By Jane F. Pribek
Minneapolis attorney John H. Faricy Jr. can sum up the theories of all of his cases with four words: “Promises should be kept.”
In his most recent case in December, a Ramsey County jury agreed. It awarded his client, API Inc., a Roseville construction company, a $52.5 million verdict against its insurer, OneBeacon America Insurance Company, for its failure to defend it against more than 700 personal injury claims from the 1980s and ‘90s related to asbestos exposure. API ultimately had to file for bankruptcy as a result of facing those claims without OneBeacon’s bargained-for assistance.
At issue were policies with OneBeacon and other insurers dating back to the late 1950s and ‘60s. The policies could not be found.
Faricy and his team were able to convince the jury not only of the policies’ existence, but also that OneBeacon was acting in bad faith and in breach of its fiduciary duty — to the tune of $25 million of that verdict.
The case is not over, says Faricy, of Faricy & Roen P.A., a five-attorney firm in Minneapolis. Post-verdict motions will be heard in February and appeals are likely. Still, he maintains that the case represents a huge victory for his client and consumers everywhere.
“Insurance protects the public, and that’s why this is an important verdict — because a number of insurers, including OneBeacon, have taken the position that, in Minnesota, to quote the title of Dennis Rodman’s book, they can be as ‘Bad as they Wanna Be,’ no matter what the consequences to the insured and the public may be. They are wrong,” Faricy says.
This was not the first time Faricy has been involved in an action involving asbestos claims and insurers reneging on coverage. His first dates back to 1982 in New York, involving Johns Manville products. The litigation spanned close to a decade. The next phase, which also lasted about that long, took place in California and New York. In these cases, the insurers eventually settled on terms favorable to his clients in the billions of dollars, but only after protracted litigation.
API retained the services of Faricy’s firm in 2002.
He recalls, “We took the case because we thought our client was being treated unfairly and that the insurance companies were evading their obligations. Everyone should be able to rely on the insurance coverage they purchase. It seems that claims departments are being seen, more and more, as profit centers. But insurance companies are supposed to make their money on investments, not on denying claims.”
As with his previous cases, this was a two-front war: the coverage dispute and a concurrent objection to his client’s bankruptcy. API managed to settle with all other insurers except OneBeacon.
The trial lasted for about a week and a half, with Faricy’s colleagues, Craig Roen and Mark Gwin, taking the lead in state court, while Faricy was pulling for API in a simultaneous bankruptcy court trial.
The verdict was a group effort for the firm, he says. It’s common for all members of his firm to work together on cases. And if ever a case merited the efforts of all five attorneys, plus all its staffers, this was it. The case represented a gargantuan investment of time, money and emotion.
Faricy was, of course, thrilled with the verdict, which is believed to be the highest in Ramsey County history. But perhaps more important to his client was the jury’s finding that coverage existed from the years 1958-66, and there was no cap for most of that coverage. Thus, future claims will be covered. And, unfortunately, there will be more, he predicts.
“I think most people understand that asbestos has been a horrible catastrophe for this country, and given the lag time, we don’t even know the number of claims that will be coming in the future. Some people have estimated total claims, and all those estimates have been low.”
Of additional importance, to Faricy personally, was that he was able to help a local client. While he has always been based in Minnesota, much of his practice has been devoted to causes elsewhere. “I have something like two and a half million frequent flyer miles,” he quips. “It’s good to be home.”
‘A healthy dose of outrage’
Faricy says he went to law school “because I wanted to help people. I wanted to learn about how the system works, and use it to come toward some sort of greater good.”
When he began his legal career after his 1982 law school graduation, he represented insurers. In that capacity, he gained myriad trial experience and also got a glimpse into how insurers operate.
“But after a while, I became less and less enamored of the insurance industry, and started to feel like I wasn’t doing what I went to law school to do. Also, I have a real sense of the underdog. And the underdog can be a corporation when its insurer denies coverage,” he says.
As for how he specifically got involved in the Johns Manville case — the case that set the course of his career path — he says, “I knew there were special endorsements on the Manville policies, and no one else seemed especially interested in going after them.”
The proof problems probably seemed insurmountable to others, he adds. But also, “This was a multibillion-dollar deal, and to get in the way of that is a real challenge. There’s a big train going down the track, and to stand in front of the train and avoid being flattened is a real challenge.”
Similar facts and themes have emerged in his other cases. They have almost all involved lost policies from several decades ago, requiring him to “reconstruct” them. This can be done by finding forms that were used at the time in question, examining accounting records, looking for certificates of insurance, and/or locating witnesses. It’s a lot of detective work, he says.
In addition, discovery disputes are commonplace. Either documents aren’t produced, or the proverbial “needle in a haystack” shows up in the form of dozens of bankers’ boxes.
“The cases are always hard-fought, at every turn,” he says. “I find it takes a healthy dose of outrage to keep going, because otherwise, you’re not going to be suitably tenacious. These cases go on for years and years, and sometimes along the way you lose when you really ought to win. But you just have to keep on going to get a great result.”
Born: Nov. 5, 1955; Augsburg, Germany
Education: Tulane University, B.A., 1977; William Mitchell College of Law, J.D., 1982
Employment: Faricy & Roen, 1996-present; Law Offices of John H. Faricy Jr., 1991-96; Pusterino, Pederson, Titlton & Parrington, 1983-91
Affiliations: Hennepin County Bar Association; Minnesota State Bar Associations
Hobbies: Hiking, travel
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