurisdictions have adopted insurance policy interpretation principles that resolve any doubt or ambiguity in the insured s favor. See 1 Allan D. Windt, Insurance Claims & Disputes: Representation of Insurance Companies & Insureds 4:2 (5th ed. 2007) (updated March 2010). 4 George H. Tinker, Comprehensive General Liability Insurance-Perspective and Overview, 25 Fed n. Ins. Coun. Q. 217, 222 (Spring 1975). 5 References to the standard form CGL throughout this discussion will be to the 2007 form, CG 00 01 12 07, which is the current form. ISO Properties, Inc., 2006. The provisions of that form are substantially identical to those that have been included in the standard ISO form since 1986. 6 The CGL policy also includes a separate insuring agreement for Coverage B as to personal and advertising injury liability coverage. This insuring agreement is of less importance to construction insureds. 7 125 F.3d 909 (5th Cir. 1997). Data Specialties was recently followed by the Fifth Circuit. See Federal Ins. Co. v. New Hampshire Ins. Co., 439 Fed. App x 287 (5th Cir. 2011) ( To this end, it is well settled that the use of the phrase legally obligated to pay in an insurance policy limites coverage to damages arising out of tortuous acts and does not cover contractual obligations. ). 8 982 P.2d 229 (Cal. 1999). 9 The case law that the California Supreme Court overruled was based upon a misreading of an early case, which interpreted a policy with an insuring agreement that expressly distinguished between liability imposed by law and liability by written contract. See Ritchie v. Anchor Cas. Co., 286 P.2d 1000 (Cal. Ct. App. 1955). 10 632 S.E.2d 420 (Ga. Ct. App. 2006). 11 371 F.3d 336 (6th Cir. 2004). 12 244 S.W.3d 885 (Tex. App. Dallas 2008, pet. denied). 13 See 7A Lee R. Russ & Thomas F. Segalla, Couch on Insurance 103:14 (3d ed. 2008) ( While the phrase legal liability includes liability assumed by contract, the phrases liability imposed by law, and legally obligated to pay as damages do not. ). 14 667 N.W.2d 473 (Minn. Ct. App. 2003), aff d, 679 N.W.2d 322 (Minn. 2004). 15 07 S.W.3d 729 (Tex. App. Fort Worth 2003, pet. denied). 16 2002 WL 4180008 (D. Kan. Mar. 1, 2002). 17 200 S.W.3d 651 (Tex. App. Houston [14th Dist.] 2006, pet. denied). This holding, however, may be in question. See Markel Am. Ins. Co. v. Lennar Corp., 342 S.W.3d 704 (Tex. App. Houston [14th Dist.] 2011, pet. granted). 18 George H. Tinker, Comprehensive General Liability Insurance-Perspective and Overview, 25 Fed n. Ins. Coun. Q. 217, 265 (Spring 1975). It should be noted that, despite limited success with the breach-of-contract versus tort dichotomy as to the legally obligated formulation in the insuring agreement, insurers more frequently also have raised the same type of argument as to the definition of occurrence. That issue is addressed below. 19 See Owners Ins. Co. v. Shep Jones Const., Inc., 2012 WL 1642169 (N.D. Ala. May 3, 2012) (holding that a breach of contract does not constitute an occurrence under a CGL policy). Latest Developments in CGL Coverage for Construction Defects (2012 Update) Shidlofsky 215

20 200 S.W.3d 651 (Tex. App. Houston [14th Dist] 2006, pet. denied). As noted above, the court of appeals arguably limited the holding in a subsequent appeal. See Markel Am. Ins. Co. v. Lennar Corp., 342 S.W.3d 704 (Tex. App. Houston [14th Dist.] 2011, pet. granted). 21 786 F.2d 22 (1st Cir. 1986). 22 26 F.3d 581 (5th Cir. 1994) (applying Louisiana law). 23 253 F.3d 878 (5th Cir. 2001) (applying Texas law). 24 85 S.W.2d 185 (Tex. 2002). 25 85 S.W.2d 185, 192 93; Homes Appleman on Insurance 117.5 at 392 (2000). 26 The divergence in views of the occurrence requirement is one reason insureds need to carefully analyze which state s law will apply to a coverage dispute. Choice of law can be crucial in determining coverage and needs to be analyzed from the very outset of a claim. It oftentimes is assumed that the law of the state where the construction defect claim arises will apply to the coverage dispute. That, however, is not always the case especially when the insured is from a different state. Jurisdictions apply different tests to determine choice of law. Some states apply the most-significantrelationship test, some apply a lex loci contractus approach, and still others apply a variation from the Restatement (second) Conflict of Laws. Although the tests vary, an important and sometimes determinative factor is where the policy was issued to the insured. Typically, at least with respect to liability policies, where the policy was issued to the insured is more important than where the loss occurred. Additionally, some states have specific insurance code provisions that address the choice-of-law issue. Likewise, some policies also have specific choice-of-law provisions. 27 Lee Builders, Inc. v. Farm Bureau Mut. Ins. Co., 137 P.3d 486, 491 (Kan. 2006). 28 242 S.W.3d 1 (Tex. 2007). 29 Lamar Homes, 242 S.W.3d at 5. 30 Id. at 7. 31 Id. 32 Id. 33 Id. at 11 13. The court properly rejected Mid-Continent s argument that the insured was using the subcontractor exception to create coverage. Id. at 14 ( [W]e have not said that the subcontractor exception creates coverage; rather, it reinstates coverage that would otherwise be excluded under the your-work exclusion. ). 34 Id. at 13 ( Therefore, any preconceived notion that a CGL policy is only for tort liability must yield to the policy s actual language. ). See also Ellen S. Pryor, The Economic Loss Rule and Liability Insurance, 48 Ariz. L. Rev. 905, 917 (2006). 35 Lamar Homes, 242 S.W.3d at 8. If foreseeability means no coverage, then CGL coverage is illusory. Insurance premiums are based on actuarial risk. The reason why consumers buy insurance is because of foreseeable risks. If CGL insurance only protected against unforeseeable risks, then it would be of little use to contractors. See Travelers Indemnity Co. of Am. v. Moore & Assocs., Inc., 216 S.W.3d 302, 308 (Tenn. 2007) ( If foreseeability is determined from the negligent completion of the project, then the negligent acts of the insured will almost never be accidents because, by definition, negligence requires that damages be foreseeable. ). 36 J.S.U.B., 979 So.2d at 875, 877-880. 37 Id. at 883. 38 Id. at 886 87. 39 Id. at 887 88. 40 Architex Ass n, Inc. v. Scottsdale Ins. Co., 27 So.3d 1148 (Miss. 2010) ( By failing to consider the policy as a whole, the circuit court erred in its occurrence analysis. Under Scottsdale s CGL policy, the term occurrence cannot be construed in such a manner as to preclude coverage for unexpected or unintended property damage resulting from work performed on [Architex s] behalf by a subcontractor. ). 41 Auto Owners Ins. Co., Inc. v. Newman, 684 S.E.2d 541 (S.C. 2009) ( Furthermore, although the subcontractor s negligent application of the stucco does not on its own constitute an occurrence, we find that the continuous moisture intrusion resulting from the subcontractor s negligence is an occurrence as defined by the CGL policy. ). The hold- 216 Construction Law Seminar September 2012

ing from the South Carolina court can be considered a middle-ground approach. The court held that damage to the work itself is not an occurrence, but damage beyond the defective work itself is an occurrence even if the damage is to the same project. The middle-ground approach is not grounded in the definition of occurrence as it still reads something into the definition that simply is not there (i.e., a requirement of damage beyond the work itself). Even so, other courts have adopted it as an apparent compromise between the two diverging positions. See e.g., French v. Assurance Co. of Am., 448 F.3d 693 (4th Cir. 2006). 42 Travelers Indem. Co. of Am. v. Moore & Assocs., Inc., 216 S.W.3d 302, 308 (Tenn. 2007) ( We decline to adopt a construction of accident which would so drastically limit the coverage under a CGL. ). 43 Lee Builders, Inc. v. Farm Bureau Mut. Ins. Co., 137 P.3d 486, 495 (Kan. 2006) ( The damage in the present case is an occurrence an even more expansive coverage term than accident because faulty materials and workmanship provided by Lee s subcontractors caused continuous exposure of the Steinberger home to moisture. ). 44 Am. Family Mut. Ins. Co. v. Am. Girl, Inc., 673 N.W.2d 73, 73 74 (Wis. 2004) ( If, as American Family contends, losses actionable in contract are never CGL occurrences for purposes of the initial coverage grant, then the business risk exclusions are entirely unnecessary. ). 45 Sheehan Constr. Co., Inc. v. Continental Cas. Co., 935 N.E.2d 160 (Ind. 2010). 46 Essex Ins. Co. v. Holder, 465 S.W.3d 456 (Ark. 2008). Even though Holder represents the view that faulty workmanship is not an occurrence, the facts of Holder do not reveal whether there was any actual property damage caused by defective work. The court s recitation of the facts indicates the court was dealing with the failure to complete work, delays in construction, and the failure to procure qualified subcontractors. See id. at 456 57. 47 Kvaerner Metals Div. of Kvaerner U.S., Inc. v. Commercial Union Ins. Co., 908 A.2d 888 (Pa. 2006). 48 Group Builders, Inc. v. Admiral Ins. Co., 231 P.3d 67 (Hawaii App. 2010). 49 Cincinnati Ins. Co. v. Motorists Mut. Ins. Co., 306 S.W.3d 69 (Ken. 2010). 50 See also Travelers Indem. Co. v. Miller Bldg. Corp., 97 F. App x. 431, 434 (4th Cir. 2004) (applying North Carolina law); Burlington Ins. Co. v. Oceanic Design & Constr. Inc., 383 F.3d 940, 948 49 (9th Cir. 2004) (applying Hawaii law); Aquatectonics, Inc. v. Hartford Cas. Co., 2012 WL 1020313 (E.D.N.Y. March 26, 2012); Nautilus Ins. Co. v. JDL Development, 2012 WL 1156917 (N.D. Ill. April 4, 2012); Acuity v. Burd & Smith Constr., Inc., 721 N.W.2d 33, 39 (N.D. 2006); Corder v. William W. Smith Excavating Co., 556 S.E.2d 77, 82 (W. Va. 2001). 51 Compare L-J v. Bituminous Fire & Marine Ins. Co., 621 S.E.2d 33 (S.C. 2005) (finding no occurrence for damage arising from faulty workmanship), with Auto-Owners Ins. Co. v. Newman, 684 S.E.2d 541 (S.C. 2009) (finding an occurrence when the faulty workmanship damaged other non-defective portions of the work). The issue in South Carolina got even more confusing, which ultimately culminated in yet another decision that sought to clarify both L-J and Newman. See Crossman Communities of North Carolina v. Harleysville Mutual Ins. Co., 2011 WL 3667598 (S.C. Aug. 22, 2011). Simply put, the issue continues to be debated across the country. For a recent case discussing the occurrence issue and the split in authority, see Greystone Construction, Inc. v. National Fire & Marine Insurance Company, 661 F.3d 1272 (10th Cir. 2011). 52 See, e.g., Town & Country Property, L.L.C. v. Amerisure Ins. Co., 2012 WL 2477925 (Ala. June 29, 2012) (not yet release for publication); Greystone Const., 661 F.3d at 1282 83 (discussing the recent trend of finding an occurrence where the damage extends to nondefective property). 53 Or an excellent overview of case law across the country, including 50-state surveys, see Randy Maniloff & Jeffrey Stempel, General Liability Insurance Coverage: Key Issues in Every State (2nd Ed. 2012). 54 Many professional liability policies issued to architects and engineers are written on a claims-made basis. The trigger analysis for claims-made policies is straightforward; the policy in place at the time a claim is first made is the one (and typically the only one) that is triggered, provided that the claim is reported in a timely manner under the terms of the policy. 55 It is dangerous to place labels on the different trigger theories because courts apply them in a different manner. What one court calls a manifestation trigger may be what another court calls an exposure trigger, and vice versa. See Don s Building Supply, Inc. v. OneBeacon Ins. Co., 267 S.W.3d 20, 27 28 (Tex. 2008). Moreover, it is important to note that the insurance industry has responded to the different triggering theories by modifying policy language. Most notably, Latest Developments in CGL Coverage for Construction Defects (2012 Update) Shidlofsky 217

after a decision that it viewed to be unfavorable, the insurance industry adopted what became known as the Montrose endorsement so as to control coverage in loss-in-progress and known-loss situations. 56 [G]eneralizations as to the relative support for each approach are somewhat shaky in view of the odd fusion of state and federal law that characterize this question of policy interpretation. 2 Jeffrey W. Stempel, Stempel on Insurance Contracts 14.09[B] (3rd ed. 2005 & Supp. 2009). 57 Bruner and O Connor 11.182; see also 2 Jeffrey W. Stempel, Stempel on Insurance Contracts 14.09[B] (3rd ed. 2005 & Supp. 2009) ( The manifestation theory is less widely embraced, at least for liability insurance (although it is the norm for determining which first-party property policy is triggered). ). 58 See Gelman Scis., Inc. v. Fid. & Cas. Co. of N.Y., 572 N.W.2d 627, 623 (1998) ( The manifestation trigger simply is not supported by the policy language. ), reh g granted on other grounds, 576 N.W.2d 168 (Mich. 1998); Kief Farmers Coop. Elevator Co. v. Farmland Mut. Ins. Co., 534 N.W.2d 27, 35 36 (N.D. 1995) (noting that [t]he policy language does not even hint that property damage must be known to anyone in order to trigger coverage, and that [w]e will not rewrite this contract of insurance to exclude coverage on the basis of a manifestation theory ). 59 7 Lee R. Russ & Thomas F. Segalla, Couch on Insurance 102:22 (3rd Ed. 2006 & Supp. 2009) ( Among the courts which have considered delayed manifestation of injury cases, there is a marked difference of opinion, sometimes within the same jurisdiction, as to when coverage is triggered. ). 60 See, e.g., Guar. Nat l Ins. Co. v. Azrock Indus., Inc., 211 F.3d 239, 243 248 (5th Cir. 2000) (discussing various trigger theories and concluding that different trigger theories would apply to property damage and bodily injury). One case that seemingly applies an exposure trigger is American Employer s Insurance Co. v. Pinkard Construction Co., 806 P.2d 954 (Colo. Ct. App. 1990). 61 See Don s Building, 267 S.W.3d at 29. 62 See, e.g., EnergyNorth Natural Gas, Inc. v. Underwriters at Lloyd s, 848 A.2d 715, 718 (N.H. 2004) (recognizing little difference between injury-in-fact and exposure theories when contamination begins almost immediately after release of hazardous materials). 63 Don s Building, 267 S.W.3d at 29 30. 64 Id. at 20; Transcon. Ins. Co. v. W.G. Samuels Co., 370 F.3d 755, 758 (8th Cir. 2004) (applying Kansas law); Trizec Props., Inc. v. Biltmore Constr. Co., 767 F.2d 910, 813 (11th Cir. 1985) (applying Florida law); Hoang v. Assurance Co. of Am., 149 P.3d 798, 800 01 (Colo. 2007). 65 667 F.2d 1034 (D.C. Cir. 1981). 66 See Joe Harden Builders, Inc. v. Aetna Cas. & Sur. Co., 486 S.E.2d 89 (S.C. 1997); Century Indem. Co. v. Golden Hills Builders, Inc., 348 S.E.2d 344 (S.C. 2002); Gruol Constr. Co., Inc. v. Ins. Co. of N. Am., 524 P.2d 427 (Wash. Ct. App. 1974). 67 65 N.W.2d 122 (Minn. 1954). 68 See Acadia Ins. Co. v. Peerless Ins. Co., 679 F. Supp. 2d 229 (D. Mass. 2010); Webster v. Acadia Ins. Co., 934 A.2d 567 (N.H. 2007); Lamar Homes, Inc. v. Mid-Continent Cas. Co., 242 S.W.3d 1, 10 (Tex. 2007) ( These allegations of cracking sheetrock and stone veneer are allegations of physical injury to tangible property. ); Am. Family Mut. Ins. Co. v. Am. Girl, Inc., 673 N.W.2d 65, 75 (Wis. 2004) ( The sinking, buckling, and cracking of the warehouse as a result of the soil settlement qualifies as physical injury to tangible property. ). 69 See Traveler s Ins. Co. v. Eljer Mfg., Inc., 757 N.E.2d 481 (Ill. 2001); see also Esicorp, Inc. v. Liberty Mut. Ins. Co., 266 F.3d 859, 862 (8th Cir. 2001) (holding that defective steel pipe sections welded into pipe system did not constitute physical injury to tangible property); Nat l Union Fire Ins. Co. of Pa. v. Terra Industries, Inc., 216 F. Supp. 2d 899, 917 (N.D. Iowa 2002) (holding that carbonated beverages suffered property damage as a result of introduction of carbon dioxide containing benzene); F&H Constr. v. ITT Hartford Ins. Co. of Midwest, 12 Cal. Rptr. 3d 896 (Cal. 2004) ( [T] he prevailing view is that the incorporation of a defective component or product into a larger structure does not constitute property damage unless and until the defective component causes physical injury to tangible property in at least some other part of the system. ); see also Tweet/ Garot-August Winter, LLC v. Liberty Mut. Fire Ins. Co., 2007 WL 445988 (E.D. Wis. Feb. 07, 2007) (collecting cases). 218 Construction Law Seminar September 2012

