3/28/2018

National News: March 2018

News and verdicts that affect you from across the country

By Phil Gusman

Minnesota reaches a settlement with 3M over PFC environmental litigation, Maryland will adopt the Uniform Bar Exam, and the Texas Department of Insurance releases data on Hurricane Harvey claims and losses.

Oregon

Plaintiff’s Case Does Not Amount to Claim

In Bates v. Bankers Life and Casualty Company, the Oregon Supreme Court addressed the certified question involving ORS 124.110(1)(b), which concerns financial abuse of vulnerable persons. The certified question was, “Does a plaintiff state a claim under Oregon Revised Statutes 124.110(1)(b) for wrongful withholding of money or property where it is alleged that an insurance company has in bad faith delayed the processing of claims and refused to pay benefits owed under an insurance contract?” The plaintiffs were elderly persons who had purchased long-term care insurance policies from the defendant insurance company. The plaintiffs claimed that the insurer developed onerous procedures to delay and deny insurance claims. The court held that plaintiffs had failed to state a claim under the statute. The court reasoned that Section (1)(b) of the statute applies where a vulnerable person entrusts her money or property to another who, in bad faith, refuses to return it Here, plaintiffs were not seeking the return of the money that they had transferred to the insurer, but rather were seeking contractual benefits.—From CLM Member Geoff Bedell

California

Limitations on Securing Settlement Payments

In Viatech International Inc. v. Sporn plaintiff sued for $166,000 and settled for a one-time payment of $75,000. The parties agreed upon a stipulated judgment—in the sum of $300,000 consisting of damages, interest, attorney’s fees, and costs—to be filed if defendants failed to pay, which is exactly what happened. Over objection from the defendants that this amount was an unenforceable penalty and liquidated damage, the trial court entered judgment. The appellate court reversed and entered a new judgment for $75,000, the settlement amount, plus trial court costs. The court found a stipulated judgment that is four times the settlement amount was an unenforceable penalty. The court made clear the amount of the stipulated judgment must look to the damages caused by the breach of the payment plan, not the damages from the original complaint. In light of Viatech, a release agreement and a stipulated judgment used to secure a settlement payment plan should be carefully crafted to ensure that a stipulated judgment can be properly enforced.—From CLM Member Dennis B. Kass

Minnesota

$850 Million Settlement of PFC Litigation Finalized

3M and Minnesota Attorney General Lori Swanson announced an $850 million settlement to resolve the state’s $5 billion lawsuit against 3M concerning the company’s disposal of perfluorinated chemicals (PFCs). The state contended that 3M dumped millions of pounds of waste from its PFC manufacturing process into the ground and water system from the 1950s to early 2000s; that 3M knew its disposal practices would likely pollute groundwater; and that 3M had long understood the potential risks of PFCs to harm human health and the environment. 3M, meanwhile, maintains that it does not believe there is a PFC-related public health issue. A Minnesota Department of Health study released in February did not find unusual rates of some health implications mentioned in the lawsuit, which news reports say prompted 3M lawyers to ask for a delay in the scheduled trial. That delay was granted, and the trial was scheduled for Feb. 20—the day the settlement was announced. The lawsuit, State of Minnesota v. 3M was initiated in 2010 in Hennepin County District Court.—From Managing Editor Phil Gusman

Texas

TDI Briefs State Senate Committee on Harvey Data Call Results

So far, Hurricane Harvey has generated around 670,000 claims and insurers have made $4.5 billion in claims payments, the Texas Department of Insurance (TDI) says. Insurers in the state estimate that they will ultimately pay $15.7 billion in Harvey claims. The TDI reported these figures to the Texas Senate Business and Commerce Committee on Jan. 23. The figures come from a TDI data call issued in late September, and TDI notes numbers will change as more claims are reported and closed. TDI says the claims totals include 354,000 residential property claims; around 203,000 auto claims; 37,000 commercial property claims; and 66,000 flood insurance claims. By way of comparison, over a similar time period, TDI says 2008’s Hurricane Ike generated around 730,000 claims, with insurers paying out around $3.2 billion. However, the 2008 figures over that time period do not include claims or loss payments for federal flood insurance.—From Managing Editor Phil Gusman

Ohio

Pollution Exclusions and Localized Contaminations

In GrafTech Int’l Ltd. v. Pacific Employers Ins. Co., 84 Alcoa employees sued GrafTech, claiming that they suffered injuries from exposure to the toxic coal-tar pitch contained in the insured’s product. GrafTech demanded coverage and a defense against the claims. The trial court upheld Pacific’s denial of coverage under an exclusion barring coverage for “any injury…arising out of or in any way related to pollution.” Notably, the policy defined “pollution” to include the “introduction into the environment of any substance,” while further defining the term “environment” to include “any structure or the air therein.” GrafTech argued on appeal that the exclusion applies only to contamination of the environment, not to personal injury lawsuits alleging exposure within a manufacturing plant. In rejecting this contention, however, the appellate court construed both of the defined terms according to their plain meanings and held that there is nothing in the phrase “structure or air therein” to suggest that the exclusion is inapplicable to localized releases of pollutants within a structure.—From Northeast Ohio Chapter Vice President Michael C. Brink

Maryland

Advisory Committee Votes in Favor of UBE

Beginning in 2019, law students and lawyers seeking admission to the Maryland Bar will now sit for the Uniform Bar Exam (UBE). The Maryland Court of Appeals advisory committee voted 11-1 on Nov. 20, 2017, to endorse the adoption of the UBE. The UBE, which is drafted by the National Conference of Bar Examiners rather than drafted at the individual state level, has already been adopted by 27 other states along with Washington, D.C. and the Virgin Islands. The benefit is that within a three-year period of sitting for the UBE, candidates who pass the exam may transfer their scores to any participating jurisdiction and apply for admission in that state. Starting in 2019, the exam’s structure will remain similar to the exam already utilized. The most notable difference is that the UBE will shift the essay portion of the exam from state-specific essays to the Multistate Essay Examination, which is comprised of non-state-specific essay questions.—From CLM Members Marissa A. Trasatti and Lauren S. Ellison

 



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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