Do It Perfectly And Still Get Sued

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Isn’t perfect better that good? In a perfect world, it might be. But, in our own, perfection may be flawed. We’re not thinking about the incremental cost of going from good enough to perfect. We’re not talking about the impossibility of achieving perfection (points beyond which being unattainable, because there is nothing more perfect than perfect). We’re not talking about different views as to what constitutes “perfect.” We’re talking about cutting disputes short when one chooses practicality over perfection.

We’re going to illustrate our view by way of a September 20, 2017 court decision dealing with interpreting an insurance policy. Insurance-adverse readers, don’t tune out at this point. This is not about insurance. It is about drafting and language.

We and others have written a lot about writing agreements in a way that conforms to language norms. There are grammar and style books for the general writer. There are the same for our craft. Today’s story is about someone (unnamed) who followed the rules of grammar, and yet needed to defend itself in an expensive lawsuit over its perfect “grammar.” The soon to be cited policy language followed those rules, yet a shopping center developer and its insurance company got to hire a bunch of law firms to perform in front of the Delaware Superior Court, arguing that rules of grammar meant nothing. We freely admit that we don’t know the ultimate economics behind this particular developer’s claim against its carrier, and we’ll assume that even the seemingly low chance of success was sufficient to make it wise for the developer to argue for a contract interpretation contrary to “perfect” grammar. [A 5% chance of a ten million dollar outcome is $500,000. So, spending less than $500,000 to pursue a ten million dollar claim makes economic sense. There may be other reasons not to pursue such a claim (or to pursue such a claim even if it would likely cost more than $500,000), but on a “hard” dollar basis, spending a lot of money for a slim chance of success isn’t always dumb.]

The policy at issue, a “Contractor’s Protective, Professional and Pollution Liability Policy,” promised to pay the insured when the claim against it arose by reason of “an actual or alleged negligent act, error or omission in the rendering of Professional Services.” [As will be of no surprise to any reader, the policy language continues with a “provided that:” but the items listed in the policy are of no moment here.

[To get all readers on the same page, if a policy doesn’t extend coverage to a particular claim, the carrier has no obligation to provide a “defense.” If it does, even if the claim is worthless, the carrier must provide a defense to its insured.]

A shopping center tenant accused its landlord of fraudulently and intentionally jacking up electric charges. The scant facts in the court’s decision would lead almost all readers to believe that the allegation was true. Don’t ask why, but the billing process qualified as a “Professional Service.”

So, what is the issue and what does it have to do with our suggestion that, sometimes, perfection isn’t the smartest way to go?

The claim clearly alleged fraud and intent. The policy seems not to provide coverage for claims of fraud or intentional wrongs. After all, it only covers: “an … alleged negligent act, error or omission.” Guides to English usage offer the following rule, using The American Heritage Book of English Usage as our example. It instructs that:

An initial article, preposition, auxiliary verb, or modifier will tend to govern all elements in the series unless it is repeated for each element. For example, if you set up a series of nouns with the first modified by an adjective, the reader will expect the adjective to modify the rest of the series as well.

A cited Kentucky case says this in a more direct way:

The first adjective in a series of nouns or phrases modifies each noun or phrase in the following series unless another adjective appears.

In this insurance policy, the adjective “negligent” precedes a series of nouns: “act, error or omission.” The comma between “act” and “error” denotes a list. [Credit the Court for saying that.]

So, the policy followed a “perfect” rule of grammar, and we still are presented with a Court telling us that it did and the rules apply.

If you haven’t figured out the shopping center developer’s “interpretation” yet, we’ll relieve that stress right now. It argued that the insurance policy was ambiguous in that “negligent” only modified “act” and did not modify “error” or “omission.” So, according to its theory, because its tenant’s claim alleged a fraudulent or intentional error in the developer’s building practices, the policy afforded coverage. After all, while only negligent acts were covered, all “errors” and “omissions” were also covered.

We aren’t going to waste our readers’ time (more than we have already) by explaining why the Court ruled in favor of the insurance carrier, finding no coverage. It is for the reasons almost all readers already know. For those who don’t know and for those who want to confirm their own judgment, click: HERE to read the Court’s decision.

Had the policy been written as covering only:

an actual or alleged negligent: (a) act; (b) error; or (c) omission, in each case, in the rendering of Professional Services[,]

the probability of the developer’s success drops dramatically, and it is unlikely that it would have proceeded with its coverage claim against its insurance carrier.

Here’s the dilemma as we see it. We already craft agreements using the “adjective: (a); (b); or (c)” format. When we do so, aren’t we implicitly saying that anytime we say: “adjective a, b or c” we only wish to modify “a”? That’s what the developer did here. We’ll assume that the policy in question was consistent in the way it used adjectives to modify lists. Nonetheless, it wound up providing a “defense,” not to its insured, but to itself. What would have been the result if the policy had been written as our documents are commonly written: mixing both approaches to modifying lists?

So, what should we do? Frankly, Ruminations hasn’t figured that out. Purists would say that the rule of grammar doesn’t go away just because we sometimes, to avoid confusion, use the “(a); (b); ….; or (x)” formulation, but we’re not so sure. At this stage of our thinking, we’re favoring a “brute force” approach. Just as some comprehensively thought-out documents include a set of “rules of construction” (such as, “includes” means “includes without limitation”), perhaps the rule of how a single adjective modifies the entire list that follows the adjective should be added to our documents.

So, for now, we urge clarity over slavish adherence to the “perfect” rule and that ties today’s posting right back to its opening words. Sometimes, we need to be practical and write things in a way that shouldn’t be needed. Yes, bring the message home. Using words currently in vogue: “Tell it like it is” or how it is meant to be.

What do readers think? Tell us. Post your comment.

[airbnb for retail stores? Take a look: HERE  or HERE.

We’ll probably Ruminate about this concept down the road, but we have no experience and we’d sure like to hear from readers who have any experience.]



  1. Elliot L. Warm, Esq. says

    I am always conscious of proper grammar and understand the main point, although, frankly, there is a tremendous amount of poor grammar in the writing of many lawyers, and efforts to determine intent based on strict rules of writing can be dicey (for example, where the use of the word “that” rather than “which” may be grammatically meaningful but the draftsman has no concept of the distinction between restrictive and non-restrictive clauses). In this instance I could at least try to formulate an argument based on the fact that, in order for an act to be an adverse event, it must be negligent (if not intentional, which places it in another category). However, an error, and maybe even an omission, are “bad” things by their very nature, without need for any adjective such as “negligent.” I can reasonably comprehend the need for protection against both (a) negligent acts and (b) errors – (a) and (b) being perhaps birds of a feather. Having said all the above, I would rest my case in this situation not only on the grammatical aspect but on the common sense reading of the words.

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