70 See Guerin Contractors, Inc. v. Bituminous Cas. Corp., 636 S.W.2d 638, 641 (Ark. Ct. App. 1982); Gibson & Assoc., Inc. v. Home Ins. Co., 966 F. Supp. 2d 468, 477 (N.D. Tex. 1997). Other examples exist when, for example, a component part causes a loss of use to the product into which it was incorporated. See, e.g., Anthem Electronics, Inc. v. Pacific Employers Ins. Co., 302 F.3d 1049, 1057 (9th Cir. 2002). Similarly, the second prong may be satisfied if a piece of equipment fails and that causes a loss of use beyond the piece of equipment itself. See, e.g., Hartzell Indus., Inc. v. Federal Ins. Co., 168 F. Supp. 2d 789, 795 (S.D. Ohio 2001). For an excellent discussion of these cases, as well as a historical perspective of the property damage definition, see James Duffy O Connor, Construction Defects: Property Damage and the Commercial General Liability Policy, The Construction Lawyer 11 (Spring 2004). 71 Fid. & Deposit Co. v. Hartford Cas. Ins. Co., 189 F. Supp. 2d 1212, 1220 (D. Kan. 2002). 72 See, e.g., R.N. Thompson & Assocs., Inc. v. Monroe Guar. Ins. Co., 686 N.E.2d 160, 162 64 (Ind. Ct. App. 1997); Acadia Ins. Co. v. Peerless Ins. Co., 679 F. Supp. 2d 229, 240 (D. Mass. 2010) ( [F]or purposes of a CGL policy, covered property damage is alleged only when property other than the insured s work product has suffered harm. ), and United States Fire Ins. Co. v. J.S.U.B., 979 So.2d 871, 889 (Fla. 2007) ( [O]ther courts have also recognized that there is a difference between a claim for the costs of repairing or removing the defective work, which is not a claim for property damage, and a claim for the costs of repairing damage caused by the defective work, which is a claim for property damage. ). 73 984 So.2d 1241 (Fla. 2008). 74 See Amerisure Mutual Ins. Co. v. Auchter Co., 673 (D.3d 1294 (11th Cir. 2012) (finding no property damage because the only damages at issue were damages to the roof and not to the rest of the conference center). 75 See Nat l Union Fire Ins. Co. of Pittsburgh, Pa. v. Puget Plastics Corp., 532 F.3d 398, 403 (5th Cir. 2008) (discussing damages because of property damage ); Home Assurance Co. v. Libbey-Owens-Ford Co., 786 F.2d 22 (1st Cir. 1986) (finding coverage for consequential losses stemming from physical injury to windows even though there was no coverage for the repair or replacement of the windows themselves). Likewise, courts have rejected the economic loss rule as a test of whether the property damage requirement has been satisfied. See Am. Family Mut. Ins. Co. v. Am. Girl, Inc., 673 N.W.2d 65, 75 (Wis. 2004) ( The economic loss doctrine is a remedies principle. It determines how a loss can be recovered in tort or in contract/warranty law. It does not determine whether an insurance policy covers a claim, which depends instead upon the policy language. ); United States Fire Ins. Co. v. J.S.U.B., 979 So.2d 871, 889 n.11 (Fla. 2007); Lamar Homes, Inc. v. Mid-Continent Cas. Co., 242 S.W.3d 1, 12 (Tex. 2007). 76 See Donald S. Malecki & Arthur L. Flitner, Commercial General Liability 7 (7th ed. 2001) ( In light of [the because of ] wording, all damages flowing as a consequence of bodily injury or property damage would be encompassed by the insurer s promise, subject to any applicable exclusion or condition. This includes purely economic damages, as long as they result from otherwise covered bodily injury or property damage. ). 77 See Lamar Homes, 242 S.W.3d at 12 13. 78 See Missouri Terrazzo Co. v. Iowa Nat l Mut. Ins. Co., 740 F.2d 647 (8th Cir. 1984); see also Mid-Continent Cas. Co. v. Academy Development, Inc., 2012 WL 1382459 (5th Cir. April 20, 2012) (finding diminution in value to be damages because of property damage ). 79 For a more detailed discussion of the development of CGL forms as applied to the construction industry dating back to the 1950s, see Patrick J. Wielinski, Insurance for Defective Construction Chs. 1, 11 (2d ed. 2005). 80 21 Eric Mills Holmes, Holmes Appleman on Insurance 129.1[C] (2d ed. 2002). 81 George H. Tinker, Comprehensive General Liability Insurance Perspective and Overview, 25 Fed n. Ins. Coun. Q. 217, 226 (Spring 1975). 82 979 So.2d 871 (Fla. 2007). 83 242 S.W.3d 1 (Tex. 2007). 84 Id. at 11. 85 See Essex Builders Group, Inc. v. Amerisure Ins. Co., 429 F. Supp. 2d 1274 (M.D. Fla. 2005); Fidelity & Deposit Co. of Md. v. Hartford Cas. Ins., 189 F. Supp. 2d 1212 (D. Kan. 2002); Am. Oil Co. v. L. A. Davidson, Inc., 290 N.W.2d 144 (Mich. Ct. App. 1980). See also Joanne Brooks, et al., The Importance of Insurance Coverages for Sureties, ABA Forum on Latest Developments in CGL Coverage for Construction Defects (2012 Update) Shidlofsky 219

the Construction Industry/Tips Fidelity & Surety Law Committee Joint Program Mid-Winter Meeting (2005). 86 261 S.W.3d 456 (Ark. 2003). 87 354 F. Supp. 2d 917 (E.D. Ark. 2005). 88 See, Lexicon, Inc. v. ACE American Ins Co, 634 F.3d 423 (8th Cir. 2010). 89 673 N.W.2d 65, 80-81 (2004). 90 See also Federated Mut. Ins. Co. v. Grapevine Inc., 197 F.3d 720, 726 (5th Cir. 1999) (exclusion denies coverage when the insured assumes responsibility for the conduct of a third party and not its own conduct); Olympic, Inc. v. Providence Washington Ins. Co. of Alaska, 648 P.2d 1008, 1011 (Alaska 1982) (liability assumed by insured in a contract refers to liability incurred when one promises to indemnify or hold harmless another, and it does not refer to liability that results from breach of contract). 91 See Gilbert Tex. Constr., L.P. v. Underwriters at Lloyd s London, 327 S.W.3d 118 (Tex. 2010) (exclusion applies even if the insured does not assume the liability of another and is sued only for its own breach of contract). 92 See Ewing Const. Co. v. Amerisure Ins. Co., 2012 WL 2161134 (5th Cir. June 15, 2012) (pending on rehearing); see also Assurance Co. of Am. v. Admiral Ins. Co., 2011 WL 1897589 (S.D. Ala. May 18, 2011); Owners Ins. Co. v. Shep Jones Const., Inc., 2012 WL 1642169 (N.D. Ala. May 3, 2012). 93 See, e.g., Dryden Oil Co. of New England, Inc. v. Travelers Indemnity Co., 91 F.3d 278, 284 (1st Cir. 1995) (recognizing the salutary effect of denying liability coverage to an insured for its owned, occupied, or rented property). 94 88 P.3d 986 (Wash. Ct. App. 2004). 95 See Borden, Inc. v. Affiliated FM Ins. Co., 682 F. Supp. 927 (S.D. Ohio 1987), aff d, 865 F.2d 1267 (6th Cir. 1989), cert. denied, 493 U.S. 817 (1989). 96 270 Cal. Rptr. 719 (Cal. Ct. App. 1990). 97 The 1973 version of the exclusion is subject to an exception for liability under a written sidetrack agreement. 98 612 S.W.2d 413 (Mo. Ct. App. 1981). 99 799 S.W.2d 308 (Tex. App. Houston [1st Dist.] 1990, writ denied). 100 818 So.2d 1030 (La. Ct. App. 2002). 101 79 S.W.3d 687 (Tex. App. Austin 2002, no pet.). 102 557 F.3d 207 (5th Cir. 2009). 103 ISO Circular General Liability GL79-12 (January 29, 1979). 104 The importance of the distinction between ongoing operations and the products-completed operations hazard is discussed below in connection with Exclusion l, the your-work exclusion. 105 686 S.E.2d 824 (Ga. Ct. App. 2009). 106 557 F.3d 207 (5th Cir. 2009). 107 Id. at 215. 108 538 F.3d 365 (5th Cir. 2008). 109 See also Roaring Lion, LLC v. Nautilus Ins. Co., 2011 WL 3956132 (D. Mont. July 16, 2011). 110 See, e.g., Lafayette Ins. Co. v. Peerboom, 813 F. Supp. 2d 823, 834 (S.D. Miss. 2011); Jet Line Services, Inc. v. American Employers, Ins. Co., 537 N.E.2d 107, 111 (Mass. 1989). 111 Maureen McLendon, et al., Commercial Liability Insurance (IRMI 2003). 112 Jeffrey W. Stempel, Stempel On Insurance Contracts 14.13(D) at 14-224.8 (3d ed. supp. 2007). 113 Jeffrey P. Aiken & Tamara Hayes O Brien, Contractor Coverage for Construction Claims under CGL Policies: The Basics and Beyond, 44 Tort Trial & Ins. Prac. L. J. 993, 1010 (Spring/Summer 2009). 114 979 So.2d 871 (Fla. 2007). 115 242 S.W.3d 1, 11 (Tex. 2007). 220 Construction Law Seminar September 2012

116 216 S.W.3d 308, 310 (Tenn. 2007). 117 27 So.3d 1148 (Miss. 2010). 118 673 N.W.2d 65, 83 (Wis. 2004). 119 684 S.E.2d 541 (S.C. 2009). 120 908 A.2d 888 (Pa. 2006). 121 52 F. Supp. 2d 569 (E.D. N.C. 1999), aff d, 213 F.3d 634 (4th Cir. 2000). 122 2010 WL 79479 (E.D. Ark. Jan. 07, 2010), aff d in part, rev d in part, 634 F.3d 423 (8th Cir. 2011). 123 The Supreme Court of Texas, in Lamar Homes, Inc. v. Mid-Continent Casualty Co., 242 S.W.3d 1, 12 (Tex. 2007), recognized the existence of this endorsement and its effects on coverage. See also VRV Development L.P. v. Mid-Continent Cas. Co., 630 F.3d 451, 455 n.5 (5th Cir. 2011); Builders Mutual Ins. Co. v. Kalman, 2009 WL 4807003 (D.S.C. Dec. 8, 2009). 124 The insurance industry continuously has grappled with the diminution in value concept as a measure of damages for property that has not been physically injured under the CGL policy, particularly under the definition of property damage. In 1973 ISO added the requirement that the property be physically injured under the definition of property damage in the policy. In addition, it has attempted to address the issue through predecessor exclusions to the impaired property exclusion. 125 523 F. Supp. 2d 524 (W.D. Tex. 2007). 126 516 F.3d 674 (8th Cir. 2008). 127 Standard Fire Ins. Co. v. Chester-O Donley & Assoc., Inc., 972 S.W.2d 1 (Tenn. Ct. App. 1998). 128 Id. 129 197 F.3d 720 (5th Cir. 1999). 130 2009 WL 1448967 (S.D. Miss. May 22, 2009). 131 498 S.W.2d 676 (Tex. 1973). 132 Id at 678. 133 Chester-O Donley, 972 S.W.2d 1 (finding that the recall exclusion does not apply to claims involving losses resulting from failure of insured s defective duct work when they are not based upon withdrawal or recall of the insured s own product or work). 134 684 S.E.2d 541 (S.C. 2009). 135 Maureen McClendon, Jack Gibson and W. Jeffrey Woodward, Commercial General Liability Insurance (IRMI), available at http://www.irmi.com/online/cli/default.aspx. 136 Compare PAJ, Inc. v. Hanover Ins. Co., 243 S.W.3d 630 (Tex. 2008) (requiring a showing of prejudice to defeat coverage because of late notice); Am. Justice Ins. Reciprocal v. Hutchison, 15 S.W.3d 811 (Tenn. 2000) (same); Cooper v. Gov t Employees Ins. Co., 237 A.2d 870 (N.J. 1967) (same); New York Cent. Mut. Fire Ins. Co. v. Ward, 833 N.Y.S.2d 182 (N.Y. App. Div. 2007) (requiring prejudice be shown with regard to failure to provide a proof of loss), with Westbrook Ins. Co. v. Jeter, 117 F. Supp. 2d 139, 141 (D. Conn. 2000) (no prejudice requirement with regard to policy s breach of cooperation provision); Morris v. Aetna Life Ins. Co., 287 S.E.2d 388 (Ga. Ct. App. 1981) (finding that an insured s failure to submit to a medical examination constitutes a breach of contract and prevents any recovery upon the contract). 137 Lee R. Russ & Thomas F. Segalla, 13 Couch on Insurance 186:14 (3d ed. 2005) (updated 2010). A majority of jurisdictions require some form of prejudice showing before an insurer can deny coverage on late notice grounds. Ostrager & Newman, Handbook on Insurance Coverage Disputes 4.02[b] (9th ed. 1998) (citing cases). 138 At least one jurisdiction recognizes that prejudice must still be shown in the claims-made context if the notice is late but within the claims-made period or extended reporting period. See Prodigy Commc ns Corp. v. Agric. Excess & Surplus Ins. Co., 288 S.W.3d 374 (Tex. 2009) (finding that notice requirement was not an essential part of the bargainedfor exchange under the policy and, thus, failure to comply with the requirement in the absence of prejudice does not defeat coverage under a claims-made policy); see also Fin. Indus. Corp. v. XL Specialty Ins. Co., 285 S.W.3d 877 (Tex. 2009) (finding that notice within a claims-made policy period is sufficient unless the insurer shows that it was prejudiced by any delay). Latest Developments in CGL Coverage for Construction Defects (2012 Update) Shidlofsky 221

139 In addition to finding justification of this rule in the policy language, the rule prohibiting recovery of pre-tender defense costs also has been supported by application of the no-voluntary-assumption condition in the policy. See Ingalls Shipbuilding v. Federal Ins. Co., 410 F.3d 214 (5th Cir. 2005) (holding that additional insured not entitled to pre-tender defense costs notwithstanding fact that insurer could not demonstrate prejudice); Century Indem. Co. v. Aero-Motive Co., 318 F. Supp. 2d 530 (W.D. Mich. 2003) (refusing to permit recovery of pre-tender defense costs because it would transform the insurer s defense obligation into a duty of reimbursement). 140 Quorum Health Res., LLC v. Maverick County Hosp. Dist., 308 F.3d 451, 468 (5th Cir. 2002). 141 See id. 142 See Lafarge Corp. v. Hartford Cas. Ins. Co., 61 F.3d 389, 397 (5th Cir. 1995). 143 Scott C. Turner, Insurance Coverage of Construction Disputes 5:2 (updated June 2012). 144 See id. 145 See, e.g., Hernandez v. Gulf Group Lloyds, 875 S.W.2d 691, 691 (Tex. 1994). 146 Motiva Enters., LLC v. St. Paul Fire & Marine Ins. Co., 445 F.3d 381, 386 (5th Cir. 2006). 147 Id. 222 Construction Law Seminar September 2012

Is Risk Transfer Risky Business? Contractual Indemnification, Additional Insureds, and OCIP/CCIP in the Construction Context Lisa J. Black Traub Lieberman Straus & Shrewsberry LLP 7 Skyline Drive Hawthorne, NY 10532 (914) 347-2600 x763 lblack@traublieberman.com

Lisa J. Black is a partner in the New York office of Traub Lieberman Straus & Shrewsberry LLP. She is a seasoned insurance defense attorney handling a variety of litigation in both Federal and New York state courts. She specializes in the defense of New York Labor Law and construction related matters, premises liability, insurance coverage litigation and general negligence matters. She also has significant municipal experience as a former Assistant Corporation Counsel for the New York City Law Department where she defended the New York City Police Department and Department of Corrections in Federal Civil Rights matters. Ms. Black is a frequent lecturer on topics of defense and insurance coverage. The author would like to acknowledge, with gratitude, the contributions to this article by Danielle A. Noel, currently a student at the Benjamin N. Cardozo School of Law.

Is Risk Transfer Risky Business? Contractual Indemnification, Additional Insureds, and OCIP/CCIP in the Construction Context Table of Contents I. Fundamentals of Risk Transfer...227 A. Contractual Indemnification...227 B. Additional Insureds...227 C. Wrap-Up Programs...227 II. Statutory Restrictions on Contractual Indemnification...228 A. New York...228 B. California...229 C. Colorado...230 D. Illinois...230 E. Rhode Island...231 III. Circumventing Anti-Indemnity Laws...231 A. Additional Insured Endorsements...231 B. A Shift Toward Wrap-ups?...234 IV. Conclusion...235 Is Risk Transfer Risky Business? Contractual Indemnification, Additional... Black 225

Is Risk Transfer Risky Business? Contractual Indemnification, Additional Insureds, and OCIP/CCIP in the Construction Context In an industry fraught with personal injury and property damage litigation, developers and general contractors rely on a variety of devices, such as contractual indemnification, additional insured endorsements, and wrap-up programs to protect against the cost of litigation. Terry Galganski, The Insurance Exceptions of the Missouri Anti-Indemnity Statute (Part I), 58 J. Mo. B. 86, 88-89 (Mar./Apr. 2002). Across the country, however, states are increasingly enacting and expanding anti-indemnification statutes, which severely limit the protection offered by indemnification agreements. In the face of these limitations, contractors are increasingly seeking risk transfer through additional insured endorsements and wrap-up agreements. I. Fundamentals of Risk Transfer A. Contractual Indemnification Contractual indemnification is a risk-allocating tool, where a subcontractor agrees to bear the financial risk of loss or damage incurred by the general contractor, typically for work performed by the subcontractor. Indemnification agreements can either be full, where the indemnitor agrees to pay for loss regardless of fault (including that of the indemnitee), or partial, where the indemnitor is only responsible for the cost of its own liability. Andrew A. Beerworth, Emerging Trends in Construction Indemnity and Insurance Law, 58 R.I. B.J. 17 (Mar./Apr. 2010). B. Additional Insureds When a landowner decides to commence a construction project or lease property, he typically requires the contractor or lessee to name him as an additional insured under a general liability insurance policy. Robert B. Hille, et al., The Contractual Relationship, 1-3 Appleman on Insurance 3.03A. Additional insureds are typically added to an insurance policy by means of an endorsement. Pursuant to the endorsement, the insurer is obligated to defend and cover additional insureds as if they were the named insureds. Paul E.B. Glad, William T. Barker & Michael Barnes, Introduction to Liability Insurance, 3-16 Appleman on Insurance 16.05. C. Wrap-Up Programs Wrap-up programs provide insurance coverage for specified participants in a single construction project or series of projects. Ruth Kochenderfer & James P. Bobotek, Construction Wrap-Up Policies: An Overview and Analysis of Selected Coverage Issues, New Appleman On Insurance: Current Critical Issues In Insurance Law (Winter 2010). The two primary forms of wrap-up programs are owner-controlled insurance programs (OCIPs) and contractor-controlled insurance programs (CCIPs). As their names suggest, these programs are purchased by either the property owner/developer or the general contractor and cover all enrolled parties of a project, from the owners through the subcontractors. Meryl Lieberman and Brian Margolies, It s A Wrap! Or Is It? Fundamentals and Emerging Issues regarding Wrap-up Insurance, DRI Insurance Coverage and Practice Symposium (Dec. 2011). Wrap-up programs reduce the expense of coverage disputes by eliminating the need for contractual indemnification and additional insured endorsements in favor of a single, centralized policy. See John Loveless, Construction Insurance: Do You Only Get What You Pay For?, 78 APR N.Y. St. B.J. 10, Is Risk Transfer Risky Business? Contractual Indemnification, Additional... Black 227

