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The Johnny Depp and Amber Heard Case Show the Importance of Special Verdicts or Answers to Written Questions in Jury Verdicts

by | Jun 2, 2022 | Accidents, Bad Faith, Defamation, General Verdicts and Written Questions or Interrogatories, Insurance Coverage, Johnny Depp, Special Verdicts |

The defamation cases brought by Johnny Depp and Amber Heard against each other, entertaining as they were to many Americans, involved complex issues of law as applied to the facts alleged by the parties. For the jury to reach the verdicts it reached, the Trial Judge in Virginia required a special verdict sheet containing 43 questions. Special verdict sheets are based on the Model Jury Instructions used in civil cases in Virginia, see, e.g., Va. Model Jury Instruction, No. 37 000. Without these answers, a court could not properly review the verdicts. As observed by the Virginia Supreme Court in another defamation case:

The jury was thus permitted to find the last three statements to be defamatory; and in the absence here of a special verdict, there is no way to determine whether the jury based any or all of its defamation verdict on one or more of these last three statements. We therefore agree with Handberg that it was reversible error for the trial court to have so instructed the jury. Handberg v. Goldberg, 297 Va. 660, 671, 831 S.E.2d 700, 708 (2019).

General Verdicts with Answers to Written Questions or Interrogatories

The instructions to juries are carefully worded by scholars, judges, and practitioners to make sure that the jury reaches a verdict based on applicable law as applied to the facts of the case. In most cases a standard jury instruction is sufficient. However, there are areas of the law and fact patterns where more than a general verdict is necessary to assist the finder of fact and the court. In these instances, the Judge may allow or require a “special verdict,” “interrogatories” or a general verdict with “written questions.”

The Federal Rules of Civil Procedure (FRCP) recognize that general verdict may not always be sufficient by allowing:

(b) General Verdict with Answers to Written Question (1) In General. The court may submit to the jury forms for a general verdict, together with written questions on one or more issues of fact that the jury must decide. FRCP 49(b)

In New York, the Civil Practice Laws and Rules (CPLR), state trial courts are given same opportunity to require more than a general verdict, by allowing:

(c) General verdict accompanied by answers to interrogatories. When the court requires the jury to return a general verdict, it may also require written answers to written interrogatories submitted to the jury upon one or more issues of fact. CPLR 4111(c).

There are many cases where a General Verdict may not be enough for the jury or a reviewing court to provide or understand the basis for the verdict. There are areas of the law, such as found in Virginia, where the law specifically provides for a Special Verdict to be Rendered on a Special Verdict Sheet. For example, in Va. Model Jury Instruction, No. 37 010, these questions are available to the trial judge:

Instruction No. 37.010 Liability Issues (Public Figure/Not Defamatory Per Se or Private Figure/Substantial Danger to Plaintiff’s Reputation Not Apparent)

[For use in cases involving a public figure plaintiff, where the court has determined the statement is NOT defamatory per se, AND in cases where the plaintiff is a private figure, and the court has determined that the statement did NOT make substantial danger to the plaintiff’s reputation apparent.]

Your verdict must be based on the facts as you find them and on the law contained in all of these instructions.

The issues in this case are:

(1) Did the defendant make the following statement: (words of statement)?

(2) Is the statement about the plaintiff?

(3) Was the statement [heard; seen] by someone other than the plaintiff?

(4) Is the statement false?

(5) Did the defendant make the statement knowing it to be false or did the defendant make it so recklessly as to amount to a willful disregard for the truth, that is, with a high degree of awareness that the statement was probably false?

(6) Did the statement tend to so harm the reputation of the plaintiff as to lower him in the estimation of the community, to deter others from associating or dealing with him, or make him appear odious, infamous, or ridiculous?

(7) Was the plaintiff damaged as a result of the statement? (8) If the plaintiff is entitled to recover, what is the amount of plaintiff’s damages? On these issues the plaintiff has the burden of proof.

Your decisions on these issues must be governed by the instructions that follow.

*          *          *          *          *          *          *          *          *          *          *            *

If you watched television when the verdict in the Depp/Heard trial was announced, the Jury apparently did not write its answers on the Special Verdict Sheet when they first came into the Courtroom. The Trial Judge send the Jury back to the Jury Room to fill out the sheet. When they returned the Judge then read the verdict in Open Court.

But in many cases, there is not statute or model jury instructions containing written questions. In those cases, a party who feels there is a need for a Special Verdict or answers to written questions or interrogatories, must request the Court to provide them to the jury.

Negligence and Insurance Coverage

A Special Verdict or answers to written questions or interrogatories, may be especially important in cases involving issues of insurance coverage in the case itself or case where a finding in an underlying action may be used to determine the insurance coverage issues in a related case.

One such case involved a large well known New York general contractor and a small subcontractor. The jury verdict is a good illustration of how written questions in an underlying action can be used to determine both the liability issues in that action and the insurance coverage questions in a related action.

