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Vol. 3, Iss. 4
March 5, 2014

Declarations:
The Coverage Opinions Interview With Gary Zipkin – The Coolest Coverage Lawyer In America

 

 

So many reading this have been experiencing a brutal winter – bone chilling cold and snow storms that just keep coming one after another after another.  But before you start complaining about the weather, just realize that it could be so much worse.  You are probably not living in Alaska.  But Gary Zipkin, coverage lawyer and shareholder at Guess & Rudd, PC, does.  With much of the nation in a deep freeze this winter, it made sense to sit down with the coverage lawyer who knows cold better than anyone.
 
I set out to learn what makes practicing coverage law in Alaska different from the rest of the country.  I suspected that there are cases involving moose.  I was right about that.  But it turns out that that’s just the tip of the iceberg.  And who better to explain all of this than Alaska’s Insurance Lawyer of the Year for 2013 according to Best Lawyers.  
 
Gary Zipkin has been practicing coverage law in Anchorage, on the carrier-side, for 40 years.  Of course, one doesn’t speak to a coverage lawyer in Alaska without asking the most obvious question.  And the answer is – No.  He can’t see Russia from his office window.  But he can see bald eagles, as well as Mt. McKinley, which is pretty cool – especially when you consider that it’s 175 miles away.  Just imagine if he were that close to Russia.  Such choice of law problems to deal with.
 
Gary didn’t start out in Alaska.  He attended law school in San Francisco and graduated in 1974.  He was convinced during a job interview to come to Alaska to check it out.  He made the move and has never left.  In fact, he’s still with the same firm that hired him four decades ago.
 
In an animated phone call that lasted well over an hour, Gary Zipkin told me several things, besides the moose, that make practicing insurance coverage law in Alaska different.
 
First, what makes practicing law in Alaska unique is, well, Alaska.  Gary explained that there are so many things about the state that make it challenging – the weather, its size, topography and inaccessibility of certain communities.  Sometimes it is just not so simple to reach a witness or get to a courthouse.  Ask yourself, have you ever been stopped from reaching a courthouse because of a vast herd of caribou crossing the road?  Have you ever attended a deposition in a place that can only be reached by an air taxi that lands on a dirt road?  Insurers located out of state may not always appreciate the challenges that accompany many things that they otherwise take for granted.  And while the state is huge, the bench and bar is the exact opposite.  You will unquestionably come across the same people in practice again and again.      
 
Another aspect of Alaska that is unique, or not appreciated by many, is that the state, at least certain parts, offers a high risk of a “shocking” plaintiff’s award.  I was surprised to hear this.  Gary said that, while Mississippi and Alabama are usually discussed as states with a real risk of a runaway jury award, Alaska is just as deserving to be on that list. 
 
This exists mainly in the rural parts of the state.  I asked why and Gary gave a few reasons.  First, there is a desire to “protect your own” against out of state corporations.  But more so Gary believes that it is because people in the rural parts of Alaska often live a “subsistence lifestyle.”  Gary meant no disrespect by this.  He was simply explaining that such people do not operate in a “cash economy.”  They exist by hunting and fishing and may not appreciate the amount of money that they are awarding in a case.  Because of this it can be difficult to explain to an unfamiliar insurer that a case that it values at $2,000 could easily result in a $20,000 verdict.                             
 
As for some fundamentals of insurance coverage in Alaska, the state has a statute that is modeled after California’s Cumis statute with respect to an insured’s entitlement to independent counsel.  That I knew.  I asked Gary if Alaska follows California law when Alaska law is silent.  He indicated that Alaska is not dogmatic in following California.  That I didn’t know.  I thought it might be.  But no, Gary said, Alaska likes to strike out on its own.      
 
In general, Alaska can be a challenging state for insurers on numerous fronts.  Gary provided several examples and pointed to Great Divide Ins. Co. v. Carpenter, 79 P.3d 599 (Alaska 2003) as the place to start if you want to get an appreciation for such challenges.  He’s right.  Consider what happened there.  The court held that a classification limitation exclusion, in a CGL policy issued to a floor covering business (limiting coverage to the insured’s floor-covering installation), did not bar coverage for bodily injuries sustained by a claimant, who was struck by a falling tree that was cut by a sometime employee of the insured, for purpose of obtaining firewood to heat the house that was owned by one of insured’s owners (the business was operated out of the insured’s home and heated with wood stoves).  The court concluded that the tree-felling activity was an incidental support activity to the insured’s floor-covering business, so the classification limitation exclusion did not bar coverage.  [It is a breathtaking decision.]  Gary also explained that the consequences for an insurer’s breach of the duty to defend can be severe and the state offers a variety of harsh and novel penalties for bad faith.  
 
In the end, Gary cautioned that, on account of Alaska’s uniqueness, it is not a place for insurers to traverse without the benefit of someone with local knowledge.  While that sounds like a marketing line, Gary wasn’t saying it in that context.  He was simply stating fact.                       
 
Lastly, Alaska is a “Loser Pays” state.  In other words, a prevailing party may recover a portion of its attorney’s fees as costs.  That is typically not the case in this country -- unless there is a statute or contract that permits the recovery of attorney’s fees.  But Alaska Rule of Civil Procedure 82 allows a prevailing party to recover a portion of its attorney’s fees without the need for statutory or contractual authorization.  Gary minced no words about Rule 82 – it is a “disaster.” 
 
Rule 82, he explained, creates constant battles over whether a party qualifies as a prevailing party.  While that sounds simple enough, it is far from it.  Gary characterized Rule 82 as the most litigated issued in all of Alaska civil law. 
 
While the rule may sound like a good idea – deter frivolous litigation – it does not work that way in practice, Gary explained.  Even if a defendant wins, and is entitled to recover its attorney’s fees, the plaintiff may not have the funds to pay.  Or the plaintiff will file an appeal and then offer to drop the appeal in exchange for the defendant dropping its Rule 82 request for fees.  In the end, according to Gary, Rule 82 is only a weapon for plaintiffs against defendants and not the other way around.  Not to mention that, when an insurer pays its policy limit, it must also pay an additional component, on top of the limit, for the plaintiff’s attorney’s fees.
 
Any place where large herds of caribou may cross the road will surely have some unique cases.  Gary pointed to one of his own where a woman was rendered a quadriplegic when a car in which she was a passenger struck a moose carcass and veered off the road and rolled over into a ditch.  There are also lots of cases that grow out of the prevalent use of air taxis to travel between villages. 
 
Gary Zipkin summed up life and law in Alaska very simply: “All sorts of strange things happen under the midnight sun.”  

 
 
 
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