10 (Mar./Apr. 2006); Va. Sur. Co. v. Adjustable Forms Inc., 888 N.E.2d 733, 737 (Ill. App. Ct. 1st Dist. 2008), citing Pride v. Liberty Mut. Ins. Co., 2007 U.S. Dist. LEXIS 40833 at *4-5 (E.D. Wis. June 5, 2007). II. Statutory Restrictions on Contractual Indemnification Full indemnification agreements highlight the tension between preserving the freedom to contract, and protecting the public interest. Clark C. Johnson, Note, Collapsing the Legal Impediments to Indemnification, 69 Ind. L.J. 867, 870 (Summer 1994). On the one hand, parties should be free to allocate financial burdens however they chose. On the other hand, the absence of accountability or economic incentive is a moral hazard because it increases the chances of injury to innocent third-parties. Beerworth, Emerging Trends, supra, at 17-18. To address this moral hazard, a number of states have developed anti-indemnity statutes or restrictions on indemnity in the construction context. A sampling of various statutes relating to indemnity agreements and the court s treatment of these agreements in the construction context is addressed below. A. New York New York does not permit indemnification for an indemnitee s own negligence, but does permit partial indemnification. N.Y. Gen. Oblig. Law 5-322.1. The statute provides that: [a] covenant, promise, agreement or understanding in, or in connection with a contract or agreement relative to the construction, alteration, repair or maintenance of a building... purporting to indemnify or hold harmless the promisee against liability for damage arising out of bodily injury to persons or damage to property contributed to, caused by or resulting from the negligence of the promisee, his agents or employees, or indemnitee, whether such negligence be in whole or in part, is against public policy and is void and unenforceable. In Itri Brick & Concrete Corp. v. Aetna Cas. & Sur. Co., 680 N.E.2d 1200, 1205 (N.Y. 1997), the Court of Appeals, New York s highest court, held that the New York State Legislature enacted 5-322.1 to: prevent a prevalent practice in the construction industry of requiring subcontractors to assume liability by contract for the negligence of others. The Legislature concluded that such coercive bidding requirements unnecessarily increased the cost of construction by limiting the number of contractors able to obtain the necessary hold harmless insurance, and unfairly imposed liability on subcontractors for the negligence of others over whom they had no control. The agreements also needlessly created expensive double coverage for hold harmless or general liability insurance. In Itri Brick, a contractor sought recovery against a subcontractor to the extent plaintiff s recovery was not attributable to the contractors negligence. The Court of Appeals decided that the wording of the indemnity provision was overbroad as it attempted to contract away the indemnitees negligence; thus, the agreement was unenforceable. See also Pardo v. Bialystoker Ctr. & Bikur Cholim, Inc., 781 N.Y.S.2d 339, 342 (App. Div. 1st Dep t 2004) ( full indemnification is void and unenforceable under General Obligation Law 5-322.1 where the indemnitee is found to be at least partially negligent. ). Notably, in Itri, the indemnity provision did not have the appropriate savings language, such as to the fullest extent permitted by law. The court suggested that a different result could have been found if the indemnification clause had called for partial as opposed to full or broad indemnity. Itri Brick, 680 N.E.2d at 1204. In Brooks v. Judlau Contr., Inc., 898 N.E.2d 549 (N.Y. 2008), the Court of Appeals answered the question that Itri left open and formally established the doctrine of partial indemnification. Namely, the court was asked to rule as to whether 5-322.1 allows a general contractor who has been found to be partially at fault to enforce an indemnification provision against its subcontractor for that portion of damages attributable to the 228 Construction Law Seminar September 2012

negligence of the subcontractor. The court concluded that the statute does permit a partially negligent general contractor to seek contractual indemnification from its subcontractor so long as the indemnification provision does not purport to indemnify the general contractor for its own negligence. If so, the provision is enforceable and does not violate 5-322.1. See also Dutton v. Pankow, 745 N.Y.S.2d 520 (N.Y. App. Div. 1st Dep t 2002) (holding that phrase to the fullest extent permitted by law was limiting, rather than broad indemnity language, and thus, was sufficient to save indemnity provision which essentially converted to partial indemnity). In New York, for indemnity provisions to be enforceable, the indemnitee must not seek to be indemnified for its own negligence, and the contract must have savings language to the fullest extent permitted by law or similar language that seeks to except out the indemnitee s own negligence. In cases where there is a question of the general contractor s own (even 1%) negligence, appropriate savings language may result in fewer agreements being voided entirely and more provisions enforced, but with conditional orders of indemnity requiring apportionment of liability at trial. B. California California has recently expanded its anti-indemnity statute to include private commercial projects. 2011 Cal. S.B. 474. Cal. Civ. Code 2782 (Deering 2011) provides: Provisions, clauses, covenants, or agreements contained in, collateral to, or affecting any construction contract and that purport to indemnify the promise against liability for damages... arising from the sole negligence or willful misconduct of the promise... are against public policy and are void and unenforceable. The California legislature enacted 2782 to ensure for public policy reasons that indemnitees in the construction industry could not seek contractual indemnification for their own negligence or willful misconduct. Gonazles v. R. J. Novick Constr. Co., Inc., 575 P.2d 1190 (Cal. 1978); Whitmire v. H.K. Ferguson Co., 68 Cal. Rptr. 78 (Cal. Ct. App. 3d Dist. 1968). It may not affect, however, the indemnitor s duty to defend the indemnitee against all claims arising out of the agreement once said defense is requested, even if those claims do not result in a finding of negligence on the part of the indemnitor, so long as it is sufficiently specific. 2782(e). See also Crawford v. Weather Shield Mfg., Inc., 187 P.3d 424 (Cal. 2008); Brooke A. Hartman, Mark C. Russell & Ernest M. Isola, California Senate Bill 474: A Fair Allocation of Construction Risk or a Formula for Increased Litigation?, Gordon & Rees LLP (Oct. 2011), http://www.gordonrees.com/publications/viewpublication. cfm?contentid=2344. Section 2782 bars indemnification for injury resulting from the indemnitee s sole negligence, but allows indemnification where the indemnitee is concurrently negligent. Armco Steel Corp. v. Roy H. Cox Co., Inc., 163 Cal. Rptr. 330 (Cal. Ct. App. 2d Dist. 1980). Further, while the statute prohibits indemnification for the indemnitee s active negligence (i.e., performance or knowledge of negligent acts or omissions, or failure to perform a specific contractual duty), it does not affect risk-shifting for passive negligence (i.e., nonfeasance, failure to discover a dangerous condition or failure to perform a duty imposed by law). Chi. Title Ins. Co. v. AMZ Ins. Servs., Inc., 115 Cal. Rptr. 3d 707, 734 (Cal. Ct. App. 4th Dist. 2010), following Gonzales, 575 P.2d at 1198. Section 2782(a) also provides that this section shall not affect the validity of any insurance contract, workers compensation, or agreement. The statute does not eliminate the obligations of insurance carriers under additional insured agreements and endorsements. Am. Cas. Co. v. Gen. Star Indem. Co., 24 Cal. Rptr. 3d 34 (Cal. Ct. App. 2d Dist. 2005); Presley Homes Inc. v. Am. States Ins. Co., 108 Cal. Rptr. 2d 686 (Cal. Ct. App. 4th Dist. 2001). In Presley, a contractor sought recovery from the subcontractor s insurer for failure to provide a complete defense in a third party action pursuant to the terms of the additional insured endorsements. The insurer countered that it was only responsible for defending against claims arising from the acts and omis- Is Risk Transfer Risky Business? Contractual Indemnification, Additional... Black 229

sions of the insured subcontractors. Although the endorsements limited the indemnification, the court determined the duty to indemnify is distinct from the duty to defend. As a matter of public policy, an insurer is required to provide a full defense for additional insureds, for both covered and non-covered claims. C. Colorado Colorado s anti-indemnity statute is found in two parts. The Uniform Contribution Among Tortfeasors Act (UCATA) allows for contribution between joint and severally liable tortfeasors up to the tortfeasor s pro rata share of liability. Colo. Rev. Stat. 13-50.5-102 (2011). Subsection (8), however, expressly prohibits indemnification in construction contracts that contain any covenant, promise, agreement, or combination thereof to indemnify or hold harmless any public entity from that public entity s own negligence. As in California, subsection (8) does not apply to insurance contracts or contract clauses regarding insurance, or contract clauses regarding litigation defense costs. Nor does it apply to construction contracts between private parties. To address that gap, Colo. Rev. Stat. 13-21-111.5(6) (2011) establishes a non-delegable duty for parties to a construction agreement to be responsible for their own negligence and requires such parties to obtain liability insurance to cover that responsibility. Under subsection (b), any provision in a construction agreement that requires a person to indemnify, insure, or defend in litigation another person against liability... caused by the negligence or fault or the indemnitee or any third party under the control or supervision of the indemnitee is void as against public policy and unenforceable. General contractors can only be insured or indemnified for the proportion of negligence or fault attributable to the subcontractor or its agents. David McLain & Alex Nelson, Additional Insured and Insured Contract Liability Insurance Coverage for General Contractors, 36 Colo. Law. 45 (Nov. 2007). Broad or general indemnification clauses can be saved from invalidation with a savings clause such as to the fullest extent permitted by law or with some reference to 13-21-111.5(6). Brian G. Eberle, S.B. 07-087 and the Enforceability of Indemnification Provisions in Colorado Construction Contracts, 36 Colo. Law. 59, 63 (Sept. 2007). Although this statute does not affect insurance agreements or indemnification agreements for attorneys costs and fees, such coverage and indemnification is limited to liability resulting from the acts and omissions of the indemnitor. 13-21-11.5(6)(c) and (d)(i). However, since the statute limits indemnification to the negligence of the indemnitor and its agents, it is possible for a general contractor to be liable to an owner or developer for the actions of subcontractors, suppliers and other subordinates. Eberle, S.B. 07-087, supra, at 60. D. Illinois The Illinois Construction Contract Indemnification for Negligence Act, 740 Ill. Comp. Stat. Ann. 35/1 (Lexis 2012), states: With respect to contracts or agreements, either public or private, for the construction, alteration, repair or maintenance of a building, structure, highway bridge, viaducts or other work dealing with construction, or for any moving, demolition or excavation connected therewith, every covenant, promise or agreement to indemnify or hold harmless another person from that person s own negligence is void as against public policy and wholly unenforceable. This prohibition does not apply to insurance contracts or agreements. 740 Ill. Comp. Stat. Ann. 35/3. A-1 Roofing Co. v. Navigators Ins. Co., 958 N.E.2d 695 (Ill. App. Ct. 1st Dist. 2011) (subcontractor s insurer ordered to defend and indemnify general contractor in third party suit where liability in the underlying suit arose from work performed by the subcontractor for the general contractor). However, insurance 230 Construction Law Seminar September 2012

agreements that merely mask or agree to insure an otherwise invalid indemnification obligation are voidable. Transcon. Ins. Co. v. Nat l Union Fire Ins. Co., 662 N.E.2d 500 (Ill. App. Ct. 1st Dist. 1996). Illinois courts do not apply the anti-indemnity statute mechanically. Rather, the court examines specific facts to determine if the situation falls within the purpose of the act. Compare Ill. Power Co. v. Duke Eng g & Servs., 2002 U.S. Dist. LEXIS 5497 at *15-16 (N.D. Ill. Mar. 29, 2002) with Lovellette v. S. Ry. Co., 898 F.2d 1286 (7th Cir. 1990) (applying the statute in cases where the indemnitee was in a position to negligently cause harm). Courts will not interpret indemnification agreements to cover the indemnitee s sole negligence unless there is unequivocal language stating as such. See Pierre Condo. Ass n v. Lincoln Park W. Assocs., 881 N.E.2d 588 (Ill. App. Ct. 1st Dist. 2007) (where an indemnification provision can be read as one for contribution, the latter interpretation will apply). Contract provisions that are carefully drafted to only cover claims caused by, resulting from, arising out of or occurring in connection with work performed by or the acts and omissions of the subcontractor are enforceable. Compare W.E. O Neil Constr. Co. v. Gen. Cas. Co., 748 N.E.2d 667 (Ill. App. Ct. 1st Dist. 2001) with Liccardi v. Solt Terms. (Chicago), Inc., 669 N.E.2d 1192 (Ill. App. Ct. 1st Dist. 1996), aff d 687 N.E.2d 968 (Ill. 1997) ( all sums language called for full indemnity regardless of fault and was therefore void under the indemnity act). E. Rhode Island Rhode Island similarly prohibits contractors from seeking indemnification from subcontractors for their own negligence. R.I. Gen Laws 6-34-1 (1976) states: A covenant, promise, agreement, or understanding in, or in connection with or collateral to, a contract or agreement relative to the design, planning, construction, alteration, repair, or maintenance of a building, structure, highway, road, appurtenance, and appliance... pursuant to which contract or agreement the promisee or the promisee s independent contractors, agents, or employees has hired the promisor to perform work, purporting to indemnify the promisee, the promisee s independent contractors, agents, employees, or indemnitees against liability for damages arising out of bodily injury to persons or damage to property proximately caused by or resulting from the negligence of the promisee, the promisee s independent contractors, agents, employees, or indemnitees, is against public policy and is void; provided that this section shall not affect the validity of any insurance contract, worker s compensation agreement, or an agreement issued by an insurer. Although the statute appears to read as a clear prohibition, it raises questions of the extent to which subcontractors, and their insurers, may be relieved of their contractual obligations. The statute only voids the part of the contract that seeks to indemnify the general contractor for its own negligence. Therefore, contractors must be wary of overbroad indemnity language. Overbroad language like any and all claims can be enforceable regardless of lack of fault. Beerworth, Emerging Trends, supra, at 18-19. See Rodrigues v. DePascale, 926 A.2d 616 (R.I. 2007). III. Circumventing Anti-Indemnity Laws A. Additional Insured Endorsements Many states, either by statute or common law, exclude insurance contracts and agreements to insure from anti-indemnity laws. Therefore, owners and general contractors may be able to circumvent anti-indemnity laws, and successfully shift their risk, by contractually requiring that they be named additional insureds Is Risk Transfer Risky Business? Contractual Indemnification, Additional... Black 231

on the subcontractor s insurance policy. See Bosio v. Branigar Org. Inc., 506 N.E.2d 996 (Ill. App. Ct. 2d Dist. 1987) ( a promise to obtain insurance is not the same as a promise to indemnify ); McAbee Constr. Co. v. Ga. Kraft Co., 343 S.E.2d 513 (Ga. 1986) (Ga. Code Ann. 13-8-2(b) does not apply where clause shifts the risk of loss to an insurer regardless of fault). Through an additional ensured endorsement, the general contractor can obtain coverage and defense costs for their sole negligence which would otherwise be barred by an antiindemnification statute, without a prior determination of fault. Trisha Strode, Note, From the Bottom of the Food Chain Looking Up: Subcontractors are Finding That Additional Insured Endorsements are Giving Them Much More Than They Bargained For, 23 St. Louis U. Pub. L. Rev. 697, 706-707 (2004). Additional insured endorsements usually follow two forms, provided by the Insurance Services Office, Inc. (ISO). ISO recommends that form CG 20 09 be used when the named insured does not have a contractual obligation to name an additional insured, and form CG 20 10 be used when such contractual obligation exists. In cases where the policy has a provision that automatically grants additional insured status to any entity with which the named insured is contractually obligated to provide coverage, an endorsement may not be necessary. McLain, Additional Insured, supra, at 46. Contractors should be wary of general additional insured endorsements that might trigger statutory prohibitions. Indemnity agreements are distinct from additional insured endorsements because they do not establish a relationship between the additional insured/indemnitee and the insurer, and liability is limited to contract terms and statutory regulation. The additional insured endorsement, on the other hand, creates a direct relationship between the additional insured and the insurer and its coverage follows the applicable provisions of the insurance policy. Galganski, Part I, supra, at 88. Additional insured endorsements arguably provide general contractors (and even owners and architects) the protection of a full indemnification agreement without having to pay the insurance premiums. Additionally, it allows general contractors to secure a defense without having to implicate its own insurance policy. Although Rhode Island courts have not definitively opined one way or another, case law indicates that the anti-indemnity statute does not protect subcontractor s insurers. Beerworth, Emerging Trends, supra, at 19-20. In AF Lusi v. Peerless, the court determined that the anti-indemnification provisions do not affect the parties ability to contract for insurance coverage. 847 A.2d 254, 265 (R.I. 2004). The court followed the letter of the law, but the spirit of the statute was abandoned, as the risk was shifted pursuant to the additional insured endorsements. Beerworth, Emerging Trends, supra, at 20-21. Additional insured endorsements can also reinforce indemnity agreements. [U]nlike an indemnity clause where the general contractor must pay costs out of his own pocket and then wait for reimbursement, additional insured status provides immediate coverage for defense costs. Strode, From the Bottom, supra, at 705-706. For example, in Colorado, under an additional insured endorsement, the duty to defend is broader than the duty to indemnify. Therefore, an insurer may be required to defend a claim that results in a finding that does not trigger the policy indemnification to satisfy the settlement or judgment. If an insurer doubts that the claim falls within policy coverage, they can either provide defense to the insured while reserving a right to reimbursement or seek declaratory judgment. McLain, Additional Insured, supra, at 46. Relying on coverage as an additional insured as a means of risk transfer can lead to uncertainty. This is because the primary policy triggered by the additional insured endorsement may seek to determine whether other insurance policies respond first, or concurrently, including the owner s or contractor s own primary insurance. The owner s or contractor s own insurer will likely take the position that their policy is in an excess position. Contractors can take steps to ensure that the subcontractor s insurance policy is triggered before its own insurance policy. The additional insured can add an endorsement to its own insurance policy declaring it the excess policy over the policy under which it is named as an additional insured. The additional 232 Construction Law Seminar September 2012

insured can also ask the other party to add language to the endorsement declaring the additional insured policy as primary and non-contributory. Finally, the additional insured should expeditiously tender a claim to the additional insured carrier so as to determine coverage positions as early as possible. Terry Galganski, The Insurance Exceptions to the Missouri Anti-Indemnity Statute (Part II), 58 J. Mo. B. 148, 150 (May/June 2002). For example, in New York, where an insured s defense is covered by two separate policies, the other insurance provisions in the several policies determine the insurers respective obligations. IBM Corp. v. Liberty Mut. Fire Ins. Co., 303 F.3d 419, 429 (2d Cir. 2002), citing State Farm Fire & Cas. Co. v. LiMauro, 482 N.E.2d 13 (N.Y. 1985). Under New York common law, in determining priority of coverage, generally the other insurance clause in an insurance policy would take precedence over the terms of a trade contract for the purpose of determining priority of coverage. See Tishman Constr. Corp. v. Great Am. Ins. Co., 861 N.Y.S.2d 38 (App. Div. 1st Dep t 2008) (subcontractor s excess insurance layer not triggered until both the subcontractor s primary insurance and the contractor s primary insurance were exhausted; finding the intended purpose of the policy as excess was evidenced by its stated coverage and the premium paid for it, and based on its excess insurance language), following Bovis Lend Lease LMB, Inc. v. Great Am. Ins. Co., 855 N.Y.S.2d 459 (App. Div. 1st Dep t 2008) (insurance policies are contracts between insured and insurer, so coverage under a policy, including priority of one policy to another, is controlled by the policy terms, not by the terms of trade contracts requiring the insured to procure insurance; low premium on the subcontractor s umbrella policy indicated that the policy was intended to be excess over all other insurance); Cheektowaga Cent. Sch. Dist. v. Burlington Ins. Co., 822 N.Y.S.2d 213 (App. Div. 4th Dep t 2006) (despite other insurance clause in construction manager s primary policy providing it would be excess if other excess insurance named the construction manager as an additional insured, roofing contractor s excess insurance should be last on the risk because roofing contractor s excess insurance, which named the construction manager as an additional insured, only applied after the construction manager s primary insurance was exhausted; amount of coverage provided for the premium paid on excess policy indicated it was a true excess policy, despite the excess clause in construction manager s primary policy); United States Liab. Ins. Co. v. Mountain Valley Indem. Co., 371 F. Supp. 2d 554, 558 (S.D.N.Y. 2005) ( insurance policy provisions take precedence over conflicting provisions found in trade contracts between insureds ); Travelers Indem. Co. v. Am. & Foreign Ins. Co., 730 N.Y.S.2d 231 (App. Div. 1st Dep t 2001) ( it is the policy provision that controls [priority of coverage] and not the provisions of the subcontract between the insureds); State Farm Fire & Cas. Co. v. LiMauro, 482 N.E.2d 13 (N.Y. 1985); contra Pecker Iron Works of N.Y. v. Traveler s Ins. Co., 786 N.E.2d 863 (N.Y. 2003) (Court of Appeals looked to the underlying trade contract for priority of coverage only because the insurance policy expressly provided that the contract would determine whether the coverage provided was primary or excess). Coverage disputes can also arise concerning whether or not an event triggers additional insured coverage. More recently, general language in the endorsement has been construed against the insurers and in favor of general contractors and developers, providing coverage for claims resulting from the additional insured s sole negligence or for claims arising after completion of the work. Strode, From the Bottom, supra, at 713. Insurers have taken steps to limit liability and coverage for additional insureds by refining the terms of policy endorsements, amendments and exclusions, with mixed/unpredictable success. For example, although arising out of language is used to limit liability to acts or omissions of the insured subcontractor, courts interpret it more liberally in additional insured endorsements to include the negligence of the general contractor. Beerworth, Emerging Trends, supra, at 30-32. Similarly, your work, referring to the work of the subcontractor, can extend to cover the general contractor s sole negligence so long as it is related to the subcontract agreement or other work performed by the subcontractor. Strode, From the Bottom, supra, at 714-715. Ongoing operations and similar terms that Is Risk Transfer Risky Business? Contractual Indemnification, Additional... Black 233

