Type: Insurance law, bad faith, misrepresentation.

Verdict: Defense verdict.

Case/Number: Mian and Kurshid Arshad v. Colonial Penn / 7134399.

Court/Date: Alameda Superior / April 3, 1997

Judge: Hon. Richard A Hodge, Dept. 80.

Attorneys: Plaintiffs - Robert F. Knox (San Francisco). Defendant - Terry A. Roland, Sean D. Beatty (Demler, Armstrong & Rowland, Long Beach).

Technical experts: Plaintiffs - Keith Charleston, insurance claims handling/bad faith, Fremont; Darrin Tinsley, realtor, Oakland; Edward Van, contractor,

Oakland; Mohammed Aslam, structural engineer, Oakland; Shamin Zadi, carpet expoert, Oakland; Alan White, public adjuster, Oakland; Zuhyer Alding, contractor, San Francisco. Defendant - Boyd Veenstra, insurance claims handling, L.A.; Mark Kelley, cost estimator, Alameda.

Medical experts: Plaintiffs - Abdul Naquvi, M.D., internal medicine, Antioch.

Facts: In October 1991, the Berkeley hillside home owned by plaintiffs Mian and Kurshid Arshad was destroyed in the Oakland firestorm. The plaintiffs reported the claim immediately to their homeowner’s insurance carrier, defendant Colonial Penn, and received a $14,000 advance for living expenses. The plaintiffs

then provided a contents inventory and were paid $127,500 (policy limits) for that coverage without providing any receipts or records, all of which, they explained, had been lost in the fire. Coverage for the dwelling had a guaranteed replacement cost endorsement. Over the course of the next six months, Colonial Penn’s handling adjusters and supervisors recommended payment of the $170,000 dwelling and $42,500 loss-of-use policy limits pending a rebuilding estimate for additional payment under the guaranteed replacement coverage. The defendant’s home office would not authorize these payments and instructed the adjusters to keep looking for plans for the house with the city building department, even after the city issued a letter advising that no plans existed. During the

investigation into building records, Colonial Penn discovered that the plaintiffs owned a second home, which they had reported to the defendant as their “temporary” residence. The plaintiffs explained that the second home had been leased to a relative and insisted that the lost hillside home was their principle residence. The plaintiffs produced neighbors’ affidavits, utility bills, mortgagee statements and bank records indicating that their primary residence was the destroyed house. After interviewing neighbors at the “second” home and discovering that some utilities there were also in the plaintiffs’ names, the defendant company denied the $1,098,000 dwelling claim based on an alleged material misrepresentation of

Name: Terry Rowland

Firm: Demler, Armstrong & Rowland, Long Beach.

Background: Rowland was born in Santa Monica and raised in Long Beach. He received his bachelor’s degree from the University of California at Berkeley in 1973 and his law degree from the University of California at Los Angeles in 1976. He and his wife, Linda, have three children: Jill, 18, Erin, 16 and Jamie, 14.

Did you grow up wanting to be an attorney?
“Well, you know when they ask you when you are young, ‘What are you going to be when you grow up?’ I can’t quite remember why, but I decided to answer that question, ‘I’m going to be a lawyer.’ Once you say that, it just becomes easier to say the next time. It becomes the game plan.”

After law school, did you go directly into a firm?
“I spent a year with the public defender’s office doing misdemeanor trials. Then I went into a general litigation firm for several years, and then I joined what this firm used to be.”

the insureds‘ principle place of residence, under which they had been paid $25,200 in loss-of-use coverage. The plaintiff insureds brought this action against the defendant insurer based on breach of contract and breach of the covenant of good faith and fair dealing theories of recovery.

Contentions: The plaintiffs contended that the meaning of “principle place of residence” was not defined in the policy and was never explained by any adjuster; and that since the insured home was worth

four times the second home, they considered it their principle residence, even though substantial time may have been spent at the second home. The plaintiffs also contended, through their expert, Keith Charleston, that any representations about their home were innocent and meaningless, as they were entitled to even more than they actually received under an alternative living expense claim. The plaintiffs further contended that they were entitled to additional contents coverage; and that the contents limit “floated” with the guaranteed replacement cost of the dwelling. The defendant contended that the plaintiffs willfully attempted to mislead the company in order to obtain

loss-of-use benefits to which they were not entitled.

Damages: The plaintiffs claimed contract damages of $1,704,000 consisting of $1,098,000 for the dwelling, $185,000 for additional contents and $432,000 for six years of loss-of-use of the hillside home at $6,000 per month. The plaintiffs also sought emotional distress damages, attorney‘s fees of over $185,000 and punitive damages.

