what i would try to do today is discuss with the courts from our starvations that occurred to me about some of the issues that i was preparing for the argument sort of further refinement of some of the points and  i'm going to try to touch on step in if i have if i have the time personally with respect to the total disability issue and specifically the usual or customary last we don't deny that ould you please have like everyone seated in the courtroom thank you or by using some kind of device that that he or she never used before or by working in pain you trace back these cases you see that the usual and customary way is used to preclude those kinds of arguments to take an example if a lawyer suddenly loses his or her side the cases w say that the lawyer does not have to hire a reader in order to qualify for total disability benefits because using a reader is not the usual and customary way well in this case there was no dispute it's not applicable in this case and why is that it's not applicable because there is no dispute that there is one duty that she can perform so what the plaintiff successfully did in this case w i this term of art and used for a totally different purpose in the what if that's her job if her job is being invasive cardiologists and that which that's what she does and she can no longer do that particular job why is that inappropriate to say that she can't do it in the usual and customary waiting because the pa it is not about what is her job it is about what are her duties and she listed four or five occupation it doesn't use usual customary at all by the way that's not in there all i'm saying is that in some judicial opinions courts occasionally use that term but our point here is you don't willy nilly import language into jury instructions when it doesn't serve a purpose and when it can only confirm use and in this case i thought it was just kind of revealing whether or not the court erred in using that phrase in the jury instructions is the question isn't well it's an of discretion but it was legal error because it was understood by all at the plainest representation that what the term meant was if she could not do one of her duties she was no longer performing her job in the usual and customary hospital rounds the only thing she couldn't do was catheterized her patients now a lot of patients that come to a cardiologist never need catheterization i think it's important to understand that she doesn't have a shingle out front of her office that says i'm invasive cardiologist and this is all i do she's a cardiologist she takes in all these patients whatever their needs are sometimes they need invasive procedure sometimes they don't she by her own estimates that she spends about see which ones can she perform and which ones can't you perform so as it's your argument that she just grabbed invasive cardiologist and that term was never adopted by the insurance company is that your argument if you like human is that the term is not what determines whether or not she's entitle to open a question to you was that description of her job ever adopted by the insurance company i don't recall i don't think it was but i'll confirm that with my colleagues i don't think they ever embraced the disabled if she needs the twenty percent weight loss but she felt that she had to keep working because it was an all or nothing affair in her mind and therefore she never suffered the way it was there was no stonewalling they kept asking her for documents a document there was something about later she felt she had sent stuff that we had said we didn't receive and that was towards the end of the process the bottom line however was that the documents never estab to move to north carolina for a year she would not have been able to continue maintaining her practice then she puts off the acceptance of that for a year filed her disability claim and then suffers no wages l until after she sells her her practice without telling them that she was going to do so and then takes off for you so the fact that they chose to surveil her while they were at duke i think it's a perfectly rational thing given that with which they were confronted but to present advocacy in the guard with expertise and nothing really shows it more clearly than the fact that nine times during his testimony after the judge essentially abdicated responsibility for  eting the policy to him nine times he injects the usual or customary language when her printing the insurance policy and then he uses that to reach the cut the combination is to say well she must be totally disabled because she can't do this one important duty it's precisely for that reason your honour's that you must draw the line in this case and say put an end to the hiring of these hired gun objections to the instruction were made during the trial but not on the basis that is usual and customary was improperly imported into that instruction that that particular argument was not made the trial  argument was that it had no valid role to play in this case i don't know that they traced it back the way i have and so i that it performs this other function which was a relevant they simply said look stick with the policy this thing is being misused here they were one of the things that happened was that the plaintiff's lawyer the judge originally agreed with us not to do it and then the plaintiffs persuaded him that after julie ran a hand testified and said well there's this list of duties and if she can't do them all she's and there is that is that's definitely what there is a specific objection to that instruction on that basis i can't swear to you exactly what words were used but i'd submit that they were certainly strongly put the judge i noticed about why we felt it was not appropriate to instruct the jury on these words which had no role to play in the cases that is the record where is that objection in the record where you said the judge was put on notice that usual and customary should not be the adjuster's instructions this is to the field representatives laid out the theory of the case that paul revere had already formulated as their justification for wrongly denying c the whole theory of needing them was that providence was involved in handling this claim which was never true but there concession on page thirteen of their brief that the theory for denying the claim existed sixteen months before the merger i think proves the point and it