limit coverage to the subcontractor s work can extend to personal injury and property damage that occurs long after the subcontractor s work on a project is completed. McLain, Additional Insured, supra, at 48. Contracts that more explicitly limit liability by using the subcontractor s negligence as a prerequisite for coverage ( with respect to or because of or caused by the negligent acts or omissions of ), are generally more successful in limiting coverage to additional insureds. Beerworth, Emerging Trends, supra, at 30-32. Without language that explicitly limits coverage to the acts and omissions of the named insured (i.e., ISO CG 20 10) or excludes coverage for the sole or contributory negligence or willful misconduct of the additional insured (ISO CG 7482), courts may broadly construe the endorsement to cover the actions of the additional insured. McLain, Additional Insured, supra, at 48. Finally, a small but growing number of states, including Texas, Colorado, Kansas, Montana, New Mexico, Oklahoma, Oregon and Utah, have passed anti-additional insured statutes, which prohibit contract provisions which require additional insured coverage to defend, indemnify or otherwise hold harmless the additional insured for its own negligence or willful misconduct. Richard Dyer, Another State Joins List of Anti-Additional Insured, Duane Morris Construction Law Blog (Jan. 5, 2012). See, e.g., Texas Ins. Code 151.104(a), Colo. Rev. Stat. 13-21-111.5(6)(b), Kan. Stat. Ann. 16-121(c), Mont. Code Ann. 28-2-2111, N.M. Stat. 56-7-1, 15 Okla. Stat. 221(b), Or. Rev. Stat. 30.140, Utah Code Ann. 13-8-1. B. A Shift Toward Wrap-ups? To avoid the uncertainty of anti-indemnification statutes and additional insured endorsements, contractors and developers can purchase owners and/or contractors protective liability insurance (also referred to as OCP, OCIP, CCIP, or wrap-up insurance programs). A. Bayley, New California Law Makes Wrap-ups More Attractive, CR Solutions Quarterly Wrap-up (Nov. 30, 2011). See Va. Sur. Co. v. Adjustable Forms Inc., 888 N.E.2d 733, 736-737 (Ill. App. Ct. 1st Div. 2008), citing Pride v. Liberty Mut. Ins. Co., 2007 U.S. Dist. LEXIS 40833 at *4-5 (E.D. Wis. June 5, 2007). The standard wrap-up agreement covers general liability, workers compensation, excess liability and builder s risk. William Gallagher Associates, Construction Wrap-ups: Risk Management for Sponsors, Owners, & Contractors for Large Construction Projects, (July 13, 2012), http://www. wgains.com/assets/whitepapers/whiteconswrapup.pdf. Parties can also purchase extended completed operations coverage for protection from liability up to ten years after the project completion. Sam Abdulaziz, Wrap-up Liability Insurance Also Known As Consolidated or Controlled Insurance Program (CIP), Law Talk, Law Offices of Abdulaziz, Grossbart & Rudman (Aug. 24, 2009). Wrap-up programs are more efficient than traditional insurance and indemnification agreements because (1) a single entity controls coverage and claim limits, (2) eliminates coverage disputes among insurers, and (3) eliminates cost of insurance and any associated mark-ups from contract bids. William Gallagher Associates, supra. Wrap-ups also place the responsibility for risk management and worksite safety in a single entity, rather than dispersing it among the parties. See Jacqueline P. Sirany & James Duffy O Connor, Controlled Construction Insurance Programs: Putting a Ribbon on Wrap-Ups, 22 Const. Lawyer 30 (Winter 2002); Indep. Ins. Agents of Okla. v. Okla. Tpk. Auth., 876 P.2d 675, 676 (Okla. 1994) ( Not only is a typical OCIP designed to reduce the cost of insurance premiums, it allows for coordinated risk management and safety program for workers and visitors to the construction site. An OCIP also provides for insurance premium rebates to the policy owner for good construction safety records. ). Although potentially costlier to the purchaser, wrap-up insurance is dedicated to the entire project, and is less likely to lead to coverage disputes, as it is primary above all other insurance policies for the parties included in the program. Further, general contractors 234 Construction Law Seminar September 2012

can ask the subcontractor to purchase the policy and name the general contractor as the insured for duration of the project. Galganski, Part II, supra, at 151. There are some drawbacks to wrap-up programs, such as inadequate policy limits and gaps in coverage. Edward Lozowicki & James Higgins, New Legislation on Wrap-up Insurance and Indemnity Clauses, Construction and Infrastructure Law Blog, Sheppard Mullin (Dec. 28, 2009). For example, in Zeitoun v. Orleans Parish Sch. Bd., 33 So.3d 361 (La. App. 4th Cir. 2010), a child was injured at a school and the family sued the school board which was insured under an OCIP for various capital improvements. The court held that the OCIP is generally limited in scope and covers only risks associated with the specific project. Id. at 366. There is also conflicting case law on whether the exclusive remedy defense applies in wrap-ups that include Workers Compensation coverage. In Cook v. White Constr. Co., 2011 Tex App. LEXIS 6121 (Tex. App. Aug. 4, 2011), one of the subcontractor s employees, after receiving his workers compensation benefits, sued the general contractor for negligence. The court held that the exclusive remedy defense applied where the general contractor supplied the workers compensation insurance. In contrast, the court in the case of Pride v. Liberty Mut. Ins. Co., 2007 U.S. Dist. LEXIS 40833 (E.D. Wis. June 5, 2007), with similar facts, held that all contractors in a wrap-up program were not a unitary employer for workers compensation, so the defense did not apply. Finally, wrap-ups may be subject to regulatory oversight. For instance, some jurisdictions prohibit the use of wrap-ups for public construction projects. See, e.g., N.Y. Ins. Law 2504(a)(1) (Gould 1984); Prof l Ins. Agents v. N.Y. State Ins. Dep t, 611 N.Y.S.2d 370 (App. Div. 3rd Dep t 1994). Others permit the use of wrapups, but only for projects which exceed a certain amount. See, e.g., Cal. Gov t Code 4420 (Deering 2000); Nev. Rev. Stat. 616B.710 (1999). IV. Conclusion While each method of risk transfer has its drawbacks, it is important to remember that careful drafting and use of indemnification agreements, additional insured endorsements and wrap-up agreements can help to ensure the protection sought. Parties should be particularly mindful of the law in the state where the project is located when crafting these provisions. Is Risk Transfer Risky Business? Contractual Indemnification, Additional... Black 235

Introduction to Construction Law: What You Need to Know When You Are Just Starting Out Diana Gerstberger Catlin US 3340 Peachtree Road, N.E., Suite 2950 Atlanta GA 30326 (404) 443-4961 Robin D. Leibrock Century Insurance, A Division of Meadowbrook Insurance Group 465 Cleveland Avenue Westerville, OH 43082 (866) 370-8757

Diana Gerstberger is a senior claims specialist at Catlin, Inc. Ms. Gerstberger joined Catlin, Inc., in August of 2008 and currently handles a wide variety of complex litigated claims including construction defect matters. Prior to joining Catlin, Ms. Gerstberger worked for Zurich for five years handling construction defect claims. Ms. Gerstberger has 11 years experience in the insurance industry as a claims adjuster and insurance defense counsel. Ms. Gerstberger obtained her JD from California Western School of Law and she is licensed to practice law. Robin D. Leibrock is the vice president of claims for Century Insurance in Westerville, Ohio, a division of Meadowbrook Insurance Group. She is the head of the construction and professional liability units. Ms. Leibrock is a member of DRI s Construction Law, Insurance Law, Women in the Law, and Corporate Counsel Committees. Ms. Leibrock obtained her JD from Capital University Law School and is a member of the State Bar of Ohio and the United States District Court for the Southern District of Ohio.

Introduction to Construction Law: What You Need to Know When You Are Just Starting Out Table of Contents I. Introduction to Construction Law: What You Need to Know When You are Just Starting Out...241 II. Reporting to Carrier...241 III. Litigation Management Guidelines...242 IV. Risk Transfer Tenders & Additional Insured Tenders...242 V. How to Identify and Obtain Policy Information...243 VI. What Coverage Trigger Applies?...244 VII. Allocation of Damages...244 VIII. Additional Insured vs. Indemnitee...245 Introduction to Construction Law: What You Need to Know... Gerstberger and Leibrock 239

Introduction to Construction Law: What You Need to Know When You Are Just Starting Out I. Introduction to Construction Law: What You Need to Know When You are Just Starting Out By developing a basic understanding of the key elements of handling a construction file, you will be able to focus your resources accordingly and avoid any unnecessary expenditure of your time and resources. All too often, defense counsel believes the issues discussed herein are tasks to be handled by the insured, insurance carrier, insured TPA or insured risk manager, and as a result, they miss crucial elements in their client s defense. This discussion is intended to provide you with a few very basic tips to assist you in these efforts. Communication is crucial to effectively handle a construction defect loss. You need to make sure you regularly advise your client and the carrier regarding the status of the litigation. Additionally, you need to develop a plan of action for handling the loss with constructive input from your client and /or the claims representative. Remember you are not handling the litigation in a vacuum. Your ability to report to the carrier is one key element which will impact your handling and success of the file from inception forward. II. Reporting to Carrier Upon assignment of the file, immediately contact the claims representative to advise you have received the file and provide all your contact information (if the adjuster does not already have) and generally discuss the file You need to make sure you have a current copy of the litigation claims handling guideline from the carrier. Almost all carriers have detailed reporting guidelines with crucial reporting dates you do not want to miss You need to calendar these dates at the inception of the file just as you would calendar any court, deposition appearances. These dates are just as important, do not arbitrarily change them. If you handle work for multiple carriers, make sure you have the correct reporting format for the carrier you are writing. Even though the basic handling and information to be reported is relatively the same you want to make sure to complete any special requirements each carrier may have Your reports should be comprehensive and detail what has occurred, what is scheduled in the litigation and your plan of action for the upcoming matters. All reporting does not need to be written. You need to find time to call and talk to the claims representative and the client. Verbal communication with all parties is just as important as having the written reports. Make sure your claim reports are detailed and comprehensive; discuss the venue, judge, opposing counsel, damages, liability and potential exposure to the client for this loss. It is important to detail to the claims adjuster all pertinent dates and time periods such as dates of both the construction work, scope of work performed and the alleged injury and damage for which your client is facing liability. Make sure to obtain a complete job file Introduction to Construction Law: What You Need to Know... Gerstberger and Leibrock 241

from your client and from any other party who may have information in relation to your client s work at issue in the suit. All these details are important to coverage determination and claims handling of the loss. Explain what each item of alleged damage is so that the insurer can fairly evaluate whether there is any covered property damage and, if so, to what extent Separately discuss each type of property damage, exactly what property has been damaged and to what extent, based on what has been alleged in the pleadings and what has been identified in discovery and/or defect reports. Do not simply report to the insurer only what the expert(s) may conclude regarding the nature and extent of the damage. Be as detailed as possible, as the claims adjuster needs as much information as possible to be able to properly reserve the file and request settlement authority, especially for large exposure losses. Avoid under reporting to the insurer, as this may result in the insurer deciding that there is no coverage obligation at all, or that its indemnity obligation is very limited. Report all facts as they are. Make sure to include with your reports all necessary pleadings for the file i.e. copy of operative pleadings, cross- complaints, discovery responses, motions for summary judgment etc unless the claim representative advises they do not need these items. III. Litigation Management Guidelines Another area which is an important element to handling your construction file is your understanding and ability to follow the litigation management guidelines required. These guidelines are interconnected with any reporting guidelines provided by the carrier. You need to ensure that you and the firm have the most recent version of the guidelines in effect. These guidelines are put in place to provide counsel a framework for proper handling and billing of the file. It is very important to make sure you and your billing departments are aware of billing guidelines in effort to avoid unnecessary redactions for billing entries outside of the allowable costs and fees. Improper billing entries can send a negative message to the claim representative and insured company regarding your ability to be organized and competently handle the matter for your client, their Insured. IV. Risk Transfer Tenders & Additional Insured Tenders As defense counsel you need to minimize the exposure to your client by maximizing the risk transfer available for the loss. It is important for you to have a general understanding of the type of insurance available to your client. Knowing this will aid in understanding what exposure your client may have personally as a result of the loss, even though they have commercial general liability insurance. It is important to tender the defense and indemnity of your client as soon as possible in order to avoid late notice issues and a duty to defend is not incurred until the end Your client may have a few different policies which they purchased in order to protect themselves from economic and business risks associated with construction. When you are representing the interests of a defendant or cross-defendant in a lawsuit complaining of construction defects and your client is, or may be, an insured under one or more insurance policies affording liability coverage regarding the suit, you will need to: 242 Construction Law Seminar September 2012

Explore what insurance benefits may be potentially available to your client by virtue of both liability insurance maintained by your client and liability insurance available to your client under a policy maintained by a third party, and Do everything possible to obtain the maximum defense and indemnity benefits for your client from all such liability insurance Additionally it is important to know if your client s policy contains an SIR or a deductible in order to determine if the policy has been triggered yet. V. How to Identify and Obtain Policy Information Information regarding liability policies in which your client is the named insured (named as an insured in the policy Declarations) should be available through the client and the client s insurance agent(s). Your client may be an additional insured under a liability policy issued to another party involved in the construction defect project pursuant to an Additional Insured Endorsement which is part of that policy. Owner/ Developers /General Contractors will often require a subcontractor to have the general contractor named as an additional insured under the subcontractor s insurance policy. 1. Ask the client and check the client s records for Certificates of Insurance and Additional Insured Endorsements referencing the client as an additional insured, and review pertinent contracts to see if another party agreed to name the client as an additional insured under its liability insurance. 2. If you find an Additional Insured Endorsement that either names or generally describes your client, whether or not your client would qualify as an additional insured with respect to the construction defect suit in issue depends on the terms of the particular endorsement as applied to the underlying factual situation. Check the endorsement to determine what restrictions may apply, such as: Is coverage limited to ongoing operations only? Is coverage limited to a specific location? Is a written contract required for coverage to apply? Once you obtain your client s insurance information, it is essential that you tender the defense and indemnity of your client to each such insurer, including any carriers providing excess coverage. A delay in tendering can limit, and in some cases entirely preclude the insurer s potential coverage obligation. For example: 1. It is the general rule in many, if not all states, that, even if, pursuant to the terms of the policy, the insurer owes a duty to defend its insured, the insurer does not owe a duty to pay defense costs incurred by the insured prior to the date of tender. 2. Most Commercial General Liability Conditions provisions require that a named insured provide written notice to its insurer of a claim or suit as soon as practicable and immediately provide the insurer with copies of legal papers the insured receives concerning the claim or suit. In many states, a delay in complying with these requirements that results in prejudice to the insurer Introduction to Construction Law: What You Need to Know... Gerstberger and Leibrock 243

will void the insurer s coverage obligations. In others, the insurer will owe no coverage obligation even if it has not been prejudiced by the delay. VI. What Coverage Trigger Applies? Depending upon the state in which the claim or suit arises, the trigger for coverage may be different. It is important for you to understand the trigger of coverage to make sure your client or insured is provided all coverage available for its exposure and all carriers provide/share in the defense of your client or insured. There are four trigger of coverage theories that apply to construction defect losses. They are: Injury-in-fact (aka Actual injury) Manifestation Exposure Continuous Injury-in-fact trigger: This trigger is also referred to as the actual injury trigger. States that recognize an injury-in-fact trigger find that all policies in effect when damages actually occur are the policies which provide coverage. The date(s) on which damages occur is often difficult to determine and often requires an inspection and perhaps an expert. This may include any time from exposure to manifestation inclusively. If the state in which your case or claim is pending recognizes an injury-in-fact trigger, you need to discover when the damages took place and insure that all carriers providing coverage to your client or insured have been properly and timely notified and a tender is timely made on their behalf. Manifestation trigger: Under a manifestation trigger theory the policy in effect at the time the property damage is discovered, or manifests, is the policy that provides coverage. This will typically only involve one policy. You need to make sure that the proper carrier has been placed on notice so as to avoid an issue with late notice. Exposure trigger: States that recognize an exposure theory find that only those policies in effect at the time of actual exposure to the damage causing defect or event would provide coverage. In the construction defect context, this trigger is often used to trigger coverage on the date of installation. Continuous trigger: Under a continuous trigger theory, all policies in effect from the date of the first exposure continuing through any period of latency and ending at the time the damages are discovered or become manifest are triggered. In the construction defect context, this usually means that all policies from the date of installation to the date of manifestation are triggered. Again, it is important for you to understand what coverage trigger is recognized in the court or state in which you are handling a matter so that all possible coverage for your client or insured is available. There has been much litigation over what triggers coverage and you should be aware of how the courts in your state have interpreted the trigger of coverage. VII. Allocation of Damages Once the trigger of coverage has been decided, the issue of allocation must be addressed and is often tied to the trigger of coverage. Allocation in construction defect cases can be similar to allocation of damages in asbestos and environmental cases. There are two basic methods of allocation: Joint and Several (sometimes referred to as all sums ) Pro Rata 244 Construction Law Seminar September 2012