In that case, the contractor was hired to do the demolition at a work site sometimes referred to as the “demo.” His contract with the general contractor also had a provision requiring him to cover up any holes or identify any dangerous conditions on the property following for the demo. Filling up the holes, etc. is called “doing the protection.” the contractor said that whenever he agreed to do the protection, he always got sued when someone got hurt. For that reason, when he signed the contract, he crossed out the provisions requiring him to do the protection. The contract was somehow lost, but his testimony was allowed at the trial of the personal injury claim involving the plaintiff who had fallen through a hole created during the demo. The contractor did not cover the hole in accordance with the industry standards which were to cover it with plywood, use a nail gun to fix the plywood through the surface, and put dayglow paint on the plywood which would identify it as dangerous condition.

The plaintiff walked along the site and saw piece of plywood. It was not nailed to the concrete, and he picked up the plywood and fell through the hole gravely injuring himself. He then sued the general contractor and the subcontractor.

At trial, the judge was asked by the plaintiff to give the standard jury instruction which was the defendant negligent and was his negligence the proximate cause of the plaintiff’s injuries. The contractor’s attorney asked the judge to add a special interrogatory, not normally given in negligence cases of this nature, asking whether the contractor agreed to provide protection following the demolition. The general contractor’s lawyer objected but the court allowed it. The jury was then asked those three questions, negligence, proximate cause and whether the contractor agreed to provide protection.

The jury found both general contractor and the subcontractor negligent but did not find the subcontractor negligence to be a proximate cause of the action based on their finding that he did not agree to do the protection. The jury believed the contractor’s assertion that he did not agree to do the protection and crossed it out of the contract. Thus, the jury concluded that the general contractor had the responsibility to do the protection or to hire someone to do it. Therefore, the general contractor’s negligence in failing to do so was the proximate cause of the accident

In Bovis Lend Lease LMB Inc. v. Garito Contracting, Inc., 65 A.D.3d 872, 873, 885 N.Y.S.2d 59, 61 (2009) (Bovis II), the Appellate Division explained the interplay of the jury verdict first in the negligence case and then for the coverage issues:

In this declaratory judgment action, Bovis moved for summary judgment, arguing that its contract with Garito entitled Bovis to coverage as an additional insured on the policy issued by Twin City to Garito. Garito cross-moved for dismissal of the complaint and Twin City cross-moved for summary judgment. The motion court granted Bovis’ motion and denied the cross motions. This Court affirmed, finding that “[a]lthough the contract was lost, Bovis properly established, through extrinsic evidence, that it required Garito to procure insurance coverage on its behalf” (Bovis Lend Lease LMB Inc. v. Garito Contr., Inc., 38 A.D.3d 260, 261, 832 N.Y.S.2d 502 [2007] ) (Bovis I ). Our decision finding that a contract existed requiring Garito to procure coverage for Bovis as an additional insured said nothing with regard to the additional terms of the contract, as those terms properly were an issue for the jury in the underlying action.

In the underlying action, the jury found that: (1) Bovis was negligent and that its negligence was a substantial factor in causing Armentano to fall through the hole, and (2) Garito also was negligent but that its negligence was not a substantial factor in causing Armentano to fall. The jury’s determination included a finding that Bovis did not prove that Garito agreed to provide temporary protection at the work site. (Emphasis added)

As Twin City argues, the jury’s finding that Garito’s negligence was not a substantial factor in causing Armentano to fall is as conclusive as the admission by Worth that Pacific’s activities [in another case] were not a proximate cause of the underlying accident. That finding, after all, established that Bovis’ liability did not arise out of Garito’s work for Bovis or out of acts or omissions of Bovis in connection with its general supervision of Garito’s work. To the contrary, the jury found that Bovis’ liability arose out of its own work.

As Bovis Lend Lease LMB Inc. v. Garito Contracting, Inc., illustrates, requesting a special verdict, finding that the subcontractor, Garito, did not agree to provide temporary protection at the work site determined two issues. First, in the personal injury case, the jury’s determination that Bovis did not prove that Garito agreed to provide temporary protection at the work site resulted in the jury finding that his negligence was not the proximate cause of the plaintiff’s injury. And second, in the coverage action, it showed that that the jury found that Bovis’ liability arose out of its own work.

Bad Faith in Insurance Cases

The insurance industry faces “bad faith failure to settle” claims. There is a variety of circumstances out of which these claims can arise but at their core is always an insured, an injured third-party, and an insurer who, for one reason or another, fails to accept a settlement demand. When that happens, the third-party claimant often argues that the insurer should be responsible for paying the full amount of any judgment the claimant obtains against the insured if it exceeds the policy limits.

This is what happened in Pinto v. Farmers Ins. Exch, 61 Cal.App.5th 676, 276 Cal.Rptr.3d 13,  as modified (Mar. 18, 2021), reh’g denied (Mar. 30, 2021), review denied (June 23, 2021), where, after a judgment was entered against Farmers based solely on a special verdict, Farmers argued that the judgment should be vacated because the jury did not find, and no evidence established, that it acted unreasonably in failing to settle plaintiff’s claim against the insured.

