Around the Nation: February 2013
News and updates from CLM state chairs, reps, and committees.
Attorney Fees for Certain Small Tort Claims
ORS 20.080 now makes it possible for plaintiffs to obtain attorney fees on cases where the amount pleaded is $10,000 or less. Defendants also can recover attorney fees if they bring a counterclaim for $10,000 or less and win. In such cases, a defendant is not required to send a pre-litigation demand to recover attorney fees on its counterclaims.—From Oregon State Co-Chair Member Jack Levy
Duty to Defend Against Construction Defect Suits
In D.R. Horton, Inc. v. Travelers Indemnity et al., the Federal District Court of Colorado held that Travelers’ duty to defend D.R. Horton as an additional insured in an underlying construction defect action was joint and several with any other insurer that owed the same duty to defend. The duty to defend could not be limited based on the duty to indemnify. D.R. Horton could not release one insurer from the liability owed to other insurers that jointly owed the duty to defend because it did not own the insurer’s claim of equitable contribution. Nor could it release from such liability subcontractors who were also considered insurers based on the duty to obtain insurance required by D.R. Horton’s subcontractor agreement.—From Colorado State Chapter Member Mark Neider
No Right to Settlement
As part of its tort reform, Tennessee law provides that a person who has abandoned a spouse who then dies may waive any right to proceeds in a wrongful-death action as well as have no right to institute a wrongful-death action. In late 2012, the Court of Appeals filed an opinion directing a trial court to hold a hearing on whether a husband had, in fact, abandoned his deceased spouse and therefore was not entitled to any portion of a settlement the spouse had negotiated. The court noted that there was proof in the record that the husband had not lived with the spouse or provided support in over two years. An affidavit claimed he had given the deceased a disease, so she threw him out, and he was under indictment for selling crack. The court criticized the trial court for not holding a hearing over the issue of abandonment and the deceased’s children’s guardian for not pursuing this issue.—From Tennessee State Lead Chair Jim Wright
One Billion in Restitution for Non-Group-Rated Employers
In San Allen v. Buehrer, Administrator, Ohio Bureau of Workers’ Compensation (BWC), Judge Richard McMonagle issued a 28-page decision following a lengthy class-action bench trial, ruling that the BWC for most of the past decade had overcharged workers’ compensation premiums to non-group-rated employers in violation of Ohio law governing the calculation of premiums. The judge ordered restitution in an amount yet to be determined pending additional hearings but which is expected to approach a billion or more dollars.
Ohio is a monopoly state in that the only insurance available to employers to cover workers’ compensation losses is issued by the state. Group rating plans have grown in popularity and have provided employers in the group large discounts in premiums as compared to non-group employers. This disparity, while not a constitutional equal protection violation, was found by the court to violate Ohio statutory law calling for a retrospective rating plan rather than a prospective rating plan. A hearing on the final restitution figure is scheduled for early 2013. The BWC is expected to appeal Judge McMonagle’s rulings to the Court of Appeals and ultimately to the Ohio Supreme Court.—From CLM Member Firm Rendigs, Fry, Kiely & Dennis LLP
Spoliation and Discovery
In a case of first impression in New York, Mangione v. Jacobs et al., Justice Charles Markey dismissed the plaintiff’s case for failure to attend a court-ordered independent medical examination prior to undergoing surgery. The plaintiff had a number of actions pending for personal injury and had been ordered to fully disclose her medical records and to appear for a medical examination three times. In dismissing the action as a sanction for spoliation, the court concluded that the defendants had been irreparably prejudiced by the plaintiff’s conduct and that court orders had to be defended. Counsel on both sides must take care to note circumstances where surgery prior to a medical examination might irreparably prejudice the defendant.—From New York State Chair Howard S. Shafer
Eviction by “Pit Bull”
In Tracey v. Solesky, the Court of Appeals ruled that pit bulls are “inherently dangerous,” and landlords can potentially be held strictly liable if a pit bull attacks a person on their property. The Maryland General Assembly made an unsuccessful attempt to revise this ruling in a special legislative session and is expected to try again. A task force appointed by the state Senate president and House speaker will review the ruling to develop a policy that recognizes responsible dog ownership while protecting the public from dangerous animals.
A central issue is the vagueness of the term “pit bull,” which is not a clearly defined or recognized standard breed of dog. A class-action complaint, Weigel v. State of Maryland, has been filed in the district court alleging that, in response to the Tracey opinion, Armistead Homes notified the proposed class members that they are in violation of their lease and the provisions of their membership in the cooperative association, immediately subjecting them to termination.
The Weigel complaint seeks a declaration that the Tracey opinion is “unconstitutional, void, and unenforceable” and that evictions based on the Tracey opinion be “preliminarily and permanently” restrained. A motion to dismiss was filed, and the parties are awaiting the court’s ruling on the motion.—From Maryland State Lead Chair Robert Fiore
PSA Does Not Apply to All Incidents
In a case of first impression, the New Jersey Appellate Division held in Applegrad v. Bentolila that a state law meant to enhance patient safety by having hospitals report serious mistakes provides an absolute privilege but does not extend to every report on such incidents. The decision interprets the 2004 Patient Safety Act (PSA), which was passed in response to the murder of dozens of patients in New Jersey and Pennsylvania hospitals by former nurse and serial killer Charles Cullen. Though post-event investigatory and analytic documents created exclusively in compliance with the PSA and its associated regulations are absolutely privileged from disclosure, the absolute privilege is lost if PSA procedures are not followed or the documents are generated for non-PSA purposes.—From New Jersey State Co-Chair Karen Painter Randall