distinguishes by the way the handguard a case in which the claim was not even filed until after the merger and i think that's one of the basis on which the court held th documents were admissible there but this is very different well lately you're honest i think if you read the key cases game cliff and sports you have to come to the conclusion that prominent life was never a here is there are literally a dozen cases that have interpreted this policy the way paul revere did if that's the case how can it possibly be bad faith to do so so we should get jamel on that point on  based on conduct nearly identical to that alleged defendants here are precisely the opposite is the case the arizona case has taken extraordinarily stringent approach so allowing punitive damages if you compare the conduct here t conduct and linthicum court ruling of the last year i think you would have to conclude that the arizona courts would have granted us you know the on this point finally on the amount of punitive damages which has been briefed in great detail the only spinal point i want to make is that the pains versus arcos decision is a very very significant development in this circuit this court held there that a five million dollars punitive award for ethnicity cap it merely looked at that as one of the guidepost factors in our case the guidepost is five thousand dollars fine for violating the arizona unfair claims handling practices act so the that affirmatively favorable to us but the point i wanted to make was the court there said there can be no excuse for intentional repeated ethnic harassment and indeed there cannot be and we submit that if the so that the seven million dollars punitive award in this case and gains cannot co exist equation in terms of calculating punitive damages as opposed to the individual practice well i think it's clear from state farm your honor that individual jury is not entitle to act as if it was conducting a market conduct exam or overseeing a class action the job of that year is to punish the defendant for what it did to the plaintiffs and nothing more furthermore in this case while they have these documents that they were able to spin and say indicated bad jury was properly punishing for a nationwide course of tonga but with there that the inappropriate consideration for the jury the jury can't punish for it ten and consider it an aging reprehensibly if there is actually evidence of it yes but that might justify a ratio of two to one instead of one to one it doesn't justify this bloated seventy nine million dollar water or even the seven million dollars award that was imposed here it's five million is way too much for what was favor in this case because in this case as you know there's five point four seven million dollars of emotional distress damages which we strongly submit needs to be vacated in its entirely but in so far as you believe any of it standing should have adequate deterrent function and you don't need much more at all to adequately deter and punish what happened in this case with the court's permission i'd like to reserve some type federal bench in two thousand and two spent seven years in the arizona trial courts and ten years on the arizona supreme court where he wrote our or participated in many of the decisions we've cited to this court arizona supreme court decisions judge mark tone after presiding over this trial and in considering the post trial motions didn't say a reasonable jury would find in our favor he didn't say we presented a strong case what he said is that the evidence and the defendant's witnesses left the jury no choice but to fine as it did that being the case i am not inclined to spend a lot of time arguing the facts to this panel what i would like to do is address three legal issues one the usual and customary jury instruction that mr tabor was just addressing to the amount and how the emotional distress award was arrived at and three the punitive damage amount the most are the usual and customary argument can be addressed relatively quickly the court was right when the defense objected to the usual and customary argument the defense or the usual and customary instruction let me go back they did not object to the basic total disability instruction which was actually defense instruction number thirty four what they objected to was our stuff well meant to that it had the usual and customary language in it the judge initially refused to give that instruction the defense argued basically the it adds confusion they never argued as they argue in this appeal that this amounted to a directed verdict they never argued as they argue in this appeal that this is an inaccurate statement of the law i think the reason they couldn't and didn't argue that it was an accurate statement of the law is that there are two arizona appellate courts directly on point nice try and read thousand both of which specifically adopt the usual and customary standard and go even further they acknowledge that if a person with a known occupation policy can't do a duty what we sometimes call an occupationally defining duty firefighters can't fight fires but can sit in the station and work on equipment and so on you can't do your occupationally defining duty you're totally disabled but also what is your response to opposing counsel argument that in the face of high allergy is not an occupation that this that the invasive portion of percent of the time she's actually performing the procedures he's in back about average for invasive cardiologists the obvious analogy is trial lawyer i like to think of myself as a trial lawyer i'm probably in trial two percent of my time maybe three percent on the other hand no one would come to me if i couldn't appear in court i could still talk on the phone i could still stood in front of my computer what i do ninety eight percent of the time but if i can't go into court i'm no longer a trial lawyer and i'm insured against her disability in her regular occupation absolute one ever that was stressed fassel be right and it's at the time that she becomes disabled so it's just out of intellectual curiosity if she's switched from becoming insinuation that there was something a little fishy about the timing of the disability application well that the strongest response is what judge mark o is she considered and this got all i mean the quickest response is that's what the jury decided they were alleging essentially fraud at trial