In this case, a third-party claimant (Alexandre Pinto) suffered injuries in an automobile accident while he was a passenger in a pickup truck that was negligently driven. Pinto demanded that Farmers, the insurer of the truck, settles the injury claims for the $50 000 policy limit. Farmers, however, initially requested an extension of the demand’s deadline because it was investigating who of the two insureds was driving the vehicle at the time of the accident.

Such efforts were ignored by Pinto’s attorney who quickly stated that Farmers had failed to “unconditionally accept Pinto’s offer to settle the case.” After the parties stipulated a $10 million judgment for which the defendants were jointly and severally liable, the defendants assigned their rights to Pinto who then sued Farmers for bad faith failure to settle.

In the bad faith trial, the jury made three findings at the conclusion of the bad faith trial: that (1) Pinto made a reasonable settlement demand; (2) Farmers “failed to accept a reasonable settlement demand”; and (3) a monetary judgment had been entered against one insured in Pinto’s earlier lawsuit. Farmers argued that, regardless of the reasonableness of the settlement demand, the jury did not make findings that Farmers acted unreasonable in any respect, and therefore Farmers was entitled to have judgment entered in its favor. The trial judge rejected such argument and entered a judgment in favor of Pinto.

On appeal, the California Court of Appeal observed: The enumerated elements of CACI No. 2334 present two issues: Whether the plaintiff was harmed and whether the insurer’s failure to settle caused the harm. No element addresses whether the insurer’s failure to settle was unreasonable. Pinto v. Farmers Ins. Exch., supra,  61 Cal. App. 5th 676, 690, 276 Cal. Rptr. 3d 13, 22–23.

The California Court of Appeal reversed and concluded that the failure to accept a reasonable settlement offer does not constitute bad faith per se. Rather, the Court of Appeal held that bad faith liability requires a finding that the insurer acted unreasonably in some respect – that is that the insurer not only caused the insured’s damages, but it also failed to act without proper cause, for example by placing its own interests above those of its insured.

Bad Faith in New York

New York’s Pattern Jury Instructions (“PJI”), by contrast, lend some guidance in clarifying the current standard of liability for insurer bad faith but fall short of being definitive. According to PJI 4:67, an insurer cannot be held liable for bad faith due to an “error of judgment” or a “failure to exercise reasonable care.”3 To be culpable, however, the insurer need not “have acted maliciously or dishonestly” but it is enough that it acted in “gross disregard of the insured’s interests.”

This instruction is based on Pavia v. State Farm Mut. Auto. Ins. Co., 82 N.Y.2d 445, 453–54, 626 N.E.2d 24, 27–28 (1993), where the New York’s highest court reasoned:

Faced squarely with the question for the first time, we reject defendant’s proposed requirement of a “sinister motive” on the part of the insurer [citation omitted] and hold instead that, in order to establish a prima facie case of bad faith, the plaintiff must establish that the insurer’s conduct constituted a “gross disregard” of the insured’s interests—that is, a deliberate or reckless failure to place on equal footing the interests of its insured with its own interests when considering a settlement offer [citation omitted] In other words, a bad-faith plaintiff must establish that the defendant insurer engaged in a pattern of behavior evincing a conscious or knowing indifference to the probability that an insured would be held personally accountable for a large judgment if a settlement offer within the policy limits were not accepted.

The instruction also lists factors to be considered by the jury in deciding whether bad faith occurred in the underlying case, including the probability in light of the evidence that the jury would find in favor of the insured and that a verdict would be in an amount exceeding the policy limit; whether the defendant had investigated the circumstances of the accident sufficiently to be able to evaluate the provability of a verdict against the insured; what recommendation concerning settlement had been made to defendant by the attorney retained; the financial risk involved for the insured if the settlement was not made as compared with the risk in relation to the limit of its policy which defendant ran if the settlement was not made.

New York distinguishes reasonable care and bad faith. Reasonable care is taken to distinguish between the duty concerning settlement and the duty to defend when both are involved in the same case, but not when charging failure to settle. The insured must establish that the insurer engaged a in pattern of behavior evincing a conscious or knowing indifference to the insured’s interests.

The PJI has a lengthy instruction by the Judge explaining that the standard for bad faith is “gross disregard of the interests of the insured.” In Pavia v. State Farm Mut. Auto. Ins. Co., 1990 WL 10587797, the Trial Judge gave this instruction: “There is only one issue really in this case and that issue is this. Did the defendant, State Farm, act in gross disregard of the interest of carmine Rosato and Joanne Rosato, their assured in that there was a reckless or deliberate decision to disregard the interests of their assured.”

The jury question favored by plaintiffs is simply whether the insurance company acted in “bad faith.” As the Deep/Head case shows, this kind of question is not sufficient to show the basis for the verdict. At a minimum, a New York jury in a bad faith case should be required to answer this written question: “Did the insurance company act in gross disregard of the insured’s interests?”