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					                        “BAIT AND SWITCH” DEFENSE

The frauds employed in this case were cleverly masterminded in order to fool the
defendants, the court and most plaintiffs’ counsel as they are achieved primarily under
the guise of attorney/client privilege and work/product privilege which is protected under
a tri-party liability case. In fact in the local environment where the vast majority of
attorneys lack the expertise and knowledge associated with Bad faith claims this tactic
has a high success rate for the insurer.

We start off with the basic facts of the case:

   1) The home had been affected with damage associated with flooding and water
      damage which were not visible due to the freshly coated paint and other methods
      which made them not readily observable. These defects were known by the seller
      (Strangs) and were conveyed to the realtor Ron Hughes. The facts were restated
      by neighbors to Hughes.
   2) Hughes failed to disclose these facts to buyers.
   3) Hughes had misrepresented facts in another lawsuit Brigitta Englemann v. BGNS
      Corp d/b/a Norris & Co. and Ron Hughes.

All of these facts were either discovered or presumed known by insurer as part of their
duty to investigate the facts. The insurer made a decision to go forward which creates
certain obligations, conflicts and given the facts of this case has indemnified itself
through estoppel.

The Complaint was pled as a classic “Non Disclosure of Hidden but known Material
defects” on the principles of the seminal case Johnson v. Davis [480 So. 2d. 625(Fla.
1985)] the broker acting as transactional broker had a “Duty to Disclose” the facts

Stephen L. Mains advises clients BGNS Corp and Ron Hughes in Reservation of Rights

“Per our discussion please note that Attorney Geralyn Passaro and her firm have been
assigned to continue to represent and defend your interests in this matter. I have
forwarded the complaint to her this morning for the appearance and you should hear from
her to coordinate the answer to the complaint on short order.”

      Note that attorney was chosen to continue defense which has been set up as
       negligent misrepresentation in spite of complaint and facts

“The plaintiff’s complaint includes allegations of, or may be construed as including, and
are not limited to, negligent and/or intentionally wrongful acts. We also note that some
of the alleged damages stem from the discovery of mold at the property in question. The
requested relief includes, but may not be limited to, compensatory damages, costs and
attorney fees.”

      At this point in the letter the insurer sets up the defendants with the concept that
       the case may be construed as “negligent” in spite of the fact that the case was
       specifically plead to avoid any possibility that it could be a negligent
      The line “and/or intentionally wrongful acts” sets the defendants up to be
       concerned, via the use of the word intentionally.

“The complaint is poorly pled and it is difficult to assess the allegations, but if the
plaintiffs show that the alleged wrongful act of failing to disclose hidden but known
defects was intentional on the part of any insured then there would be no coverage for
such an award.”

      This is where the insurer has employed a truly artful means at deceiving the
       defendants, by stating that “the wrongful act of failing to disclose hidden but
       known defects was intentional on the part of any insured… no coverage. ”
      Here the insurer failed to state that if any insured forgot to disclose it would have
       been a mistake not a wrongful act Billian v. Mobil Corporation,[710 So.2d 984
       (Fla. 4th DCA 1998)].
      Insurer has also stated or implied that this is a Johnson v. Davis case by including
       phrase “failing to disclose hidden but known defects” but was misrepresenting the
       basic fact that in a Johnson-Non Disclosure cause of action the burden of proof
       does not require proof of intent by implying otherwise.
      XL Insurance has set up a classic “bait and switch” by baiting the defendants into
       believing that negligence (negligent misrepresentation) is a good thing to defend
       for and “non-disclosure of hidden but known defects” is wrongful and bad,
       resulting in no coverage.

The XL Insurance has set up an improper defense of the case and misrepresented
the basic and pertinent facts of Johnson Non-Disclosure to discourage defendants
from stating the truth in the case for fear of non-payment. Further, (conflict of
interest) Passaro carries this process and frauds forward in her representation. This
tag-team relay process would go undetected by most attorneys. (During mediation
Mains tells defendants not to settle, as the insurance co. has won 8 out of 10 similar

Passaro sets up defense for negligent misrepresentation which calls for defendants to
deny everything and to settle only for their portion of damages where the plaintiffs relied
on defendant’s misrepresentation.