Joint and Several: This method of allocation often goes hand-in-hand with the continuous trigger theory. If coverage under a policy is triggered, the insurer is required to provide a defense and indemnity to the insured to the extent of its policy limits. The insurer may then have a right of contribution from any other carriers whose policy would be triggered but it is incumbent upon the insurers to allocate the damages among the policies. This method allows for vertical exhaustion of policy limits. Pro Rata: There are various methods used to allocate damages on a pro rata basis. Under the pro rata method, each policy triggered is allocated only a portion of the loss. The portion allocated is dependent upon the method used by the court. Some of the methods used include: time on risk, proportion of the policy limits when compared with the total of all policy limits available, proportion of the injuries sustained within the policy period, etc. This method allows for horizontal exhaustion of policy limits. VIII. Additional Insured vs. Indemnitee It is important to understand whether your client qualifies as an additional insured under the policy of another, is owed a defense and/or indemnity pursuant to contract with another or both. This may allow for the transfer of the risk to another carrier, another entity or both. To determine whether your client or insured is an additional insured under the policy of another, you need to obtain copies of all contracts involved in the construction project and all certificates of insurance that may identify potential sources of additional coverage. You then need to obtain copies of all insurance policies if possible. You next have to analyze these contracts/policies to see whether your client s or insured s risk can be transferred to another carrier or another entity. It is preferable to have the ability to transfer the risk to both another carrier and another entity. This provides the most protection for your client or insured. If your client or insured qualifies as an additional insured on the policy of another, you may be able to tender the defense and/or indemnity of your client or insured to that carrier. If your client is owed a defense and/or indemnity pursuant to contract, you may be able to tender the defense and/or indemnity to the other contracting party. Both provide other sources of revenue to protect your client or insured. Additional insured status is granted by way of endorsement to an insurance policy. Dependent upon the type of endorsement, additional insured status may apply to ongoing operations only, completed operations only or both ongoing and completed operations. Also dependent upon the type of endorsement, additional insured status may be primary and non-contributory or may be subject to the Other Insurance clauses in the policy or policies. You need to be able to understand what coverage is available to your client or insured. Some states have anti-indemnification statutes which apply specifically to construction contracts. You need to know whether your particular state has an anti-indemnification statute that would apply to your client or insured s contracts. These statutes may make indemnification clauses in your client s or insured s contracts void. If your state does have an anti-indemnification statue, make sure you understand how it applies to your client s or insured s contract and what affect it will have on your ability to rely on the transfer of risk pursuant to that contract. When you initially begin to handle construction files, especially a construction defect matter, the entire process can be challenging and overwhelming. Do not panic, use the outline provided above to guide you through the early stages of the file keeping in mind each file has its own set of individual facts. Remember Communication is key as the matter moves through litigation and is essential to resolving the matter whether at mediation or at trial. Introduction to Construction Law: What You Need to Know... Gerstberger and Leibrock 245

Making the Points to Win Your Case: How Juries Decide Nicole Whyte Bremer, Whyte, Brown & O Meara, LLP 20320 S.W. Birch Street, Second Floor Newport Beach, CA 92660 (949) 221-1000 nwhyte@bremerandwhyte.com

Nicole Whyte is a founding principal of Bremer Whyte Brown & O Meara LLP. Admitted to the South African Supreme Court in 1990, the California State Bar in 1991, the Nevada State Bar in 2000, the Washington D.C. Sate bar in 2011, and the Washington State Bar in 2012, Ms. Whyte has extensive experience in all aspects of litigation. She focuses her practice in the areas of complex civil litigation, construction law, trucking law, insurance defense, and family law. Ms. Whyte has successfully handled and tried hundreds of complex, multi-million dollar lawsuits and has been awarded the highest accolade in Martindale-Hubbell: an AV rating. The AV rating signifies Ms. Whyte s legal abilities are of the vary highest standard and her professional ethics are unquestioned. Ms. Whyte has written and lectured extensively in her fields, and is a California Super Lawyer.

Making the Points to Win Your Case: How Juries Decide Table of Contents I. Introduction...251 A. Consumer behavior...251 B. Evolution of jury research...251 II. Uncertainty of the Jury System...251 III. Factors We Commonly Weigh in Jury Research...252 IV. Effective Use of Different Types of Focus Groups/Mock Trials...252 A. 2-to-3-day mock trial...252 B. 1-day mock trial...253 C. Judges panel...253 D. Internet focus group...253 E. Mediation mock trial...253 V. Key Considerations...253 A. Confidentiality...253 B. Cost considerations...253 C. Defense v. plaintiff...253 D. Liability and damages...254 E. Test the theory of the case...254 F. Test your trial lawyer...254 VI. Using Mock Trial Research to Assist in the Evaluation of the Case...254 A. Testing the pure exposure value of the case...254 B. Testing liability theories...254 C. Do results of the mock trial affect carrier evaluation?...254 VII. Using Mock Trials to Assist in Witness Preparation...255 VIII. When Preparing For a Mock Trial or Focus Group, the Following Questions Should Be Addressed at the Beginning of the Case Study to Help Keep the Study Focused...255 IX. Conduct of a Mock Trial/Focus Group...255 A. Selecting an unbiased panel from the venue...255 B. Creating the presentation...255 X. Jury Deliberations...256 XI. Use of Mock Trial/Focus Group Research at Different Stages of Litigation...256 A. Pre-litigation...256 B. Pre-mediation...256 C. Pre-trial...256 XII. Conclusion...257 Making the Points to Win Your Case: How Juries Decide Whyte 249

Making the Points to Win Your Case: How Juries Decide I. Introduction A. Consumer behavior For years, advertisers and merchandisers have researched how consumers respond to commercials and product designs by using brain mapping. Brain mapping techniques involve a high form of neuroimaging, producing brain images supplemented by the results of additional data processing or analysis. B. Evolution of jury research Jury research, like many of the social sciences, has evolved considerably in the last several decades. i. In the early days, jury research focused on how jurors reacted to legal cases, and specifically what they thought of the evidence, witnesses and argument. ii. Today, jury research can tell us how jurors arrive at their ultimate verdict by developing a comprehensive case story and decision making role out of each side s evidence, the jury instructions, and the jurors own personal beliefs and experiences. II. Uncertainty of the Jury System The advertising industry has traditionally used focus groups to determine how consumers will receive a marketing program. A similar strategy may be applied to jury research to determine how a panel of jurors in the actual venue will perceive the evidence and react to the case. However, surprisingly few lawyers actually test the market. There are several reasons for this, including issues of time consumption and cost. However, mock trials and focus groups can be an excellent indicator of how jurors might evaluate a case. For the majority of trial lawyers, the first time they have an insight into how a jury will view the case is once the verdict is read. At that point, it is too late to change the result. It should be noted there is a distinction between the terms focus groups and mock trials, although these terms are often used interchangeably. Focus groups are usually conducted by psychology and marketing professionals who assist in identifying the most and least ideal jurors for a particular case. Techniques include requiring the prospective jurors to use special keyboards to indicate positive and negative reactions to specific arguments. The responses are then correlated to determine the most and least effective arguments. Mock trials can sometimes be done less formally and less expensively. Mock trials are typically an abbreviated form of an actual trial, with opening statement, testimony, presentation of documentary evidence, closing arguments and jury deliberations. There are multiple benefits of mock trials and focus groups, which include the following: i. Mock jurors hear actual testimony. ii. Mock jurors see actual exhibits. iii. Mock jurors hear closing arguments. iv. Mock jurors struggle with real life jury instructions in an atmosphere similar to a courtroom. Making the Points to Win Your Case: How Juries Decide Whyte 251

v. Mock trials can show attorneys how prospective jurors in the actual venue will view a case and which arguments jurors may find most persuasive. Mock trials can be used as an important tool in evaluating liability and damages. Mock trials may also be helpful in determining whether or not to admit liability where liability is fairly clear, and/or the circumstances and facts giving rise to liability may inflame the jury. Here it can be helpful to present two mock trials, one where liability is contested, and another where liability is disputed. That way, the damages awards can be compared and consideration can be given to whether or not disputing liability results in a greater, inflated damages award. Mock trials may also be helpful in evaluating juror impressions of witnesses. This may be helpful in preparing witnesses for trial, and receiving realistic feedback as to the strengths and weaknesses of those witnesses. III. Factors We Commonly Weigh in Jury Research The following is a list of various factors that can be determined through either mock trial or focus group research. Depending upon the specific facts and issues in the case, selected factors may be tested or all factors may be tested. Case facts and evidence. Verdict questions/jury instructions. Public or community opinion. Cultural interpretations. Individual life experience. Unspoken standards/rules/ expectations. Emotional issues. Case complexity or confusion. Preconceptions or misconceptions about the case. Attitudes/beliefs toward case issues. Graphic and demonstrative evidence. Case story foundation. IV. Effective Use of Different Types of Focus Groups/Mock Trials Depending upon the number of factors that will be tested, complexity of the issues, the number of witnesses and the volume of evidence, there are various types of focus groups/mock trials arrangements available. Cost considerations and time considerations are key factors. A mock trial or a focus group can be done fairly inexpensively, particularly where a 1-day mock trial is used or an internet focus group is the method of choice. The following options are available: A. 2-to-3-day mock trial A 2-to-3-day mock trial may be used where there are an extensive number of witnesses, complex issues and voluminous documents that must be considered by the jury. This option would only be used in the event of an extremely high dollar exposure case where the stakes are high. 252 Construction Law Seminar September 2012

B. 1-day mock trial A 1-day mock trial can be performed fairly inexpensively. An abbreviated version of the evidence is typically presented to the jury, either by way of a summary of witness testimony or the showing of selected excerpts of video taped deposition testimony. Typically, both counsel for the plaintiff and defense will do a mini-opening statement, following by a presentation of the evidence by each side. The presentation will be concluded with closing arguments by both plaintiff and defense, and a brief rebuttal by the plaintiff. C. Judges panel In cases that involve a bench trial, a panel of retired judges may hear the evidence in a similar format as described in the 2-to-3-day mock trial and/or the 1-day mock trial. In some cases, where a jury trial or a bench trial is possible, a jury and a panel of judges may hear the same presentations and then deliberate separately to render separate verdicts. D. Internet focus group An internet focus group can be conducted fairly inexpensively with the use of webcams and the internet. In this scenario, selected jurors log in to a secure website and appear on screen via a webcam. Each one of the them view the attorneys, who are also live via webcam, as they conduct the presentations. At the closing of the case, the jurors deliberate, interacting with each other live on screen. In this manner, they reach a verdict. E. Mediation mock trial Under this scenario, and with the assistance of a mediator, key issues are identified. After identifying those issues, both sides present their case, either jointly or separately, to the focus group arranged and moderated by a moderator and mediator. Discussions of the focus group jurors plays a key role in evaluating the strengths and weaknesses of the parties position and enabling the mediator to assist the parties in reaching a resolution of the case. V. Key Considerations The following key considerations are paramount when considering a mock trial or focus group. A. Confidentiality Trials and focus groups are conducted under strict confidentiality. Jurors are required to sign a confidentially agreement. Often the names of the parties are not disclosed; rather pseudonym are used. B. Cost considerations Usually the exposure of the case will drive the cost considerations involved. As noted above, many steps can be taken to contain costs, including conducting research of a shorter duration and/or using the internet options available. C. Defense v. plaintiff Consideration should be given as to which attorneys will present the case for the plaintiff and the defense. Where the research is conducted on behalf of the defense, the defense trial lawyer should be the one to present the defense case. The plaintiff s side could be presented by an attorney who approximates the char- Making the Points to Win Your Case: How Juries Decide Whyte 253

acteristics and strengths of the actual plaintiff lawyer. Every effort should be made to simulate the strength and weaknesses of the actual cases that will be presented at the time of trial. D. Liability and damages Liability and damages are typically tested during the research. If liability is a close call and consideration is being given by the defense to stipulating to liability, two research studies may be done, one in an admitted liability setting, and the other where liability is contested. Both studies would still measure damages. E. Test the theory of the case Every effective trial attorney knows the importance of establishing a clear case theme/theory. A mock trial and/or focus group helps the trial attorney to focus, and even identify, a compelling case theme. Mock trials can provide trial counsel with important insight as to which case themes and arguments have the most positive impact upon juries, and which themes or arguments may be ineffective and therefore should be rejected. F. Test your trial lawyer Mock trials may also be used as a means to test the credibility, believability, sincerity and likeability of the trial lawyer. Often clients and carriers will use the opportunity to evaluate their proposed trial lawyer. Although lawyers may need to have a thick skin in this situation, effective criticism and feedback received from prospective jurors in the actual venue can be invaluable for counsel in honing their trial skills and ability, but also for the client in making decisions as to the trial team. VI. Using Mock Trial Research to Assist in the Evaluation of the Case A. Testing the pure exposure value of the case Jury research may be used to determine the potential dollar value of the case. Although not exact, mock trial verdicts will provide the client and/or carrier with an idea of what a potential monetary verdict may be. In most studies, jurors are required (following the close of the presentation) to provide their individual verdict, following which the jurors deliberate as a group. Every attempt is made for the jury as a group to reach either an unanimous or at least a majority verdict. B. Testing liability theories Jury research is extremely helpful in testing liability theories, and determining which potential defense liability theory has the most impact. It will also be an opportunity to determine if a particular defense which may be potentially inflammatory, is appealing to a jury or not. C. Do results of the mock trial affect carrier evaluation? Mock trial research can certainly impact carrier evaluation. Particularly where a carrier is located out of state and may not have familiarity with the venue where the case will be tried. Seeing and hearing a mock jury deliberate and reach a verdict can be extremely helpful (and sobering), assisting the carrier with the evaluation of the case. 254 Construction Law Seminar September 2012

VII. Using Mock Trials to Assist in Witness Preparation Mock trials can be an extremely useful tool to assist in preparing witnesses for deposition and/or trial. If witnesses have already been deposed, the jury may be shown video clips of the witness deposition and can then be asked to provide feedback as to witness demeanor, expertise, trustworthiness and credibility. With respect to expert witnesses, mock jury feedback may be helpful in evaluating the credibility of expert witnesses and assisting in how best to present the expert witness testimony. Mock jury feedback with respect to expert presentation helps the expert create context, and present the testimony in terms of people and stories instead of probabilities and methodologies. VIII. When Preparing For a Mock Trial or Focus Group, the Following Questions Should Be Addressed at the Beginning of the Case Study to Help Keep the Study Focused What are the three most important issues in the case? What are my five best pieces of evidence - how can I strengthen these? What are my five worst pieces of evidence - how can I eliminate or minimize these? What is the best story of the case? How can I best use the opposing case to present my case? How can I help my witnesses to be more confident and clearer? What is a jury likely to award: In the case in the best case scenario? Worst case scenario? Moderate case scenario? What are the community/cultural or personal values and beliefs, experiences and views of the potential jury pool that will affect how they view the case? What are the most confusing or complicated issues? How can I, my witnesses, and my experts help clarify the issues? IX. Conduct of a Mock Trial/Focus Group A. Selecting an unbiased panel from the venue Typically, a pool of 40 jurors is selected from the venire. During deliberations, the 40 jurors may be broken up into 4 groups of 10. Mock jurors are typically selected using the same methods with which actual jurors are selected, including DMV and voter records. Mock jurors are paid a reasonable compensation for their participation. B. Creating the presentation Consideration should be given to selecting the trial attorneys who will make the plaintiff and defense presentation at the mock trial/focus group. With respect to presentation of witness testimony, clips of actual videotaped deposition may be shown. Another alternative is to use paid actors who simulate the characteris- Making the Points to Win Your Case: How Juries Decide Whyte 255

tics of the actual witnesses. The goal in creating the presentation is to create a fair representation of the case, and not necessarily to win at all costs. The most important aspect of the mock trial/focus group is to present a comprehensive plaintiff closing, followed by a comprehensive defense closing, and then a brief plaintiff rebuttal. The closing arguments should include reference to all of the important testimony and exhibits. Use of demonstrative evidence can be very helpful. X. Jury Deliberations Jury deliberations are typically undertaken with the assistance of moderators. Deliberations are usually monitored with camcorders, with a live feed to the lawyers and clients who view the deliberations from a separate room. Prior to the deliberations, the jurors are provided jury instructions that simulate the instructions that will be given in the actual trial. Every effort should be made to allow the jury to deliberate with the least amount of interference and/ or assistance from the moderators. XI. Use of Mock Trial/Focus Group Research at Different Stages of Litigation A. Pre-litigation In today s litigious climate, many carriers have developed a rapid response program to address catastrophic injuries/damages when they happen. These rapid response programs often involve getting counsel and even experts/accident reconstructionists/investigators on scene immediately or shortly following the incident. As part of these rapid response programs, carriers may also make selective use of an early apology (where appropriate) to the wronged victim, in an effort to set the stage for early resolution. Studies have shown that apologies can avoid law suits, promote settlement, reduce tension, change the dynamics of settlement, and humanize large corporations and potentially give injured parties closure. As part of reaching an early resolution, the use of mock trial and focus group research can be invaluable in assessing the settlement value. B. Pre-mediation Pre-mediation focus groups and/or mock trial research can be helpful in assessing damages, assessing issues of disputed liability and/or comparative negligence, and also in determining percentages of liability in cases of multiple party involvement. C. Pre-trial Jury research conducted pre-trial can be helpful in preparing witnesses for trial, developing trial strategies, floating trial balloons, preparing key witnesses and experts, and preparing and honing the trial team. It can also be helpful in identifying jurors who may be sympathetic and/or predisposed to your side of the case. Finally, jury research conducted pre-trial can be helpful in identifying case weaknesses and determining how to best overcome weaknesses. 256 Construction Law Seminar September 2012

XII. Conclusion Mock trial research is not about who wins or loses. The most important goal is the information and the data developed from the mock trial. Identify the mock jurors who are against you and determine what can be done to win these jurors over. Stay away from presenting potentially inadmissible evidence at the mock trial. On the other hand, if there is evidence that may be admissible, rather err on the side of caution by presenting this evidence to gain a more realistic evaluation. Important feedback from the mock jurors includes what can be done to make your case stronger. Also, what facts would the jurors have liked to have heard that they did not. If you are presenting video clips of witnesses, make sure there is continuity to the clips, in order to give the jurors a good sense of the credibility of the witness. Identify what aspects of the case the jurors found confusing, and what can be done to make the case clearer. Try to identify the overriding, deciding issue for the jurors. A mock trial not only offers the opportunity to evaluate your case, but also an opportunity to evaluate the trial lawyer. Mock jurors can assess your likeability, credibility, believability and sincerity. Mock trials provide an important forum for the mock jurors to give feedback regarding demonstrative evidence. Find out if there are additional graphics or charts that might have been helpful. If you have a potential witness who is not open to constructive criticism, consider allowing the witness to receive the jury deliberation feedback to assist in helping the witness prepare for trial. Making the Points to Win Your Case: How Juries Decide Whyte 257

A Review and Update of Anti- Indemnity Statutes Kamy Molavi Freeman Mathis & Gary LLP 100 Galleria Parkway, Suite 1600 Atlanta, GA 30339-5948 (770) 818-1416 kmolavi@fmglaw.com

Kamy Molavi is a construction lawyer. He holds bachelors and masters degrees in Civil Engineering from the Georgia Tech, and a law degree from Emory University School of Law. Before he became a lawyer, he worked for general contracting firms as a project manager and estimator. Mr. Molavi taught a graduate course on construction law at Southern Polytechnic State University. He is an arbitrator on the panel of the American Arbitration Association. Selected as one of Chambers America s Leading Business Lawyers, he was also included in Law & Politics Super Lawyers 2004 2012.