Jury trial: Length 3 weeks (13 days); Poll 9-3; Deliberation 1 1/2 days.

Settlement discussions: The plaintiffs made a C.C.P. §998 settlement demand for $1.5 million and demanded $8 million at

the start of trial. The defendant made a settlement offer of $400,000 new money, in addition to the $161,800 paid previously in benefits.

Settlement conference: A settlement conference was held in June 1996 before Justice Edward A. Panelli, retired. It did not resolve the matter.

Other information: The verdict was reached approximately four years and two months after the case was filed. The jury found that the plaintiffs had intentionally misrepresented material facts thus voiding the policy

Had you always intended to do litigation?
“Yes, that is the most fun of being a lawyer—unless you are studious.”

What characteristics make a good litigator?
“Oh, I think common sense. That’s the most important thing.”

You primarily represent insurance companies. They can be tough to defend in front of a jury.
“That is one of the challenges—making your institutional client become more human.”

How do you do that?
“I talk about people, not institutions. I use names. I act like I like my client, which I do, and the jury picks up on it. …I try to shift the attack, always, over against the plaintiff, whether it is a bad faith or a personal injury case.”

Based on you experience with tort law, how do you see the future of tort reform?
“Oh, I think it is a very hard system to change, and that’s probably a real good idea—that it not change a lot. I think there should be more considerations for jurors—their pay and better

scheduling is the most important thing. People like being on juries, but they don’t like waiting around the courthouse being inconvenienced. But once they get in the game, I think they enjoy it, if there are lawyers there entertaining them.”

What is something that you should never do at trial?
“I think you should never underestimate a jury or talk down to anybody. You should never do anything except communicate to a jury that you believe in your case, and you are going to prove it. Also, always have your shoes shined. You have to look like you are a professional.”

Nothing too flashy?
“Never. Not on the defense side anyway. I always like the plaintiff’s side to be as flashy as they think they ought to be, because I think people don’t like it.”

One of the ‘rules’ of litigation is that you should never ask a question that you don’t know the answer to. Wouldn’t you say most attorneys do it anyway?
“Yeah, but I don’t think rules like that are very valuable. Usually you know what the answer is going to be or where it is going. So, if you are on a roll, you can go into some areas that you are not 100 percent aware of. You just have to have good instincts for what’s happening. The jury

wants to hear an interesting story. They want you to prove the interesting things you said you were going to prove, and they cut you a lot of slack. So with an occasional mistaken answer or an answer that hurts you, you just make a joke out if it.”

Would you say that it is the competitive aspects of litigation that appeal to you?
“Yes, very much so. It’s controlled war. The judge is there to be a referee and not get involved on either side. I really have no interest in befriending the lawyers I’m battling with. I suppose I would want them to have some degree of respect [for me], but I really don’t care what they think of me.”

So, you and the opposing attorney don’t get together after a day in court for a few drinks?
“Inconceivable.”

Do you think having that type of relationship would undermine how you approach a case?
“I think it would undermine your ability to, the next day, not do this fellow a favor. You’ve been so friendly with him and then you’re asked to help with an exhibit that he forgot to bring or something. If you start helping the other side, you might as well call your client up and say you are not interested in being their lawyer anymore, you would rather be friends with the plaintiff’s lawyer. It is just easier to keep a

hard edge.”

You stated that you used to have a life. Was this prior to becoming an attorney?
“Well, when I am in trial, and I think most lawyers will tell you this, it is all consuming. Then, having a substantial responsibility within the firm, for supervision and management stuff, there is just never enough time.”

Do you enjoy the practice of law?
“Some days it‘s great, and some days I wish I was back driving my beer truck, delivering beer.”

What other litigation professionals say about this attorney:
Attorney David H. Canter of Harrington, Foxx, Dubrow & Canter in Los Angeles says: “Terry Rowland is a stand-up guy, a man of his work, a man you can trust and a great trial lawyer.” Attorney Monte Cole of Madden, Jones, Cole & Johnson in Long Beach was opposing counsel on a case against Rowland and calls him a “fantastic defense lawyer.” Cole adds: “He has a very easy way about presenting a case—to make the jurors feel comfortable. I was envious of his ability to relate to the jurors in my case, because he got to them and I didn‘t. I have a great deal of respect for Terry. I think he is one of the best defense lawyers I‘ve tried a case with, and I hope I don‘t have to do it again.”