Hughes commits perjury and causes the locals to panic when Casares brings this up
before Judge Kanarek, this is due to their complete lack of understanding on estoppels,
bad faith and fact that the improperly cited case (Gilchrist Timber v ITT Rayonier Inc.,
696 So. 2d 334 (Fla.1997)for their barred defense is not even a Johnson Non-Disclosure
case. Gilchrist Timber v. ITT Rayonier Inc. was pled as a negligent misrepresentation
case that was only citing this Johnson v Davis to have a certain part of their case affirmed
in court.

Passaro further continues this fraud by using the same improper argument after the
mediation in her letter to former attorney Harold G. Melville on November 17, 2009

“As a follow up to the Mediation Conference, we would like to point out several Florida
cases which are instructive on the issues of prejudgment interest, limitations on damages,
and comparative negligence.”

 “At the Mediation, you contended that because this is a duty to disclose case, there can
be no comparative negligence on the part of your client in this real estate transaction.” As
you know, the complaint alleges a duty to disclose information to client and therefore this
is an action that stems from negligence. Indeed this is a species of negligent
misrepresentation by contending that the defendant committed a negligent
misrepresentation by failing to disclose pertinent information. In Gilchrist Timber v ITT
Rayonier Inc., 696 So. 2d 334 (Fla. 1997), the Supreme Court stated that comparative
fault provisions applied to actions involving negligent misrepresentations.”

      This is where the twisting of the facts gets interesting. The case was not pled as a
       duty to disclose case which is part of both negligent misrepresentation and
       Johnson Non-Disclosure. Duty to disclose is a part of either the tort of Negligence
       or the Tort of Fraud, the case specifies Non-Disclosure of hidden but known
       defects which although this stems from the tort of Fraud the Supreme Court of
       Florida in the seminal case Johnson v. Davis specifically excluded the need to
       prove intent and made the statement that reliance on the misstatement or lack of
       statement was justified.
      Justified reliance excludes any argument for partial or percentage reliance and
       therefore in itself excludes any comparative fault provisions as the standard jury
       instructions for negligent misrepresentation requires a measurement of reliance!

   In addition to the “bait and switch” defense tactic, Passaro employs any and all means
   of cheating in this case in order to prevent justice. This includes numerous instances
   where she has LIED TO THE COURT, or attempted to threaten Casares with
   actions which were in violation of court procedure or rules. She has threatened to
   curtail depositions stating she would seek protective orders when questioning comes
   close to unveiling her crimes to the court.

   During depositions of Chalmers Morse and Kay Brown, Passaro threatens to
   terminate the discovery in the event I ask any questions regarding understanding of
   comparative damages or the reservation of rights letter in spite of Florida Rules of
   Civil Procedure 1.280. Whereas the notion of relevancy is obviously broader in the
   discovery context than in the trial context. A party is typically entitled to discover
   relevant evidence that would be inadmissible at trial, so long as it is “reasonably
   calculated to lead to the discovery of admissible evidence.” Amente v. Newman, 653
   So. 2d. 1030, 1032 (Fla. 1995), a leading treatise described the traditional relevancy
   standard as follows:

       Certainly the requirement of relevancy should be construed liberally and with
       common sense, rather than in terms of narrow legalism. Indeed, it is not too
       strong to say that discovery should be considered relevant where there is any
       possibility that the information sought may be relevant to the subject matter of the

The respondent bears the burden of showing that the documents requested and
interrogatories propounded are neither “reasonably calculated to lead to the discovery of
admissible evidence” under the traditional relevancy standard, as well as under the
“liberal” relevancy standard for punitive damages allowed in Florida’s tort reform act.
Fla. R. Civ. P 1.280(b)(1); Fla. Stat Section 768.72.

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