A Review and Update of Anti-Indemnity Statutes Table of Contents I. Background...263 II. Policy Behind Anti-Indemnity Legislation...263 III. Extent of the Indemnitee s Fault...263 A. Sole Negligence Statutes...264 B. Any Negligence Statutes...265 IV. Effect on Design Professionals...268 V. Effect on Insurance Requirements...270 VI. Additional Considerations...271 VII. Recent Case Law Trends...272 VIII. Implications/Advice...273 A Review and Update of Anti-Indemnity Statutes Molavi 261

A Review and Update of Anti-Indemnity Statutes I. Background It is quite common for parties involved in construction projects to include indemnity provisions within their construction contracts. For example, the owner of a construction project may require the other construction participants, such as the general contractor, to indemnify the owner for certain claims. In recent years, many states have enacted statutes that affect the validity of these provisions. This paper explores the different types of anti-indemnity statutes that have emerged, recent trends, and general considerations when reviewing anti-indemnity statutes. II. Policy Behind Anti-Indemnity Legislation An indemnification agreement in construction contracts is a common mechanism by which one party can shift the risk of its negligence to another construction participant. In many instances, the party seeking to be indemnified has a superior bargaining power to the party that is providing the indemnification. As a result of the increasing use of indemnification provisions in standard contracting agreements, many in the construction contracting community lobbied their local legislatures for laws to restrict these indemnification provisions. Bruner & O connor Construction Law 10:77. Public policy in many states urges courts to prevent the party with superior power from requiring a party with inferior power to be the former s insurer, especially when the party with inferior bargaining power is not at fault for the loss. Scott C. Turner, Contractual Liability Coverage May Circumvent Anti-Indemnity Statutes, Insurance Coverage of Construction Disputes 10:11, (June 2012). This has led many courts and legislatures to reject, modify, or invalidate such risk-shifting provisions. Bruner & O Connor Construction Law 10:71. Another popular method for parties in construction to transfer risk is by requiring a contractor to name another party as an additional insured on the contractor s general liability insurance policy. While the protection provided by an indemnity agreement and the coverage provided to an additional insured on a contractor s insurance policy may overlap, they are separate and distinct risk-transfer tools. Ann Rudd Hickman, Additional Insured Status: It s not what it used to be, American Agent & Broker, Vol. 77, Issue 7, 2005 WLNR 12589802 (July 1, 2005). Legislatures and courts generally distinguish between contract provisions that require one party to indemnify the other, and contract provisions that require on party to obtain indemnity (insurance) through a third party for the other. Bruner & O Connor Construction Law 10:82. In other words, a contract for indemnity may be rendered void by some of the anti-indemnity statutes discussed below, while a contract requiring one construction participant to obtain insurance for the other may survive them. Bruner & O Connor Construction Law 10:82. III. Extent of the Indemnitee s Fault A majority of states have enacted anti-indemnity statues that restrict, modify, or invalidate indemnification agreements in construction contracts. With respect to the degree of fault against which indemnity may be barred, two types of anti-indemnity statutes have emerged across the nation. In this article these two types are referred to as sole negligence statutes and any negligence statues. This article also discusses variations as to the application of statutes to design professionals. Finally, we address some state statutes that also invalidate insurance agreements, including additional insured provisions. A Review and Update of Anti-Indemnity Statutes Molavi 263

A. Sole Negligence Statutes Nearly half of the state anti-indemnity laws void provisions that attempt to require the indemnitor to indemnify the indemnitee for the indemnitee s sole negligence or willful misconduct. Bruner & O Connor Construction Law 10:90. A loss is said to arise from the sole negligence of a party if no other party s negligence contributed to the damage. Jeffrey M. Hummel and Z. Taylor Shultz, Indemnification Principles and Restrictions on Construction Projects, Construction Briefings No. 2005-8 (August 2005). Indemnity in Sole Negligence states is allowed when the indemnitor and indemnitee are each partially at fault, or a portion of fault can be attributed to a third person. Bruner & O Connor Construction Law 10:90. Stated another way, under these statutes an indemnitor may have to pay for the injury even if the indemnitee is 99 percent responsible for the injury. Dwight G. Cogner, et al., Construction Accident Litigation 6:23 Anti-indemnity statutes (June 2012). Further, in most states that only invalidate sole negligence provisions in indemnity contracts, workers compensation and insurance agreements are not affected by the sole negligence indemnity prohibition in the statute. Gerald A. Melchiode and Meagan E. Messina, The Trend of Anti- Indemnity Law, A Cognitive Illusion. However, several state statutes are silent on these issues. More on these topics will be discussed below. Examples of typical sole negligence anti-indemnity statutes are those enacted in Alaska and Georgia. The Alaska anti-indemnity statute, Alaska Stat. 45.45.900, provides: A provision, clause, covenant, or agreement contained in, collateral to, or affecting a construction contract that purports to indemnify the promisee against liability for damages for (1) death or bodily injury to persons, (2) injury to property, (3) design defects, or (4) other loss, damage or expense arising under (1), (2), or (3) of this section from the sole negligence or wilful misconduct of the promisee or the promisee s agents, servants, or independent contractors who are directly responsible to the promisee, is against public policy and is void and unenforceable; however, this provision does not affect the validity of an insurance contract, workers compensation, or agreement issued by an insurer subject to the provisions of AS 21, or a provision, clause, covenant, or agreement of indemnification respecting the handling, containment, or cleanup of oil or hazardous substances as defined in AS 46. (Emphasis added). The Georgia statute, O.C.G.A. 13-8-2(b), is also a sole negligence statute, but has slightly different language: A covenant, promise, agreement, or understanding in or in connection with or collateral to a contract or agreement relative to the construction, alteration, repair, or maintenance of a building structure, appurtenances, and appliances, including moving, demolition, and excavating connected therewith, purporting to require that one party to such contract or agreement shall indemnify, hold harmless, insure, or defend the other party to the contract or other named indemnitee, including its, his, or her officers, agents, or employees, against liability or claims for damages, losses, or expenses, including attorney fees, arising out of bodily injury to persons, death, or damage to property caused by or resulting from the sole negligence of the indemnitee, or its, his, or her officers, agents, or employees, is against public policy and void and unenforceable. (Emphasis added). While these two statutes are similar, they highlight the distinctions that may exist amongst sole negligence state statutes. For example, the Alaska statute on its face is much broader. In contrast to the Georgia statute, the Alaska statute applies not only to the sole negligence of the indemnitee, but also to its willful misconduct. Thus, both types of conduct would preclude indemnification. The Alaska statute also applies to 264 Construction Law Seminar September 2012

losses resulting from bodily injury, damage to property, design defects, and other loss, whereas the Georgia statute only applies to bodily injury and property damage. While these distinctions are apparent on the faces of the statutes, it is always prudent to research the relevant case law in the jurisdiction to determine how the courts interpret the statute at issue. B. Any Negligence Statutes Under statutes that only prohibit indemnification of another person s sole negligence, a significant amount of risk shifting can still occur. Bruner & O Connor Construction Law 10:77. Several states have enacted versions a different variety of anti-indemnity statute, referred to by this author as any negligence states. This type of anti-indemnity statute voids contract provisions that require indemnification for losses or damages arising out of the indemnitee s negligence, whether sole or partial. Allen Holt Gwyn and Paul E. Davis, Fifty-State Survey of Anti-Indemnity Statues and Related Case Law, The Construction Lawyer, pg. 26 (Summer 2003). Thus, this type of anti-indemnity statute would necessarily include sole negligence prohibitions. In states that have any negligence anti-indemnity statutes, the indemnitor is more restricted from shifting the risk onto a non-negligent party than in sole negligence states. There are also variations among any negligence anti-indemnity statutes. For example, the differences between Massachusetts and Mississippi laws are noted below. The Massachusetts anti-indemnity statute, Mass. Gen. Laws, ch. 149, 29C, provides as follows: Any provision for or in connection with a contract for construction, reconstruction, installation, alteration, remodeling, repair, demolition or maintenance work, including without limitation, excavation, backfilling or grading, on any building or structure, whether underground or above ground, or on any real property, including without limitation any road, bridge, tunnel, sewer, water or other utility line, which requires a subcontractor to indemnify any party for injury to persons or damage to property not caused by the subcontractor or its employees, agents or subcontractors, shall be void. (Emphasis added). Similarly, the Mississippi anti-indemnity statute, Miss. Code 31-5-41, states: With respect to all public or private contracts or agreements, for the construction, alteration, repair or maintenance of buildings, structures, highway bridges, viaducts, water, sewer or gas distribution systems, or other work dealing with construction, or for any moving, demolition or excavation connected therewith, every covenant, promise and/or agreement contained therein to indemnify or hold harmless another person from that person s own negligence is void as against public policy and wholly unenforceable. (Emphasis added). Thus, pursuant to the language of the Massachusetts statute, an agreement to indemnify an indemnitee for the indemnitee s negligence or the negligence of other third parties would be void. In contrast, the Mississippi statute only voids contract provisions in which the indemnitee seeks indemnification for their own negligence. It is noteworthy that the Massachusetts statutes bars certain indemnification clauses in subcontracts, but does not affect such clauses in prime contracts. It may apply to design agreements only to the extent they can be construed as being connected to one of the enumerated contracts. Based on its wording, applying the Mississippi provision to an agreement for design or other services ancillary to construction would seem even more tenuous. The chart summarizes our review of the anti-indemnity statutes in the 50 states. For similar charts that have been compiled by other authors, please see Anti-Indemnity Statutes in the 50 States, The Founda- A Review and Update of Anti-Indemnity Statutes Molavi 265

tion of the American Subcontractors Association, Inc. (2009) and Allen Holt Gwyn and Paul E. Davis, Fifty-State Survey of Anti-Indemnity Statues and Related Case Law, The Construction Lawyer, pg. 28-33 (Summer 2003). State Bars Indemnity for Sole Negligence Bars Indemnity for Any Negligence Comments Alabama No statute Alaska X Alaska Stat. 45.45.900. Exception for Hazardous substances. Arizona X (private work) X (public work) Ariz. Rev. Stat. 32-1159, 34-226, 41-2586. Exception for entry onto adjacent land. Arkansas X Ark. Code 4-56-104, 22-9-214. California X X (residential construction defect only) Civ. Code 2782 [AB 758 (2005)], 2783. Exception for entry onto adjacent land. Colorado X Colo. Rev. Stat. 13-50.5-102, 13-21- 111.5. Connecticut X Conn. Gen Stat. 52-572k. Delaware X Del. Code, Title 6, 2704. D.C. No statute Florida X (public work) Fla. Stat. 725.06. Georgia X O.C.G.A. 13-8-2. Hawaii X Hawaii Rev. Stat. 431:10-222. Idaho X Idaho Rev. Stat. 29-114. Illinois X Ill. Compiled Stat., 740 ILCS 35/1-3. Indiana X Ind. Code 26-2-5, Ind. Code 26-2-5-2 dangerous instrumentality exception Iowa X Iowa Code 537A.5. Kansas X Kansas Stat. 16-121 Kentucky X Kentucky Rev. Stat. 371.180. Louisiana X (only protects prime contractor on public works) La. Rev. Stat. 38:2216.G Maine No statute Maryland X Md. Code. Ann., Cits & Jud. Proc. 5-401 266 Construction Law Seminar September 2012

State Bars Indemnity for Sole Negligence Bars Indemnity for Any Negligence Comments Massachusetts X Mass. Gen. Laws, ch. 149, 29C. Michigan X Mich. Comp. Laws 691.991 Minnesota X Minn. Stat. 337.01, 337.02. Exception that owner may indemnify for strict liability under environmental laws. Mississippi X Miss. Code 31-5-41. Missouri X Mo. Rev. Stat. 434.100. Montana X Montana Rev. Code 28-2-2111. Nebraska X Neb. Rev. Stat. 25-21, 187. Nevada No statute. But see Reyburn Lawn & Landscape Designers, Inc. v. Plaster Development Co., Inc., 255 P.3d 268 (Nev. 2011) (stating that, while the parties are free to contractually agree to indemnify another for its own negligence, an express or explicit reference to the indemnitee s own negligence is required ). New Hampshire X N.H. Rev. Stat. 338-A:1 and 338-A:2. New Jersey X N.J. Stat 2A:40A-1 New Mexico X N.M. Stat. 56-7-1. New York X N.Y. Gen. Oblig. Laws 5-322.1. North Carolina X N.C. Gen. Stat. 22B-1. North Dakota No statute for typical construction contracts. But see N.D. Cent. Code 9-08- 02.1. Contract cannot make contractor liable for errors or omissions of owner or owner s agent. Ohio X Ohio Rev. Stat. 2305.31. Oklahoma X 15 Okl. Stat. 221. Oregon X Or. Rev. Stat. 30.140 Pennsylvania No statute for typical construction contracts, but Pa. Stat., Title 68 491, construction contracts that indemnify design professionals are against public policy Rhode Island X R.I. Gen. Laws 6-34-1 South Carolina X S.C. Code 32-2-10 South Dakota X S.D. Codified Laws 56-3-18 A Review and Update of Anti-Indemnity Statutes Molavi 267

State Bars Indemnity for Sole Negligence Bars Indemnity for Any Negligence Comments Tennessee X Tenn. Code 62-6-123 Texas X (public work) Utah X Tex. Stat. Civ. Prac. & Rem. Code 130.002 Utah Code 13-8-1 exception permits indemnity of owner Vermont No statute Virginia X Va. Code 11-4.1 Washington X Wash. Rev. Code 4.24.115 West Virginia X W. Va. Code 55-8-14 Wisconsin X Wis. Stat. 895.447 Wyoming No statute regarding typical construction contracts; Wyoming Stat. 30-1-131, 132. prohibits contracts pertaining to any well for oil, gas, water or mine for any material from indemnifying indemnitee for his own negligence IV. Effect on Design Professionals In terms of the effect of their anti-indemnity statutes on design professionals, the states fall into four categories, as follows: In the first group of states, there are statutes that expressly void only indemnification for design professionals. Allen Holt Gwyn and Paul E. Davis, Fifty-State Survey of Anti-Indemnity Statues and Related Case Law, The Construction Lawyer, pg. 27 (Summer 2003). Some of the states in this group also have separate anti-indemnity statutes that apply to parties other than designers, and some do not. For example, Pennsylvania s anti-indemnity statute, Pa. Stat., Title 68 491, applies only to design professionals: Every covenant, agreement or understanding in, or in connection with any contract or agreement made and entered into by owners, contractors, subcontractors or suppliers whereby an architect, engineer, surveyor or his agents, servants or employees shall be indemnified or held harmless for damages, claims, losses or expenses including attorneys fees arising out of: (1) the preparation or approval by an architect, engineer, surveyor or his agents, servants, employees or invitees of maps, drawings, opinions, reports, surveys, change orders, designs or specifications, or (2) the giving of or the failure to give directions or instructions by the architect, engineer, surveyor or his agents, servants or employees provided such giving or failure to give is the primary cause of the damage, claim, loss or expense, shall be void as against public policy and wholly unenforceable. (Emphasis added). Whereas New Hampshire has two separate anti-indemnity statutes, one for design professionals and one for other parties to construction contracts: 268 Construction Law Seminar September 2012

N.H. Rev. Stat. 338-A:1: Any agreement or provision whereby an architect, engineer, surveyor or his agents or employees is sought to be held harmless or indemnified for damages and claims arising out of circumstances giving rise to legal liability by reason of negligence on the part of any said persons shall be against public policy, void and wholly unenforceable. (Emphasis added). N.H. Rev. Stat. 338-A:2: Any provision for or in connection with a contract for construction, reconstruction, installation, alteration, remodeling, repair, demolition, or maintenance work, including without limitation, excavation, backfilling or grading, on any building or structure, whether underground or above ground, or on any real property, including without limitation any road, bridge, tunnel, sewer, water, or other utility line, which requires any party to indemnify any person or entity for injury to persons or damage to property not caused by the party or its employees, agents, or subcontractors, shall be void. (Emphasis added). In each of the second group of states, the general anti-indemnification statute expressly includes design professionals within its plain language and scope. Allen Holt Gwyn and Paul E. Davis, Fifty-State Survey of Anti-Indemnity Statues and Related Case Law, The Construction Lawyer, pg. 27 (Summer 2003). These statutes can apply to agreements to indemnify a design professional for either its sole negligence or for any negligence on its part. Jeffrey M. Hummel and Z. Taylor Shultz, Indemnification Principles and Restrictions on Construction Projects, Construction Briefings No. 2005-8 (August 2005). For example, the South Carolina statute, S.C. Code 32-2-10, expressly includes design professionals in it s statute prohibiting indemnification for sole negligence : Notwithstanding any other provision of law, a promise or agreement in connection with the design, planning, construction, alteration, repair or maintenance of a building, structure, highway, road, appurtenance or appliance, including moving, demolition and excavating, purporting to indemnify the promisee, its independent contractors, agents, employees, or indemnitees against liability for damages arising out of bodily injury or property damage proximately caused by or resulting from the sole negligence of the promisee, its independent contractors, agents, employees, or indemnitees is against public policy and unenforceable. (Emphasis added). While North Carolina, N.C. Gen. Stat. 22B-1, expressly includes design professionals in its statute prohibiting indemnification for any negligence : Any promise or agreement in, or in connection with, a contract or agreement relative to the design, planning, construction, alteration, repair or maintenance of a building, structure, highway, road, appurtenance or appliance, including moving, demolition and excavating connected therewith, purporting to indemnify or hold harmless the promisee, the promisee s independent contractors, agents, employees, or indemnitees against liability for damages arising out of bodily injury to persons or damage to property proximately caused by or resulting from the negligence, in whole or in part, of the promisee, its independent contractors, agents, employees, or indemnitees, is against public policy and is void and unenforceable. (Emphasis added). The third group of states have general anti-indemnity statutes that do not expressly address designers but can be (or have been) interpreted to apply to design professionals. Georgia is one of the states in this group. A Review and Update of Anti-Indemnity Statutes Molavi 269

In the final group are states with anti-indemnity statutes that arguably do not apply to design professionals, either expressly or impliedly. Examples of States whose anti-indemnity statute do not appear to apply by their express terms to design professionals are the Massachusetts and Mississippi statutes cited above. V. Effect on Insurance Requirements An insurance policy procured by the indemnitor could provide protection to the indemnitee for the indemnitee s negligence. Bruner & O Connor Construction Law 10:90. The majority of anti-indemnity laws do not expressly affect the validity of an agreement for insurance covering the negligence of a party other than the named insured. Most indemnification statues allow agreements that shift a risk to a party s insurance company even though requiring the same party to indemnify another against the same risk may not be permissible. Bruner & O Connor Construction Law 10:91. The Arkansas statute, Ark. Code 4-56-104, addresses insurance in detail. A portion of that statute provides as follows: The parties to a construction contract or construction agreement may enter into an agreement in which: (1) The first party indemnifies, defends, or holds harmless the second party from the first party s negligence or fault or from the negligence or fault of the first party s agent, representative, subcontractor, or supplier; (2) The first party requires the second party to provide liability insurance coverage for the first party s negligence or fault if the construction contract or construction agreement requires the second party to obtain insurance and the construction contract or construction agreement limits the second party s obligation to the cost of the required insurance; (3) The first party requires the second party to provide liability insurance coverage for the first party s negligence or fault under a separate insurance contract with an insurance provider; or (4) The first party requires the second party to name the first party as an additional insured as a part of the construction agreement or construction contract. (Emphasis added). The Arkansas statute expressly allows contracts for insurance, with some limitations, whether the agreement is for separate insurance or to name the indemnitee as an additional insured under the indemnitor s insurance contract. Thus, a party wishing to be indemnified sometimes will attempt to circumvent anti-indemnity statues by requiring another party to name the former as an additional insured under the latter s insurance policy. One of the main reasons an additional insured arrangement is used is so that the additional insured will not be limited to the coverage that the insurer owes for the liability of the named insured. Federated Service Ins. Co. v. Alliance Constr., LLC, 282 Neb. 638, 805 N.W.2d 468 (2011). This mechanism can succeed if the anti-indemnity statute in the controlling jurisdiction does not foreclose the additional insured approach. For example, in October 2011, the Supreme Court of Nebraska recognized the common practice for contract provisions to require the subcontractor to name the owner and general contractor as additional insureds under the subcontractor s commercial general liability policy. Id. at 282 Neb. 648, 805 N.W.2d 477. The Court explained that, when an additional insured agreement is in place, the coverage is not limited to what the insurer owes for the subcontractor s contractual liability under the indemnity agreement. Id. Therefore, even if the indemnity agreement is found invalid, the coverage extended to another party under an additional insured endorsement in not affected. Id. 270 Construction Law Seminar September 2012

