2/27/2018

National News: February 2018

News and verdicts that affect you from across the country

By Phil Gusman

Oregon’s $500,000 non-economic damages cap is successfully challenged, the 5th Circuit establishes a new test for applying maritime law to offshore oil and gas contracts, and, in California, the Right to Repair Act is determined to apply as the exclusive remedy for common law causes of action of negligence and strict liability.

Oregon

$500,000 Non-Economic Damages Cap Successfully Challenged

Plaintiffs’ lawyers have repeatedly challenged Oregon’s $500,000 non-economic damages cap (ORS 31.710) as unconstitutional, and one of those challenges recently succeeded in Rains v. Stayton Builders Mart. The Oregon Court of Appeals found that the cap violated the remedy clause of Oregon’s constitution on an as-applied basis. The jury awarded the plaintiff $3.1 million in non-economic damages after he was paralyzed in a construction site accident. The court found $500,000 to be a “paltry” amount in relation to the jury award. The court refused to apply the damages cap to an accompanying loss of consortium claim as well, finding “no principled reason to conclude” that reducing the consortium award from $759,000 to $500,000 would leave the plaintiff’s spouse with a “substantial remedy” that would satisfy Oregon’s constitution.—From CLM Member Allen E. Eraut

California

Supreme Court Clarifies Right to Repair as Exclusive Remedy

California practitioners are well aware of the Right to Repair Act as an exclusive remedy for construction defect claims in California. However, the plaintiffs’ bar has frequently been able to get around the Right to Repair Act by pleading common law causes of action for negligence or strict liability in construction defect cases, thus reducing the statute’s ability to allow developers to resolve issues prior to litigation. The California Supreme Court, in McMillin Albany LLC et al., v. The Superior Court of Kern County, held on Jan. 18 that the Right to Repair Act, codified through SB 800 in Cal. Civil Code 895–945.5, applies as the exclusive remedy not only under the statute, but also for common law causes of action of negligence and strict liability (not breach of contract, fraud, or personal injury). The court’s ruling will require plaintiffs to adhere to the statutory right to repair pre-litigation procedures prior to filing suit for common law causes of action, such as negligence and strict liability.—From CLM Member Carl J. Basile

Ohio

Any Vehicle May Qualify As a Temporary Substitute

In Conaway v. The Cincinnati Ins. Co., an Ohio appeals court determined the mere intent to use another vehicle as a temporary substitute for a covered automobile results in coverage for personal injury while occupying it. In the case, Kyle Conaway’s Ford F-450, covered under a Cincinnati Insurance policy, broke down one evening and could not be towed due to the weather. A passerby took Conaway, who was the driver, and his father, who was a passenger in the truck, to the home of a nearby company employee. While driving the men to work the next day, the employee lost control of his minivan and Kyle’s father was killed in the ensuing crash. The policy, which provides coverage for injury that occurs while occupying the pickup “or a temporary substitute for such covered ‘auto,’” does not define a “temporary substitute” auto. Based solely on Kyle Conaway’s deposition testimony of his intent to occupy the minivan as a temporary substitute vehicle, a majority of the appellate court held, as a matter of law, that the minivan qualified as a “temporary substitute vehicle.”—From Northeast Ohio Chapter Vice President Michael C. Brink

South Carolina

Court of Appeals Rules Struck Pedestrian Passes Scintilla Test

In Willie Jordan v. Jane Doe, the South Carolina Court of Appeals recently addressed a party’s duties under the South Carolina uninsured motorist statute. In the case, the plaintiff was talking on the phone while walking into a local store when he was struck by an unidentified woman who then left the scene. The issue was whether the plaintiff was negligent in failing to determine the identity of the other vehicle and its driver. Plaintiff drove around for 20 minutes looking for the driver, asked witnesses in the parking lot for the identity of the driver, and found a local merchant with a video of the driver. The Court of Appeals held that the plaintiff’s actions presented a scintilla of evidence that he was not negligent in failing to determine the other driver’s identity, and thus reversed the trial court’s decision to grant Jane Doe’s motion for summary judgment.—From CLM Member Brandon P. Jones

Louisiana

New 5th Circuit Test for Applying Maritime Law to Offshore Oil and Gas Contracts

In In Re Larry Doiron Inc., the U.S. 5th Circuit Court of Appeal issued a new test for determining whether an offshore oil and gas contract is controlled by maritime law. This new test replaces the long-held Davis factors. The Davis factors, which persisted for 27 years, required the courts to weigh six highly detailed conditions, and frequently resulted in unpredictable outcomes. The new test asks whether the contract involves performing oil and gas operations on navigable water and, if so, does the contract provide, or do the parties expect, that a vessel will play a substantial role in the completion of the contract? This new test will have significant impacts on offshore oil and gas indemnity agreements. Parties to these contracts will benefit from the greater clarity this test provides.—From CLM Members Mark Clark and Jeff Bridger

Maryland

Georgia Law Applies in Lead-Based Paint Case

Although Maryland has embraced a series of laws to eradicate lead-based paint in older homes, would laws protecting children from the effects of lead poisoning override an out-of-state insurer’s pollution exclusion? Asked in Brownlee v. Liberty Mutual Fire Ins. Co. whether such an exclusion in a policy issued in Georgia would preclude coverage in Maryland, the state’s highest court applied Georgia law to enforce the exclusion. The Maryland Court of Appeals determined that applying Georgia’s interpretation of the pollution exclusion clause does not violate Maryland public policy concerning the protection of victims of childhood lead-based paint poisoning.—From CLM Member Irwin R. Kramer

 



Phil Gusman is managing editor of CLM magazine, a publication of the CLM. He can be reached at phil.gusman@theclm.org.

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