My client was a brilliant Ph.D. biomedical scientist who was highly recruited by the Medical University of South Carolina to conduct medical research studies. A native of Tiawan, he spent years climbing the academic ladder at some of our nation’s best colleges and universities before moving his family to the Charleston area. He wanted to put down roots in and bought a modest home in a new Mt. Pleasant subdivision. He also bought the homebuyer’s warranty offered by the developer to protect his investment.
He soon discovered his home had been built below the FEMA approved base flood elevation and flood insurance on his new home was going to cost a small fortune every year. His warranty company summarily rejected his claim for compensation on the grounds a home being built below the base flood elevation wasn’t a construction defect covered under the warranty. The warranty provided he could request AAA arbitration and he did. He represented himself and, as you might imagine, as a Ph.D. scientist he was well prepared and had his claim well documented. He won the arbitration and thought the problem had been solved until he received a certified letter from the warranty company saying they were filing an appeal to an appellate arbitrator.
My client wasn’t stupid and didn’t see any provision either in his warranty document or in the AAA’s arbitration rules granting the losing party the right to appeal. He came to see me, and I didn’t see one either, so I signed him up, and sent a strongly worded letter to the warranty company threatening legal Armageddon if they didn’t abide by the terms of the award. When they blew me off, I filed a lawsuit against them alleging breach of contract, bad faith, a violation of the Unfair Trade Practices Act, and fraud. They responded to my lawsuit by hiring a high-powered, below Broad insurance defense law firm and they filed a blistering answer calling my complaint frivolous, raising defenses I’d never heard of before, and demanding my lawsuit be dismissed, with prejudice, and costs.
According to them, I was trampling on the 1925 Federal Arbitration Act, the “well established” federal policy favoring arbitration, and my entire lawsuit was premature because arbitration was still ongoing. I decided I needed some high-powered legal help of my own and knew a lawyer named Bill Bundy who was a carpenter before he went to law school and practiced construction law, so I contacted him about my case. He said I needed his senior partner, Ellison D. Smith, IV, because Ellison knew all about my kind of case.
I was Ellison’s neighbor on Sullivan’s Island and knew his reputation for being an excellent lawyer, but I really didn’t know him personally. I followed Bill’s advice and met Ellison to discuss my case. I was surprised when he said he didn’t know anything about cases like mine because he’d never seen one like it before. I felt a little better when he said he’d never heard of an appellate arbitration either. As we discussed my case further, he got what I can only describe as a gleam in his eye, much like I would imagine a grand master chess champion would get thinking ten or twenty moves ahead in a game and seeing checkmate. My gaming analogy was more apt than I realized as I soon learned litigation was indeed a game to Ellison. A game we were about to have more fun playing than just about any other case I ever tried.
As the written discovery progressed, our case just kept getting better and better. The more we learned, the more it became apparent the so-called homebuyer warranty was really just an elaborate scheme to limit the developer’s liability for any screw-ups on his part. In effect, the homebuyer warranty got the homebuyer to paying for the developer’s insurance while at the same time limiting the damages he could recover and giving up his right to a jury trial.
When the time came to take depositions, hotheaded me was itching to lay out the whole scheme and expose it for exactly what it was. But Ellison counseled a different approach. A young lawyer tends to come out swinging at everything, he said, but, in a real fight, covering up is every bit as important as trying to land punches. The defense lawyers wanted to throw the land surveyor under the bus and claim he was solely responsible for the elevation error. He was more than willing to fall on his sword to save his main source of income. I wanted to show the problem with their argument was this was Phase II of the development, and the developer already knew about the elevation problem from the Phase I survey of the adjacent property. But Ellison calmly convinced me we’d rather have it be a mistake by the surveyor rather than outright fraud by the developer for coverage purposes under the warranty. When we took the deposition of the appellate arbitrator, he struggled trying to identify the warranty provision or AAA rule providing for an appeal from an arbitration award but steadfastly maintained the warranty company had an inherent right to appeal a legally incorrect award. I wanted to press him on how the arbitrator’s award was legally incorrect but Ellison said we already know they claim an elevation error isn’t a construction defect and suggested we go in another direction. He started asking where the appellate arbitrator worked before he became an appellate arbitrator. He admitted this was his first gig as an appellate arbitrator and said, before that, he was just an ordinary arbitrator. And before that, Ellison asked? When he admitted, before he became an arbitrator, he worked directly for the Homebuyer Warranty Company, Ellison just smiled, gathered up his notes, and ended the deposition. When I asked him why he let the appellate arbitrator off the hook, Ellison replied, we got what we needed and there was little to be gained from telegraphing our punches before trial. I thought I was associating a balls to the wall litigator, when it turned out I was really getting was a Kung Fu master of litigation.