A variant of the insurance approach to risk management is requiring a party to the contract to purchase a separate insurance policy in the name of another. Finally, courts in some jurisdictions have found that their anti-indemnity statutes do not apply where the underlying contract couples the indemnification clause with one that requires one party to obtain contractual liability insurance. Scott, C. Turner, Contractual Liability Coverage May Circumvent Anti-Indemnity Statutes, Insurance Coverage of Construction Disputes 10:11 (June 2012). Interestingly, this exception to the anti-indemnity statutes sometimes applies even if the party charged with obtaining the insurance coverage fails to do so, so long as this failure would constitute a breach of contract. Id. Thus, an indemnification clause that would not be enforceable by itself may be enforced as a result of failure by the indemnitor to comply with the corollary obligation to procure contractual liability insurance. In contrast to the Arkansas statute discussed above, which expressly allows for risk-shifting to an insurance company, some states have expanded their anti-indemnity statutes to also void contract provisions that seek to transfer risk via additional insured coverage. See States curb ability to shift contractor risk; Antiindemnity changes cut additional insureds from some CGL policies, Business Insurance, Volume 46, Issue 18 (April 30, 2012); Paul Primavera, Evolving AI Endorsement Interpretations Create More Headaches for Contractors, National Underwriter Property and Casualty, 2009 WLNR 3489852 (February 23, 2009). These states presumably find it equally inequitable to allow a party to shelter itself against the consequences of its own negligence whether this is done by mandating that another party insure procure insurance or by an indemnification clause covering the same negligence. Ann Rudd Hickman, Additional Insured Status: It s not what it used to be, American Agent & Broker, Volume 77, Issue 7, 2005 WLNR 12589802 (July 1, 2005). States that have chosen to expand their anti-indemnity laws to apply to additional-insured endorsements have left many contractors without the traditional risk-transfer tools to which that they may be accustomed. Paul Primavera, Evolving AI Endorsement Interpretations Create More Headaches for Contractors, National Underwriter Property and Casualty, 2009 WLNR 3489852 (February 23, 2009). While each states statute may appear to be clear with regard to insurance, it is also important to analyze the case law in each state to determine how Courts are interpreting the statutes. For example, in Peeples v. Detroit, 297 N.W.2d 839 (Mich. App. 1980), the Court of Appeals in Michigan found that while the state s antiindemnity statute was silent with regards to insurance, it was contrary to public policy for a party to insulate itself from liability by requiring someone else to purchase insurance for the former. Common law in other jurisdictions distinguishes between agreements for insurance that are embedded within the agreement for indemnity in the contract and those agreements for insurance that are separate. For example, the Court of Appeals in Illinois has stated that a contract requiring one party to obtain insurance for another may be invalid where the contract for insurance obligation is inextricably intertwined with a void indemnity provision. W.E. O Neil Constr. Co. v. General Cas. Co. of Ill., 321 Ill. App. 3d 550, 748 N.E.2d 667 (Ill. App. 2001). VI. Additional Considerations Some states have addressed the effect of workers compensation laws on indemnity provisions. The majority of states that address this issue have found that indemnification is not affected by any workers compensation laws or immunity. Gwyn, Allen Holt Gwyn and Paul E. Davis, Fifty-State Survey of Anti-Indemnity Statues and Related Case Law, The Construction Lawyer, pg. 27 (Summer 2003). Also, some states differentiate between private and public construction works. For example some state statutes provide that agreements that purport to indemnify for sole negligence are invalid for public construction projects, but not for private projects. An illustration of this occurs in Arizona and Florida: A Review and Update of Anti-Indemnity Statutes Molavi 271

Arizona has separate anti-indemnity statutes for private and public construction contracts. Section 32-1159 of the Arizona Statutes applies to private contracts and invalidates indemnity provisions that seek to indemnify the indemnitee for its sole negligence. Whereas, Sections 34-226 and 41-2586 invalidate indemnity provisions in public contracts that purport to indemnify the indemnitee from damages resulting from any negligence of the indemnitee. See Ariz. Rev. Stat. 32-1159; 34-226 and 41-2586. Florida s anti-indemnity statute incorporates language applicable to both public and private construction contracts. Section 725.06(1) limits, but does not bar, indemnity provisions in contracts for private works by invalidating indemnity provisions in such contracts unless the contract contains a monetary limitation on the extent of the indemnification that bears a reasonable commercial relationship to the contract and is part of the project specifications or bid documents, if any. Indemnity provisions in public contracts, however, may only require a party to indemnify the other party to the extent the damage is caused by the indemnifying party. See Fla. Stat. 725.06(2), (3). VII. Recent Case Law Trends Recent case law addressing anti-indemnity laws has highlighted some of the fine points in the statutes and public policies of the states. One current issue is whether the contract qualifies as a construction contract and thus is subject to state s anti-indemnity statute. All of the states that have analyzed this issue recently have decided that the term construction contract in the anti-indemnity statutes should be interpreted broadly. Georgia courts, for example, have interpreted the anti-indemnity statute broadly to apply to assignment agreement transferring the maintenance and repair of a residential subdivision to the homeowners association. Kennedy Development Co., Inc. v. Camp, 290 Ga. 257, 719 S.E.2d 442 (2011) (broadly interpreting the and interpreting language to hold another party harmless of any and all damages no matter the origin of the claim or who is at fault as indemnification for sole negligence in violation of the statute). Likewise, New Mexico has interpreted the applicability of its anti-indemnity statute to encompass maintenance activities in improving a property and agreements for rental equipment to be used in construction activities. Holguin v. Fulco Oil Services L.L.C., 149 N.M. 98, 245 P.3d 42 (N.M. App. 2010) (looking to the plain language of maintenance and finding that language of statute does not limit its application to maintenance activities required during a construction project; concluding that work on an improvement to real property that is required to keep that improvement in a good state of repair and operating properly is within the scope of the construction anti-indemnity statute ); United Rentals Northwest, Inc. v. Yearout Mechanical, Inc., 148 N.M. 426, 237 P.3d 728 (N.M. Supreme Ct. 2010) (interpreting relating to construction broadly to include agreements for rental equipment designed or intended to be used in construction activities and holding that the anti-indemnity protections of the statute apply to such agreements). Another recent trend involves the interplay between indemnity and insurance, and specifically those statutes which contain an insurance savings clause. These situations arise in states where the anti-indemnity statute expressly prohibits contractual provisions that require the indemnitor to indemnify the indemnitee for the indemnitee s negligence, and also expressly state that the code section does not affect the validity of an insurance contract and/or any other agreement issued by an insurer. See Chrysler Corp. v. Merrell & Garaguso, Inc., 796 A.2d 648, 651-53 (Del. 2002) (citing Heat & Power Corp. v. Air Products & Chemicals, Inc., 320 Md. 584, 578 A.2d 1202 (1990)). An example of an insurance savings clause is contained in the Alaska statute cited above, the applicable portion stating, this provision does not affect the validity of an insurance contract, workers compensation, or agreement issued by an insurer. Alaska Stat. 45.45.900. The interplay between 272 Construction Law Seminar September 2012

these two statutory provisions has not uniformly interpreted among the various jurisdictions. See Chrysler Corp. v. Merrell & Garaguso, Inc., 796 A.2d 648, 651-53 (Del. 2002). As one example in a coverage dispute, the Delaware Supreme Court found that despite the public policy against indemnification for someone else s negligence, whether the indemnification is direct or indirect, the insurance savings provision is enforceable. Id. The Delaware Supreme Court stated that insurance companies are sophisticated and should not be able to use the anti-indemnity statute as a shield to decline coverage after it is purchased. Id. Some states are statutorily silent with respect to the validity of indemnity agreements in construction contracts, but their courts recently have addressed the issue. For example, the Nevada Supreme Courts recently found that a party can be contractually required to indemnify another for the indemnitee s negligence, but only if the contract for indemnity contains an express or explicit reference to the indemnitee s own negligence. Reyburn Lawn & Landscape Designers, Inc. v. Plaster Development Co., Inc., 255 P.3d 268 (Nev. 2011). Thus, a general statement requiring the indemnitor to indemnify the indemnitee for any and all claims is not sufficient in Nevada. Id. VIII. Implications/Advice In sum, participants in construction contracts and their counsel should carefully review the applicable statutes in their states, the corresponding case law, and the language of the contracts that they are entering into. While an anti-indemnity statute may appear clear on its face, the relevant case law may have interpreted the statute in an unexpected way. For larger construction projects, a wrap-up policy may be a way to make sure all participants are protected and insured from their own negligence and the negligence of others on the project, thus hopefully avoiding some indemnity and coverage disputes because a single carrier is responsible for all claims. Joanne Wojcik, Wrap-up Liability Coverage Offers Additional Protection, Business Insurance, Vol. 46 Issue 18, 2012 WLNR 9341729 (April 30, 2012). Typically an administrator is engaged to function as the control point for all claims and streamline the claims process. Using wrap-up insurance programs, project owners can ensure that there are no gaps in coverage with regard to general liability and workers compensation, as well as sufficient specific coverage for the contractors. The most common type of wrap-up program is the Owner Controlled Insurance Program (OCIP), whereby the owner procures insurance covering multiple parties. The basic wrapup concept has been adopted more recently by contractors and is referred to as a Contractor Controlled Insurance Program (CCIP). A Review and Update of Anti-Indemnity Statutes Molavi 273

The Lack of Appeal of Arbitration for Non-Signatories Adrienne D. Cohen Julie R. Ursic The Law Offices of Adrienne D. Cohen 1551 N. Tustin Ave, Ste. 750 Santa Ana, CA 92705 (714) 954-0790 adc@adcohen.com

Adrienne D. Cohen is the founder of the Law Offices of Adrienne D. Cohen, an eleven attorney firm with offices in both Southern and Northern California. She specializes in insurance coverage and defense and has represented subcontractors in construction defect litigation for over 20 years. She is a member of CALPASC and has been named a Southern California Super Lawyer with several of her associates named Rising Stars. She has been a member of DRI since 2003.

The Lack of Appeal of Arbitration for Non-Signatories Table of Contents I. Arbitration and Non-Signatories...279 II. Non-Signatory Compelling Arbitration...279 III. Third-Party Beneficiaries Can Compel Arbitration...280 IV. Employees or Associates Can Compel Arbitration...281 V. Assignees of Contracting Party Can Compel Arbitration...281 VI. Equitable Estoppel Allows Non-Signatories to Compel Arbitration...282 VII. Non-Signatories Bound by Arbitration Provision...282 VIII. Incorporation by Reference...283 IX. Assumption...283 X. Agents...283 XI. Alter Ego...283 XII. Equitable Estoppel...284 XIII. Third Party Beneficiaries...284 The Lack of Appeal of Arbitration for Non-Signatories Cohen 277

The Lack of Appeal of Arbitration for Non-Signatories I. Arbitration and Non-Signatories The mere mention of arbitration evokes anxiety and fear from many lawyers and insurance adjusters across the country. Arbitration is usually forced on parties by contract without any real negotiations. Non signatories obviously have no say in contract requirement for arbitration. However, there can be benefits to arbitration which many parties value. Arbitration allows flexibility and control over the legal process that is not possible in a typical judicial setting. It is also more private and can result in a resolution more quickly than with a lengthy trial. And some parties value the lack of appeal of arbitration because it provides for finality and can save further litigation costs. There are many drawbacks to arbitration, the most noted being the lack of appeal for parties who wish to have an appellate option after their case is decided. Since arbitrators do not have to follow the law, the lack of appeal can leave a party with a bad result and no further recourse. When one thinks of a complex construction defect case, the first thing that comes to mind is the extensive list of parties, which generally includes everyone from the doorbell installer to the framer. Considering the number of parties, arbitration in a complex construction defect action may seem as daunting as a court trial, however, the informal atmosphere and ability to tailor remedies to specific situations can make it an attractive option. One problem often encountered in multi-party litigation is bringing all of the relevant parties to the table. In some situations, it is necessary that parties that did not sign the contract or non-signatories participate. In other situations, it is the non-signatory that is compelling the other parties to arbitration. The Federal Arbitration Act ( FAA ) was originally enacted in 1925 and provides that arbitration agreements shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract. 9 U.S.C. 2. The United States Supreme Court has repeatedly stated that one of the primary goals of the FAA is to make arbitration agreements as enforceable as other contracts, but not more so. Volt Info Sciences Inc. v. Board of Trustees, 489 U.S. 478, 489 (1989). The Reform Uniform Arbitration Act, which has been adopted at least in part by several states, seeks to encourage the enforceability of arbitration at the state level, where state law had previously been hostile to enforcement of arbitration provisions. Where state contract law has been applied to determine the enforceability of an arbitration provision, the results vary from state to state. However, there has been a general trend towards the enforcement of arbitration provisions. Specific to non-signatories, several states have determined that non-signatories maintain many of the same rights to enforcement as signatories to the contract. There are generally two issues that come to mind when discussing arbitration involving non-signatories. The first involves whether non-signatories to the agreement can compel arbitration against someone who is a party to the contract. For instance in the construction context, whether a subcontractor can compel a homeowner to arbitration based on an arbitration agreement between the homeowner and the general contractor. The second issue is whether non-signatories can themselves be compelled to participate in arbitration. Using the same example, can the homeowner compel the non-signatory subcontractor to arbitration? To resolve these issues, we must look at the non-signatory s role in the dispute. II. Non-Signatory Compelling Arbitration Based on the general principals of contract law, our intuition tells us that unless the party is a signatory to the contract, the contract cannot be enforced against them. However, there are exceptions to every rule. The Lack of Appeal of Arbitration for Non-Signatories Cohen 279

III. Third-Party Beneficiaries Can Compel Arbitration A non-signatory has generally been allowed by courts to enforce an arbitration clause against contracting parties under contract law as long as there is the requisite intent by the contracting parties that the non-signatory in question be an intended beneficiary. Jeff DeArman, Comment, Resolving Arbitration s Non- Signatory Issue: A Critical Analysis of the Application of Equitable Estoppel in Alabama Courts, 29 Cumb. L. Rev., 645, 649 (1998). A court will examine the relationship between the factual allegations of the claim and the underlying contract to determine whether a claim falls within the scope of an arbitration agreement. When the factual allegations of the claim generally relate to the contract, such claims arise out of or arise in connection with the contract and are subject to an arbitration provision. David Sawrie, Note, Equitable Estoppel and the Outer Boundaries of Federal Arbitration Law: The Alabama Supreme Court s Retrenchment of an Expansive Federal Policy Favoring Arbitration, 51 Vand. L. Rev. 721, 729 (1998). Third parties claiming the right to performance under an agreement made by others are classified as either intended or incidental beneficiaries of the contract. Rest. 2 nd Contracts 302. In California, the test for determining whether a contract was made for the benefit of a third person is whether an intent to benefit a third person appears from the terms of the contract. If the terms of the contract necessarily require the promisor to confer a benefit on a third person, then the contract, and hence the parties thereto, contemplate a benefit to the third person. The parties are presumed to intend the consequences of a performance of the contract. Johnson v. Holmes Tuttle Lincoln-Merc. 160 Cal.App.2d 290, 297 (1958). The Federal Court in McBro Planning and Development Co. v. Triangle Electrical Construction Co., Inc., 741 F.2d 342 (11th Cir. 1984) ruled in limited circumstances, one who is not a signatory or direct party to such a contract, but whose position or conduct vis-a-vis that contract or one of the parties thereto is such that one may be deemed a third party beneficiary of the contract or otherwise held to be bound by the terms thereof, may be compelled to arbitrate a dispute arising out of or relating to the contract. Agents and creditors are two classes of third party beneficiaries who can compel arbitration even though they are not signatories to a contract, assuming certain conditions are met. Agency relationships are prevalent in the construction industry and therefore it is important to clearly denote any intended beneficiary within the terms of the contract. In Assurant v. Mitchell, 26 So.3d 1171 (2009), an Alabama court ruled that a parent company of a subsidiary insurance company was allowed to compel a homeowner to arbitration because it was a third party beneficiary to a contract between the homeowner claiming damages and the subsidiary insurance company. The plaintiff sued the developer for alleged damage to her home, and Assurant (parent company) and the subsidiary insurance company for bad faith refusal to pay claims. Assurant moved to compel the homeowner to arbitration based on the arbitration agreement in the contract between the subsidiary insurance company and the homeowner. The Court ruled that because plaintiff alleged that Assurant was an agent of the subsidiary and the evidence showed a parent-subsidiary relationship, Assurant was entitled to compel arbitration. Id. at 1177. In addition, alter egos, as agents of the signatory, can compel arbitration. Jim Walter Homes v. Spraggins, 853 So.2d 913 (2002). Often general contractors or subcontractors may have alter egos which are also named in construction defect litigation. It is important to advise clients that alter ego non-signatories can compel the parties to arbitration so that clients are aware of all potential avenues to arbitration, if they desire to enforce an arbitration agreement. Similarly, creditors as third party beneficiaries are allowed to compel arbitration. 280 Construction Law Seminar September 2012