and the jury clearly rejected that argument that the short answer to your question is she was planning she always wanted to expand her invasive cardiology practice into geriatric she originally applied realized she was too ill to go stopped the pursuit of that another year passed and then she got even were and then she's dropping so it's a complicated fact pattern that was argued at length but basically there was an innocent explanation know it's true and and they the company cannot be held responsible for that year so it took two years before they denied her claim not three absolutely and the reason is that she testified i did not want to accept that i was just able i did not want to make this claim if anything i think that again cuts against any argument of fraud the instruction was correct under nice room and argument two issues did the jury disregard the judge's instructions and award dr siemionow past and future policy benefits and no emotional mental distress and secondly the jury in this case was specifically told by the judge not to put contract damages into the bad faith verdict and that's at trial transcript nine hundred thirty two and again at nine thirty two and one nine hundred forty eight instructions to the jury saying don't put the contract damages if you aborted them under the contract don't put the policy benefits here interestingly the award is completely consistent with to what the judge instructed and what plaintiff's counsel argued no reason to look for miscalculation or misapplication by the jury especially what the defendants ask you to do is speculate that the jury disregarded the judge's instructions and implies some sort of rube goldberg mathematical formula to arrive at this particular verdict there's no evidence to support that that's what they did and it their argument also presumes th award nothing for mental and emotional distress as to the next question whether the jury awarded award is unreasonable outrageous and beyond all measure we have t concede is a high award there's no question about that and basically that leaves two possibilities either the jury did something wrong or the evidence was very strong judge mark tone concluded the evidence was very strong and there was evidence from which the jury could find that dr siemionow basically as she put it was her practice she was the first woman cardiologist invasive cardiologist in the state of arizona the evidence shows that she wasn't exactly welcomed by her colleagues with open arms she had to fight every inch of her career to build this practice against quite a few odds the evidence also would support a jury finding that she could not hire the help she needed when she first became ill because the benefits were not paid that as a result she was working more hours than she should have been pushing yourself harder than she should have been that this impacted her physical health impacted her professional reputation that she went without treatment she needed which made her health worse the jury could find finally that she lost her practice because of the failure to pay the benefits there's an interesting similarit to take over her practice for several years in an effort to keep working that's what dr siemionow wanted to do and she testified quite clearly that had she had the money from the benefits she would have been able to hire someone to come in and sa general american essential he sold her the policy saying if you become disabled we'll protect you against all this you'll have the funds to the flexibility to hire people if you need or you'll have the money to take the time to get the treatment you need they said we will give you five million dollars in benefits is essentially what they said to protect you from just these sort of losses the question is was it unreasonable outrageous and beyond all measure for the jury to equate t can i think the quickest way to respond so that your honor is to look at the supplemental excerpt of the record one it's filed by a supplemental excerpt one page three thirty seven and this is a fascinating l there's lots of other evidence circumstantial and direct but it's all in this one letter it's a letter from general american to provident life so the people whose sole her the policy two prominen life regarding paul revere plane's handling of general american planes and if you look at that letter what you'll see is there's reference to worcester i'm writing to talk to high level executives one from general american and one from providence wi this letter is about how are we going to handle our how are you handling the paul revere claims that are actually the general american claims handled by paul revere in providence life an accident is is who's basically on these general american planes adjusted by paul revere and general american saying no we wrote the policy we get the final call and they're looking at their agreement with each other and parsing it and saying you know who gets the right and really how that issue is resolved is irrelevant to the point i want to make which is paul revere is act our part provident like an accident is clearly acting for paul revere and it's negotiations with general american about closing planes and who's basically taking people that they've already found were disabled and terminating their claims or taking new claims that come in and denying them to meet artificial targets and goals to really make the bottom line targets that they had that the impropriety of that is evident in the in the record and also in cases going back fifty years in four years paul revere in providence as a rich direct result of these bad faith claims practices reduced claim payments over a billion dollars in just four years a billion dollars that with as of nine hundred ninety nine there's no indication they've stopped the question is what is the appropriate punishment for a corporation that sought to cheat the disabled person out of five million in benefits and cost five million in emotional distress in the process but the question is also what is the appropriate punishment for a corporation that did this as part of a scheme to cheat tens of thousands of people disabled people out of benefits they were due to the tune of billions of dollars judge mark tones that had the conduct justified the maximum punitive award allowed by the constitution how could that not be right how could that not be right and the point i would like to make in the