I forget the name of the judge we drew which reflects my lack of respect for the way he conducted our trial. He was gruff and short-tempered right from the beginning thinking his job as a judge was to establish he was the smartest person in the room. Nothing anybody did or said met his high standards. Problem was, Ellison was by far the smartest person in the room which kept pissing the judge off.
It didn’t take long for the defense lawyer to figure out the judge would try to split the baby in half with every ruling, so the defense lawyer started objecting to everything. Often as not the judge would rule at least partially in favor of the defense no matter how ridiculous the objection was. My Kung Fu co-counsel not only deflected the judge’s rulings, he turned them back against the judge and defense counsel. They tried to exclude evidence on one ground, Ellison would simply find an alternative ground to get it in highlighting the importance of the evidence for the jury and revealing the lengths the judge and defense lawyer would go to conceal it from them.
Despite defense counsel’s best efforts and the judge’s heavy-handed rulings, we got all the evidence in we needed to prove our case. Ellison eloquently argued the same facts the judge and defense had tried to suppress entitled our client to a substantial verdict. So large in fact, defense counsel suggested in his closing argument that Ellison and I were just money-grubbing lawyers looking to get rich off of “jackpot justice.”
I gave the final argument on behalf of our client. I began by saying it didn’t matter if the jury thought we were Hacksaw Holmes and Buzzsaw Smith, two of the orneriest lawyers this side of Waco, Texas, what the Homebuyer Warranty Company tried to do to our client was just lowdown downright dirty. The jury agreed and gave us verdict Ellison asked for. So big, the judge couldn’t resist putting his finger on the scales of justice one more time. When the defense moved for a new trial or new trial nisi, the judge feigned he had a grave concern over the amount of the jury’s verdict. So concerned he said he’d hear the motions the following week in Beaufort, South Carolina where he was scheduled to hear cases.
I picked Ellison up and drove him down to Beaufort for the hearing. Ellison, as always, was well prepared for the hearing and knew the law inside out. He studied his notes during the drive and as we waited almost an hour and a half past our hearing’s scheduled time. Defense counsel’s arguments in favor of a new trial were polished but omitted much of actual evidence that supported the verdict that Ellison skillfully pointed out in his response. The judge said he’d have to take the matter under advisement and we’d have to come back after the lunch break for his ruling.
I drove Ellison around Beaufort over the lunch break discovered I wasn’t the hothead of our legal team after all. My Kung Fu co-counsel clearly did not exhibit Shaolin values during the drive as he vented a string of profanities and frustrations about the blankety blank judge. I tried calming him down as best I could but, each time he settled back down, he’d remember something else the judge had said or done that would set him off again. As time ran out and we pulled back up to the courthouse, I became seriously concerned he wouldn’t be able to control his anger when we appeared back before the judge.
Thankfully, as soon as he entered the courtroom, he became his same professional self again. When the judge said he was troubled how $400.00 increased annual flood insurance premiums could justify our $180,000.00 verdict. Ellison simply recited the testimony that the elevation error reduced the fair market value of his house by that amount. When the judge quipped that was what our client paid for the house, Ellison simply reminded the judge the house was built on a concrete slab and it would cost more than that to demolish and replace it with a home that complied with the FEMA elevation. The judge begrudgingly denied the motion to set aside or alter our verdict.
That’s not the end of this story. As word of our client’s victory spread in the subdivision, Ellison and I picked up six other homeowners in the neighborhood with the same problem and each of their cases were settled for considerable sums. And me, well every time I’d run into opposing counsel on the street or at a bar function, we’d both have a good laugh when he’d greet me with a hardy, “Hacksaw!”
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