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7th Circuit: Stop using specialist jargon

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The 7th Circuit Court of Appeals affirmed a District Court ruling in a complex reinsurance case and asked attorneys to be mindful of the language they use in these types of cases.

In Indiana Lumbermens Mutual Insurance Company v. Reinsurance Results, Inc., No. 07-1823, the federal appellate court dealt with the task of determining whether the District Court was correct in granting summary judgment in favor of Indiana Lumbermens. Reinsurance Results, Inc. - which reviews an insurance company's claims against its reinsurers to ensure the insurance company receives the benefits to which its reinsurance contracts entitle it - sought a third of $2.2 million dollars it claimed it obtained for Lumbermens as a result of a review.

Judge Richard Posner broke down the opinion into simpler terms compared to complicated industry terms the attorneys had used in their briefs. Lumbermens had changed the way it paid for its reinsurance premiums to increase the amount of surplus shown on its books. An increased surplus means Lumbermens would not have to pay its reinsurers a premium on certain policies. The accounting change affected the amount of money Lumbermens could bill its reinsurers for losses covered by policies. Lumbermens entered into a contract in 2004 with Reinsurance Results, which alerted Lumbermens that its accounting policy might be improper. Lumbermens' accounting firm advised the company to revert back to its pre-2000 ways of paying premiums.

As a result of the switch back, Reinsurance Results found Lumbermens was entitled to more than $2 million from its reinsurers. Reinsurance Results claimed according to its contract with Lumbermens, it was entitled to a third of that money.

The 7th Circuit agreed with the District Court that Reinsurance Results was not entitled to a portion of the $2.2 million because the benefit Lumbermens received as a result of Reinsurance Results discovering the accounting issue was not one that Lumbermens was contractually obligated to pay Reinsurance Results for discovering. Reinsurance Results could have tried to negotiate the contract to be broader, but under its current contract, it was seeking money in which it was not entitled.

Judge Posner also dedicated a portion of the opinion to reminding attorneys that most judges are not specialists but generalists and therefore will not understand complex jargon relating to a specific industry.

"Lawyers should understand the judges' limited knowledge of specialized fields and choose their vocabulary accordingly. Every esoteric term used by the reinsurance industry has a counterpart in ordinary English, as we hope this opinion has demonstrated," he wrote.

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  1. Indiana's seatbelt law is not punishable as a crime. It is an infraction. Apparently some of our Circuit judges have deemed settled law inapplicable if it fails to fit their litmus test of political correctness. Extrapolating to redefine terms of behavior in a violation of immigration law to the entire body of criminal law leaves a smorgasbord of opportunity for judicial mischief.

  2. I wonder if $10 diversions for failure to wear seat belts are considered moral turpitude in federal immigration law like they are under Indiana law? Anyone know?

  3. What a fine article, thank you! I can testify firsthand and by detailed legal reports (at end of this note) as to the dire consequences of rejecting this truth from the fine article above: "The inclusion and expansion of this right [to jury] in Indiana’s Constitution is a clear reflection of our state’s intention to emphasize the importance of every Hoosier’s right to make their case in front of a jury of their peers." Over $20? Every Hoosier? Well then how about when your very vocation is on the line? How about instead of a jury of peers, one faces a bevy of political appointees, mini-czars, who care less about due process of the law than the real czars did? Instead of trial by jury, trial by ideological ordeal run by Orwellian agents? Well that is built into more than a few administrative law committees of the Ind S.Ct., and it is now being weaponized, as is revealed in articles posted at this ezine, to root out post moderns heresies like refusal to stand and pledge allegiance to all things politically correct. My career was burned at the stake for not so saluting, but I think I was just one of the early logs. Due, at least in part, to the removal of the jury from bar admission and bar discipline cases, many more fires will soon be lit. Perhaps one awaits you, dear heretic? Oh, at that Ind. article 12 plank about a remedy at law for every damage done ... ah, well, the founders evidently meant only for those damages done not by the government itself, rabid statists that they were. (Yes, that was sarcasm.) My written reports available here: Denied petition for cert (this time around): http://tinyurl.com/zdmawmw Denied petition for cert (from the 2009 denial and five year banishment): http://tinyurl.com/zcypybh Related, not written by me: Amicus brief: http://tinyurl.com/hvh7qgp

  4. Justice has finally been served. So glad that Dr. Ley can finally sleep peacefully at night knowing the truth has finally come to the surface.

  5. While this right is guaranteed by our Constitution, it has in recent years been hampered by insurance companies, i.e.; the practice of the plaintiff's own insurance company intervening in an action and filing a lien against any proceeds paid to their insured. In essence, causing an additional financial hurdle for a plaintiff to overcome at trial in terms of overall award. In a very real sense an injured party in exercise of their right to trial by jury may be the only party in a cause that would end up with zero compensation.

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