105
Back in his own office, Boone switches on his computer, sticks in the thumbdrive, and peruses Schering’s billing records.
He seems to have been working on four cases at the time of his death.
One of them is a multimillion-dollar house on a ridge in Del Mar that appears to have developed a serious slab crack in the foundation, with further cracking in the driveway. The second apparently involves major stucco cracking throughout a strip mall in Solana Beach. The third features a condo complex on the bluffs overlooking the beach. The bluff, as far as Boone can discern, appears to be sliding away.
The fourth is the infamous La Jolla sinkhole.
106
What spices were to the early Portuguese navigators, what gold was to the Spanish conquistadors, tobacco to Virginian plantation owners, and opium to Afghani warlords, real estate is to Southern California businesspeople.
Real estate—land, houses, and business parks—is the bottom-line source of wealth on the golden, coastal strip. It’s the basis for investment, lending, exchange, retail, money laundering, you name it.
So when eighteen expensive homes suddenly drop into a hole, the symbolic value is enormous.
The bottom, literally and metaphorically, falls out.
Someone is going to pay.
The question is, who?
Which, Boone thinks, is a very pertinent question when you want to know who had a motive for wanting Phil Schering in the past tense, because the late Phil was a soils engineer, not only a soils engineer but also an expert witness soils engineer, not only an expert witness soils engineer but also a very effective expert witness soils engineer who could potentially have a big say in determining . . .
. . . who pays.
Phil was billing an insurance company.
107
“Insurance companies don’t generally kill people,” Cheerful says, “in the physical sense. They hire lawyers who kill people in the financial sense.”
At first, Cheerful wasn’t, well, cheerful about Boone waking him up late at night, which for him is anything after 9:00 p.m. So when Boone rang his bell at the unheard-of hour of eleven twenty-three, Cheerful expected that someone had better be dead. Well, yeah, someone was, but it was Phil Schering, and Cheerful didn’t give a damn about that, except for how it might affect Boone.
Cheerful has a very simple philosophy about humanity. He loves his few friends—basically the Dawn Patrol— and would do anything to help them. The rest of the human race exists solely to make him money.
Which it does.
And money is the topic that Boone came to seek his advice about. Cheerful looks at the copy of Schering’s bill and says, “Technically, Hefley’s is not an insurance company. It’s a reinsurer.”
“Meaning that it insures again?”
Correct, Cheerful instructs him. Sometimes a primary insurance company takes on a risk that is too large for it to cover on its own, so it mitigates some of that risk by insuring it with a “reinsurer.”
“Kind of like a small bookie laying off a piece of a large bet?” Boone says.
“That’s a rough but adept analogy,” Cheerful admits.
“So a bunch of expensive homes drops into a hole,” Boone says. “The insurance company can’t handle the whole loss, so they turn to the reinsurer to pick up the bill.”
It’s not that simple, Cheerful explains. For one thing, it’s highly unlikely that all the homes, or even a majority of them, would have the same insurance company, and even less likely that each of those carriers would reinsure with Hefley’s. The company probably had one or more of the destroyed homes, which, as total losses, would stack up into the tens of millions of dollars, and hired Schering to determine the cause of the loss.
“But the cause of the loss is simple,” Boone says. “The landslide.”
“That’s ignoring the question,” Cheerful grumbles, “of what caused the landslide. What was the cause of the cause?”
“Why does that matter?”
“It matters a lot,” Cheerful says.
Insurance companies do not write coverage for earth movement. It’s right there in the small print under “Excluded Coverages.” What the underwriting gurus would tell you is that insurance is meant to protect you from accidental, sudden events—storms, floods, fires—and that earth movement is neither sudden nor accidental. It takes a long time and it’s no accident. The earth is always moving—that’s what dirt does.
“So Hefley’s is off the hook anyway. The earth moved.”
“Not so fast,” Cheerful says. “You can’t just look to the cause of the loss, you have to find the ‘proximate cause.’”
“You mean, what sort of caused it?”
“Not the
“What’s that?”
“Go to the library,” Cheerful says. “Preferably a law library. You know any good law firms?”
“Yes.”
“Good night.”
“Good night,” Boone says. “Are those baby hippos on your pajamas?”
“Yes. So what?”
“Nothing. It’s just funny, that’s all.”
“Is it?”
“No.”
“I didn’t think so. Get out.”
Boone gets out.
108
Petra was amazed at how quickly Boone became adept at researching case law.
He’d phoned her and asked her to meet him at her office, saying that he needed her help, and she’d come. Without saying how he’d come about the information, which might have compromised her as an officer of the court, he told her what he’d learned about Phil Schering and why he needed to research something called “proximate cause.”
She showed him how to use the search vehicle on the computerized case law, and he was at it like a Supreme Court clerk. Truly impressive. They worked at it all night. By the time a pink sky snuck through the east- facing window, Boone had for himself a good grasp of the existing California case law regarding earth movement and coverage.
“There’s a chain of events leading up to any loss,” he says. “Some causes of loss are either implicitly or explicitly covered under the insurance contract, and some are specifically excluded. California case law states that if