A person cannot be a creditor beneficiary unless the promisor s performance of the contract will discharge some form of legal duty owed to the beneficiary by the promisee. Epitech Inc. v. Kann, 204 Cal.App.4th 1365, (2012). In the construction context, the issue of creditor third party beneficiaries can arise when a homeowner seeks to enforce an arbitration provision between the subcontractor and the general contractor. Some courts have held that the subcontractor (the promisor) is assuming the general contractor s (promisee) duties for construction and the ultimate beneficiary of the performance is the homeowner. Gibert Financial v. Steelform Contracting 82 Cal.App.3d 65, 70 (1978). However, some states such as Alabama, have done away with the creditor/donee classification in favor of the incidental/intended beneficiary classification and held that the homeowner is merely an incidental beneficiary of the construction contract between the general contractor and the subcontractor. Since the subcontractor s work does not discharge the entire legal duty, the homeowner cannot enforce the contract between the general contractor and the subcontractor. In the construction-contract context, the owner of the building being constructed is typically regarded as merely an incidental beneficiary of the contract between the general contractor and its subcontractor, and, therefore, has no enforceable rights under a subcontract. Cincinnati Ins. Co. v. Barber Insulation, 946 So. 2d 441, 443 (2006). Remember, the intent of the contract to benefit a third party must be clear from the terms of the contract so if your client is the intended third party beneficiary, be sure to thoroughly review the contract to confirm that the intent is clear. Issues can arise if your client wants to compel arbitration and his/her status as an intended/incidental beneficiary is contested. IV. Employees or Associates Can Compel Arbitration Employees or associates of signatories to a contract are also often entitled to compel arbitration. In California, homeowners sued their broker for failing to disclose structural damages and claimed pain and suffering and emotional distress. The brokers moved to compel arbitration based on the standard form purchase agreement between the homeowners and the sellers. The homeowners opposed on the grounds that the arbitration provision included an exclusion for bodily injury. Consistent with the law in several other states, the Court ruled that emotional distress is not bodily injury and that the Plaintiffs claims for emotional distress specifically related to the items addressed in the standard purchase agreement such as disclosure and therefore the order denying arbitration was reversed. Gravillis v. Coldwell Banker, 143 Cal.App.4th 761 (2006); Eastern Airlines, Inc. v. Floyd, 499 U.S. 530 (1991). V. Assignees of Contracting Party Can Compel Arbitration An assignee of a contracting party can also enforce arbitration. In Pennsylvania, absent an express provision against assignment, the rights and duties under an executory bilateral contract which does not involve personal skill, trust or confidence may be assigned without the consent of the other party so long as it does not materially alter the other party s duties and responsibilities. Smith v Cumberland Group, 455 PA. Super. 276, 285 (1996) (owner and contractor entered into a construction contract which was later assigned to subsequent contractor. Court ruled that assignee could compel owner to arbitration absent limitation on assignability). The court ruled that when parties of equal bargaining positions execute an agreement that does not restrict assignability and allows for arbitration to resolve any future disputes, the parties must not be allowed to avoid the consequences of such an agreement. Id. at 287. The Lack of Appeal of Arbitration for Non-Signatories Cohen 281

This situation could arise in any construction contract where a subcontractor sells his business and assigns the contract to a subsequent owner, or where another subcontractor completes the work pursuant to the same contract. If your client is opposed to arbitration, educate them on the possibilities and potential ways that a case could wind up in arbitration, even if they did not contract directly with the compelling party. VI. Equitable Estoppel Allows Non-Signatories to Compel Arbitration Equitable estoppel is a common thread that runs through much of the case law involving non-signatories and arbitration. In many instances, a party seeks to enforce some terms of the contract and oppose enforcement of the arbitration provision. Based on the equitable principles of estoppel, Courts have held that a party cannot demand the benefit of the contract when convenient and refuse to adhere to a valid arbitration provision of that same contract. Federal courts have held that a party in a construction contract dispute can be forced to arbitrate a claim under the theory of equitable estoppel, even though there is no written agreement to arbitrate between that party and the defendant, when the basis of the party s claim is that the defendant breached the duties and responsibilities assigned to the defendant by a contract, which contains an arbitration clause, between the defendant and a third party, because the claim is intimately founded in and intertwined with the underlying [third party] contract obligations. Sunkist Soft Drinks, Inc. v. Sunkist Growers, Inc., 10 F.3d 753, 757 (11th Cir. 1993). In several states, Courts have ruled that based on the theory of equitable estoppel, a non-signatory can enforce a broad arbitration provision where the plaintiff s claims are intertwined with the contract. Equitable estoppel generally consists of voluntary conduct or representation, reliance and detriment, however Courts in California have held that detrimental reliance is not required when a non-signatory seeks to enforce an arbitration agreement because such a determination is subject to the federal law of arbitrability. Turtle Ridge Media Group v. Pacific Bell Directory 140 Cal.App. 4 th 828, 835 (2006); In Turtle Ridge, a delivery service partnered with a second delivery service and together they contracted with a phone book company to deliver phone books in various markets. Issues arose regarding the number of phone books to be delivered and one of the delivery services sued the phone book company. The phone book company filed a motion to compel arbitration on the grounds that the contract between the two delivery services contained a broad arbitration provision. The Court ruled that the delivery service was equitably estopped from refusing to arbitrate because its claims against the phone book company were intertwined with the contract between the two delivery services. The Court relied on California precedent which says the equitable estoppel doctrine applies when a party has signed an agreement to arbitrate but attempts to avoid arbitration by suing non-signatory defendants for claims that are based on the same facts and are inherently inseparable from arbitrable claims against signatory defendants... The doctrine thus prevents a party from playing fast and loose with its commitment to arbitrate, honoring it when advantageous and circumventing it to gain undue advantage. Id. at 833. In Alabama, where a contract between a contractor and a hospital board included an arbitration provision which specifically excluded applicability of the arbitration provision to claims involving an architect, the Court held that equitable estoppel did not apply since there was no written consent by the architect agreeing to arbitrate. Stallings & Sons v. Sherlock, 670 S.2d 861 (1995). VII. Non-Signatories Bound by Arbitration Provision In some instances, the signatories to the contract move to compel arbitration against a non-signatory. Non-signatories often argue that they do not have privity of contract and therefore the terms of the contract 282 Construction Law Seminar September 2012

should not be enforced against them. However, some courts have designated five general categories where a non-signatory can be compelled to arbitrate: 1) incorporation by reference; 2) assumption (implied conduct); 3) agency; 4) veil piercing/alter ego; and 5) estoppel Thomson-CSF, S.A. v. Am. Arbitration Ass n, 64 F.3d 773, 776 (2d Cir. 1995). Although not identified as one of the traditional five theories, a third-party beneficiary of a contract containing an arbitration provision can also be compelled to arbitrate. J. Douglas Uloth & J. Hamilton Rial, III, Equitable Estoppel as a Basis for Compelling Non-Signatories to Arbitrate - A Bridge Too Far?, 21 Rev. Litig 593, 601(2002). VIII. Incorporation by Reference An arbitration clause may apply to a party who is a non-signatory to one agreement containing an arbitration clause but who is a signatory to a second agreement that incorporates the terms of the first agreement. Michael Daly, Note, Come One, Come All: The New and Developing World of Non-signatory Arbitration and Class Arbitration, 62 U. Miami L. Rev 95, 99, (2007). In the construction field, a subcontract between a general contractor and subcontractor may incorporate by reference the terms of the original contract between the homeowner and the general contractor. If the original contract contains a broad arbitration agreement, Courts in several states may find that the non-signatory subcontractor is bound by the arbitration agreement in the original contract. IX. Assumption The issue of assumption or implied conduct arises when for example, a party voluntarily begins an arbitration. Even if that party may not have been legally required to participate in arbitration at the outset, once the party has, through its conduct, impliedly agreed to participate in arbitration, the party is generally bound by the arbitrator s ruling. Gvozdenovic v. United Air Lines, Inc., 933 F.2d 1100, 1105 (2d Cir. 1991). X. Agents In the construction context, subcontractors or general contractors are often sued individually, as agents of a corporation. In these instances, Courts generally have found that the agents are bound by the arbitration provision. Non-signatories to an arbitration agreement may be bound by or enforce an arbitration agreement executed by other parties under theories arising out of common law principles of contract and agency law. Under the theory of agency, an agent can assume the protection of the contract which the principal has signed. Courts have applied this principle to allow for non-signatory agents to avail themselves of the protection of their principal s arbitration agreement. Brown v. Centex Homes, 171 N.C. App. 741, 745 (2005) (North Carolina court holding that arbitration agreement between homeowner and Centex extended to Centex employee). XI. Alter Ego Similar to our discussion above where a non-signatory alter ego is compelling arbitration, an individual or entity can be a party to an arbitration agreement by virtue of its status as alter ego of a signer of the agreement. Nat l Dev. Co. v. Khashoggi, 781 F. Supp. 959, 963 (S.D.N.Y. 1992). This situation usually involves corporations and piercing the corporate veil. However, in the construction context, the issue of alter egos can arise when the signatory to the contract has various parent or subsidiary relationships, such as large developer entities. The Lack of Appeal of Arbitration for Non-Signatories Cohen 283

XII. Equitable Estoppel Generally, the theory of Equitable estoppel is applied when a signatory brings a claim against a nonsignatory based on the provisions of a contract. In that instance, Courts have held that signatories can be compelled to arbitration by a non-signatory because the signatory is attempting to enforce certain provisions of the contract and therefore the arbitration agreement in the contract is enforceable against the signatory. There are also some instances where a non-signatory is equitably estopped from refusing to participate in arbitration. A non-signatory may be compelled to arbitrate a claim based on equitable estoppel for a claim which he brings himself against a signatory, when the non-signatory is seeking rights under the contract. This situation is not as common as enforcing equitable estoppel against a signatory, however it can arise in the construction arena if a subcontractor makes a claim against a homeowner based on the contract between the homeowner and general contractor, and the homeowner compels the subcontractor to arbitration based on an arbitration provision in the contract. XIII. Third Party Beneficiaries Non-signatory third party beneficiaries can also be compelled to arbitration. As discussed above, one of the common non-signatory third party beneficiaries in construction is the homeowner/owner. Oftentimes, a homeowner will file suit against a general contractor and subcontractor. If the contract between the general contractor and the subcontractor contains an arbitration provision, in many states, the subcontractor can compel the homeowner to arbitration. In this situation, the homeowner is considered a creditor third party beneficiary because performance of the promise [by the subcontractor] will satisfy an actual or supposed or asserted duty of the promissee [general contractor] to the beneficiary... Weems v. Nanticoke Homes, Inc., 37 Md.App.544, 556 (1977). The reasoning used by the Courts is that the beneficiary should not be able to sue for breach of contract between the promissor and promissee and thus benefit from those agreements without equally being made to abide by the terms of the contracts compelling arbitration of disputes arising therefrom. District Moving and Storage Co., Inc. v. Gardiner, 63 Md. App. 96, 104 (1985) In District Moving and Storage Co., Inc., a joint venture entered into separate contracts with an architect and general contractor to build a storage facility. The joint venture had previously agreed to lease the completed building to District Moving and Storage. District Moving filed suit against the architect and general contractor for breach of contract. Both the architect and general contractor moved to compel District Moving to arbitration on the grounds that it was a third party beneficiary and the Court ruled that where a third party beneficiary attempts to sue a promisor, that promisor may apply the contract provisions against the third party beneficiary in the same manner available against the original promisee. Id. at 102-3. Some courts are more hesitant to allow a signatory to compel arbitration against a non-signatory than the reverse situation because arbitration under the Act is a matter of consent, not coercion. Volt Info Sciences Inc. v. Board of Trustees, 489 U.S. 468, 479 (1989). A signatory has agreed to arbitrate and therefore the only question is the scope of his/her agreement whereas a non-signatory has not signed an arbitration agreement and therefore there is no contract language to evaluate to determine scope. And never forget the lack of appeal of arbitration for non-signatories. Arbitration involving non-signatories can be complex depending on the role of the non-signatory and its proximity to the contract. In most states, Courts have continued to confirm that third party beneficiaries can compel and be compelled to arbitration if they are intended beneficiaries. In the construction industry, where contractors take on various names, business forms and maintain related companies, we should strive to advise our clients of the implications and potential consequences when it comes to participation in arbitration. 284 Construction Law Seminar September 2012

Advanced Techniques for Cross- Examination of the Technical Expert Toyja E. Kelley Lydia S. Hu Tydings & Rosenberg LLP 100 E. Pratt Street, 26 th Floor Baltimore, MD 21202 (410) 752-9747 tkelley@tydingslaw.com lhu@tydingslaw.com

Toyja E. Kelley is a commercial litigation partner in the law firm of Tydings & Rosenberg LLP. He concentrates his practice on construction, products liability, insurance coverage, and business tort litigation. Mr. Kelley is President-Elect of the Maryland Defense Counsel, Inc. He is also a member of DRI s National Board of Directors. Lydia S. Hu is an associate in the litigation department in the law firm of Tydings & Rosenberg LLP. She assists clients with their commercial litigation needs, including insurance defense, products liability, and business torts. Ms. Hu is the DRI Young Lawyers Liaison of the Maryland Defense Counsel, Inc. and is active with the DRI Young Lawyers Committee and Women in the Law Committee.

Advanced Techniques for Cross- Examination of the Technical Expert Table of Contents I. Introduction...289 II. Preparation and Organization...289 III. Realize Your Objectives...290 IV. Ask Leading Questions Mostly...290 V. Know the Rules of Evidence...291 VI. Know Who You Are and Be the Star...291 VII. Conclusion...291 Advanced Techniques for Cross-Examination of the Technical Expert Kelley and Hu 287

Advanced Techniques for Cross-Examination of the Technical Expert I. Introduction There should be little doubt about the importance of a successful cross-examination of the technical expert in a construction case. These experts are a triple threat: highly educated, rigorously trained, and well-healed at presenting testimony. No matter what issues are present in your case, the cross-examination of architects and engineers is a daunting challenge that can never be underestimated. Experienced litigators adhere to the Ten Commandments of Cross-Examination, from the Art of Cross-Examination by Irving Younger, ABA Monograph Series No. 1 (ABA Section on Litigation 1976), and its progeny in an effort to combat these challenges. This paper focuses on five principles and techniques of effective cross-examination that are most important when facing the technical expert in a construction case. II. Preparation and Organization Give me six hours to chop down a tree, and I will spend the first four hours sharpening the axe. Abraham Lincoln Despite the fact that lawyers are some of the most risk averse people in the world, it is surprising the number of lawyers that fail to observe what is arguably the most important technique at effectively crossexamining the technical expert. Proper preparation does not begin the night before your opponent is to call his or her design engineer to testify in a construction defect case. In most cases, effective preparation begins the moment that you receive the assignment and you start the process of understanding just what your opponent s case is all about. Use of the full assortment of discovery tools available, therefore, should be a key part of your preparation. As early on in this process as possible, you should endeavor to learn just who your opponent intends to call as an expert witnesses. In federal court and many state court jurisdictions, pre-discovery disclosures are mandatory by rule or standing order and certain information about the case must be exchanged shortly after the defendant files an answer. See, e.g., Fed. R. Civ. P. 26 (2012). Rule 26(a)(2)(A) expressly requires the identification of experts that are expected to testify at trial. The disclosure of these experts must also include a written report with the following information: a complete statement of all opinions the witness will express and the basis and reasons for them; the facts or data considered by the witness in forming them; any exhibits that will be used to summarize or support them; the witness s qualifications, including a list of all publications authored in the previous 10 years; a list of all other cases in which, during the previous 4 years, the witness testified as an expert at trial or by deposition; and a statement of the compensation to be paid for the study and testimony in the case. Id. If you are not litigating in federal court or in a jurisdiction which does not have similar initial disclosure requirements, it is imperative that standard discovery requests are formulated which allow you to gather as much information about the expert witnesses that your opponent plans to call and the factual information on which he or she will base his or her opinions as possible. Advanced Techniques for Cross-Examination of the Technical Expert Kelley and Hu 289

In addition to the customary assortment of information, documents, and facts that you would typically gather in any case, you should make an intensive effort to learn as much as you can about the expert s background. You should make use of expert witness databases, listserves, and your professional network to research information about your opponent s witness. More often than not, your opponent s expert has a long paper trial that will be fertile ground for use at trial during cross-examination. So long as you do not practice in a jurisdiction that forbids the practice, regular review of your opponent s expert witness s social media presence should also be a standard part of your preparations. Be careful, however, to avoid the many ethical pitfalls of this practice. See generally N.Y. State Bar Assoc. Ethics Op., Op. 843 (Sept. 10, 2010), available at http://www.nysba.org/am/template.cfm?section=home&template=/cm/contentdisplay.cfm&contentid=43208; N.Y. City Bar Assoc., Formal Op. 2010-2, available at http://www.nycbar.org/ethics/ethics-opinions-local/2010-opinions/786-obtaining-evidence-from-social-networking-websites; Philadelphia Bar Assoc. Prof l Guidance Comm., Op. 2009-02 (Mar. 2009). After extensive review of all of this information, your theme of the case and, consequently, your cross-examination objectives should be beginning to take shape. The deposition of the expert witness is an opportunity to test these themes and objectives outside of the presence of the judge or jury and to lay the ground work for effective impeachment at trial. Even the most experienced technical expert is no stranger to forgetting what he or she has said or, in the case of some experts, flatly contradicting their testimony in the current case. With the completion of discovery and armed with the expert s deposition testimony, you should be ready to do battle in the arena that is the courtroom. III. Realize Your Objectives If you don t know where you are going, you ll end up someplace else. Yogi Berra You should be acutely aware of what it is that you want to accomplish with the cross-examination of the technical expert at trial. Many scholars, like Irving Younger, suggest a very limited cross-examination, with no more than three points. However, the technical issues present in many construction cases will require much more time on cross-examination to develop the points necessary to respond to the impact of the direct examination. You should not be afraid to announce your objectives to the witness as your begin your crossexamination. This is particularly true when trying the case in front of the jury. IV. Ask Leading Questions Mostly Control your own destiny or someone else will. Jack Welch Since your first day of trial advocacy class in law school you have been told that you should ask only leading questions on cross-examination. Leading questions allows you and not the technical expert witness to control the dynamics of the courtroom. Cross-examination is not the time for the expert to reinforce the idea that he or she is the smartest person in the room. When in doubt, lead the witness. Like all things, however, there are exceptions to this old adage. Asking only leading questions can, at times, bore the judge or jury to tears. You may also risk losing one of the most important reasons for ask leading questions, impeachment of the witness. The fundamental reason for asking the leading question is that you know the answer the witness will give. By asking the right open question at the right time, however, the 290 Construction Law Seminar September 2012

witness may waffle or change his testimony. Because you have thoroughly prepared by taking the witness s deposition, and researching their background, you can destroy the witness s credibility by pointing out this inconsistency. V. Know the Rules of Evidence Know the rules well, so you can break them effectively. Dalai Lama XIV While the technical expert may be an expert of the technical issues in your case, you should be the expert of the rules of evidence. A thorough review of the rules of evidence and applicable case law should have been a part of your preparation for trial. You should make special note of those rules that are particularly important to your case. You should anticipate the documents in your case that pose authenticity and admissibility problems. Effective cross-examination should begin during your opponent s case in chief. If you are successful at keeping out a fundamental piece of evidence, you may have destroyed your opponent s expert before he even takes the stand. VI. Know Who You Are and Be the Star...be yourself not your idea of what you think somebody else s idea of yourself should be. Henry David Thoreau By the time that you are in the position of cross-examining the technical expert at trial, you have no doubt developed your own style. The best trial lawyers, however, have learned how to adapt that style to the situation while staying true to who they are at the core. Maintaining control over the technical expert may require you to adapt your style to the situation. VII. Conclusion While the suggestions discussed above should not be new to anyone that has ever cross-examined any witness at trial, they should be mastered in order to effectively cross-examine the technical expert. The technical experts pose particular challenges because of their experience, knowledge, and training. If these suggestions become second nature, you will be more confident with your cross-examination. The judge or jury will sense your unwavering confidence thereby increasing your chance of winning at trial. Advanced Techniques for Cross-Examination of the Technical Expert Kelley and Hu 291