couple minutes i have left is an argument that we put in the brief but i think deserves more emphasis the focus of punit damages and the constitutional limits on community of damages focus on the individual defendants we were concerned the defendants originally proposed a verdict form that did not require separate awards of punitive damages the jury is just going to do a gross award for all three i suggested below that there should be a blank next to each defendant's name because in theory they could find general american more or less culpable than paul revere and so on the defendants made clear they wanted this form and that's that trial transcript seventeen o three and seventeen o four so we have a gross award of seventy nine million but each defendant is not paying that award and when you do the ratio analysis what you have to remember is essentially each defendant is responsible for approximately twenty six million which gets us to a ratio of about two point five to one that's well within the defendant's concession their prior argument that this was a one claims organization i don't think so your honor because it is it's the equivalent of if three people decide to hold up a bank it's one enterprise i one conspiracy if you will they're seeking seventy nine million dollars one drives the car one holds the gone and one does something else that they're all responsible for the conduct here they pooled their resources and they didn't buy a car they bought a claims organization here they pooled their resources and solicited claims from other companies like general american but they're working together to to accomplish an objective what is the objective on a micro level the objective is to take five million dollars from joanne steimle on a macro level is to take billions of dollars from lots of disabled people that scheme all three of them engaged in and when you talk about punishing them for that scheme their culpability may be it again it's the same as the bank robbery example you would not have three bank robbers then splitting a presumptive sentence because there were three of them doing the robbery and if you're going to talk about how do you punish them they each are culpable and need to be punished for their conduct they each are guilty if you will of intending to steal five million dollars and the question is what's the appropriate punishment commented several perhaps for that very reason for the reason that you're arguing that it should be split that's why they didn't want to separate verdicts for each one that's that's right that mean that may be so but if you look at the purposes behind the ratio which is i guess my point if honor i'd like to come back to you on preservation point on the jury instruction and read from pages nine seventy eight and nine seventy nine of the excerpts of record mr griffin who was our guy  if you say that i'm a trial lawyer you have to go and see am i really a trial attorney and how much of that constitutes my practice and that's really the question that the jury has to answer in the first place and what our concern is is they want to use this instruction to tell the jury that if you find that she does any invasive procedures no matter what small percentage of our practice it is by this instruction you have to find that she's totally disabled because she can't do invasive procedures that's precisely the argument then he comes back on the next page and says it's the equivalent of it's the negative right not necessarily you know but i understand your argument well if you will read nine seventy nine at your leisure i think you'll see that's exactly the point he was making  mr friedman uses the analogy of his of himself no one would hire him if he couldn't go to court but that's not the way dr cmos practice worked and her experience in the ensuing year proved it she had more work than she had before people which still coming through her so she was not like mr friedman if mr freeman was unable to speak or you know had stage fright or something and couldn't try a case because everything he does revolves around his ability to be in says if you can't perform the duties of your regular at the patient but it doesn't say you get to say what your regular occupation is and it doesn't matter what all your duties are the whole point is that her occupation is what is defined by her duties and so the insured fills this format and says what her duties are and if she can't do some of them the question is you know is it is she is she partial or total depending on what the percentage years what's your response to opposing counsel representation that there is a residency program for invasive cardiology and that's kind of the knowledge that this is a job it's true it requires extra training but again the question is once you've got that credential it only forms a small part of what you do and if your other duties are not any extra completely intertwined with it so that they will fall by the wayside if you can't do that duty then you're not totally disabled so there's nothing inconsistent about there being a certification program and it taking a lot of work on the provenance point this is i think very very have any involvement in this in this handling of the general american book of claims paul were the first had it then private in companies between paul revere's parent so naturally prominent companies would have some interest in involvement separate subsidiary had any reason to be involved in this claim or did anything in this claim i'm the emotional distress point mr friedman is asking you to uphold an award that would be roughly ten times the current record holder for any bad faith emotional distress or anywhere in the country the only testimony in this case was she was frustrated if you do that the sky will be the limit there will never be another case in which an awar in the millions of dollars to be challenges excessive it is just opening the pandora's box there if you look at the cases we cited the awards for this kind of thing are down in the fifty or one hundred thousand dollars range they're not in the multi million dollar range finally just one point on the punitive damages their entire case their entire institutional case is built on the faults of quezon of terminations with unfair whose benefits period expires all of those things constitute terminations there's not a week of evidence in this case of even one wrongful denial so the equation