10/24/2012
Around the Nation: October 2012

Around the Nation: October 2012

News and Updates from CLM State Chairs, Reps, and Committees.

By Bevrlee J. Lips

OREGON

Make Sure Premiums Are Paid

Insurance is an absolute must-have if a contractor wants to get paid for his work. Pincetich v. Nolan highlights the importance of maintaining continuous insurance coverage throughout the contractor’s work. The case involved developers who contracted to build a house. After the contractor began work, the Construction Contractors Board (CCB) suspended his license to perform construction work because he had allowed his liability insurance to lapse. The CCB reinstated the contractor’s license once he had obtained replacement liability insurance—14 days later. The contractor worked for roughly six more months to construct the house after the CCB reinstated his license. He then sued the developers for monies owed under the contract. The Oregon Court of Appeals held that the contractor lost his payment claim because he was not continuously licensed throughout the work as required under ORS 703.131.—From Oregon State Lead Chair Jack Levy

SOUTH DAKOTA

Nationwide Takes a Hit in Duty to Defend

A Day County jury returned verdicts for two insureds in a dispute with Nationwide Insurance in the amount of $2.24 million, including $1 million in punitive damages. With interest, attorneys fees, and costs, the final judgment will be $2.4 million to $2.5 million. A separate special verdict form was used for each plaintiff, and the jury had to answer 23 separate issues. The jury found against Nationwide, concluding it breached its duty to defend and indemnify and acted in bad faith. Prior to the bad faith trial, Circuit Court Judge Scott Myron ruled that Nationwide had breached its duty to defend the insureds in the underlying lawsuit and ordered Nationwide to pay attorneys fees that the insureds incurred for their defense.—From South Dakota State Chair Roy Wise

TENNESSEE

The Doctrine of Apparent Authority

In Thomas v. Pointer and Market Finders Insurance Corp., the insureds (residents of Missouri) paid for an insurance policy on a house they owned in Tennessee through an agent who, in turn, had an independent contractor arrangement with an intermediary agent/broker. The intermediary agent acquired a policy through Lloyd’s. When the agent did not turn over the premiums to the intermediary, Lloyd’s sent out notices of cancellation to the agent and to the Tennessee address. However, they were not received by the insured. The house burned and the insurer denied the claim. In a suit filed by the homeowner against the intermediary agent, the trial court granted summary judgment finding no real or apparent authority, relying on the independent contractor agreement between the agents. The court of appeals reversed the decision, relying on the doctrine of apparent authority.—From Tennessee State Lead Chair Jim Wright

NEW JERSEY

Lines Drawn in Ethical Use of Social Media

Two New Jersey defense attorneys could be facing ethics charges for allegedly encouraging a paralegal to “friend” a plaintiff on Facebook for a personal injury case in order to gain access to information unavailable to the public. The Office of Attorney Ethics has charged the attorneys with violating the rules of professional conduct, including communicating with represented parties, failing to supervise a non-lawyer assistant, and engaging in conduct involving dishonesty. The attorneys claimed that the paralegal was asked to perform a broad and general Internet search, but she was never instructed to friend the plaintiff. They further claimed that they did not understand the concept of a friend request, thinking it was an automatic process in which anyone who clicked the button could view another person’s information. The first hearing is expected to take place this fall.—From New Jersey State Chair Karen P. Randall

MONTANA

No Agreement, No Release

In Murphy v. Home Depot, the claimant cut his thumb in the defendant’s store and required several stitches. He later developed an infection and missed 11 days of work. He filed a claim against the store, proposed a financial term for settlement ($7,500), and the parties agreed. Home Depot presented a global release, including language requiring a full release “of any and all claims, legal[,] equitable, or otherwise, without limitation.” It was summarily rejected by the claimant. Home Depot sought the trial court to enforce its release stating that the claimant had agreed to the terms. The trial court granted its request. The Montana Supreme Court, however, reversed the decision holding that “both parties agreed to the amount of the settlement, but neither party agreed upon what claims would be released.”—From Montana State Lead Chair James C. Cumming

ILLINOIS

Cameras in the Court Room

In January, the Supreme Court of Illinois unanimously agreed to allow cameras in Illinois Circuit Court courtrooms. The chief judge of the Circuit Court of Cook County has formally applied to the Illinois Supreme Court to bring a pilot program to Cook County. He expects implementation to begin before the end of the year. Discretion to allow cameras will be vested in the chief circuit court judge and in the trial judge to ensure fair and impartial trials are not compromised. Cameras will be excluded from criminal bond hearings, custody hearings, divorce proceedings, adoptions, and cases involving juveniles and trade secrets. The goal of the program is to provide transparency in government. The pilot program is presently in place in Madison County, the Quad Cities, and several other counties.—From Illinois State Lead Chair Jim Foster

MISSISSIPPI

Constitutionality of Non-Economic Damages Cap in Question

The Mississippi Supreme Court has declined to address an issue certified to it by the 5th Circuit Court of Appeals in the case of Sears, Roebuck & Co. v. Learmonth, concerning the constitutionality of Mississippi’s statutory cap on non-economic damages in civil cases. The court held that the issue had not been properly preserved at the trial level and, thus, was not before it on appeal. The court may shortly have another opportunity to address this issue, however, since a state court judge has ruled that the statute is unconstitutional, upholding a $6 million jury verdict in an apartment negligence case. That case is presently pending on post-trial motions, but if and when it does make its way to the state’s Supreme Court, the constitutionality issue will be squarely before it and must be faced head-on.—From Mississippi State Lead Chair Timothy Crawley

OHIO

Breach of Contract Statute of Limitations Shortened

Ohio Governor John Kasich signed Senate Bill 224 into law in June 2012, amending Ohio Revised Code Section 2305.06 and shortening the time in which an action upon a written agreement, contract, or promise may be brought to court. Formerly, breach of written contract lawsuits could be filed within 15 years after the cause of action occurred. With the revised code amendment, the statute of limitations period is now reduced to eight years. Actions for breach of an oral contract still must be brought within six years after the cause of action occurs. Historically, Ohio was tied with Kentucky for having the longest period of limitations in the country. With this amendment, Ohio now moves closer to the six-year or shorter limitations period existing in 40 states and the District of Columbia.—From Ohio Publications Committee Chair Jonathan P. Saxton and Committee Member Sarah Lovequist



Bevrlee J. Lips was managing editor of Claims Management magazine (now CLM Magazine) from January 2012 until March 2017.

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