Around the Nation: December 2014

State news and updates from CLM chapters, reps, and committees.

By Bevrlee J. Lips

CALIFORNIA: Employee Error Corrected in Duty to Defend

In North Counties Engineering Inc. v. State Farm General Insurance Co., the court held that statements and notes made by an insurer’s employee are evidence that an insurer has a duty to defend. In 1991, State Farm General Insurance Company insured North Counties Engineering Inc.’s (NCE) completed and ongoing operations. From 2000, State Farm insured NCE’s ongoing operations. NCE constructed a dam and, after construction, was sued because allegedly the dam was causing damage downstream. State Farm denied NCE’s tender, claiming that its policies excluded completed operations coverage because the date of loss was erroneously entered as May 2004, the date of NCE’s tender. Eventually, State Farm employees admitted this error. The policies issued before May 2004 covered NCE’s completed operations, and State Farm had a duty to defend NCE.—From CLM Member Graham C. Mills terial fact as to whether the social host had control over the alcohol supply to warrant liability.—From CLM Member Jack Levy

CONNECTICUT: Vicarious Legal Liability with Doctrine of Nondelegable Duty

In a recent case tried in the Superior Court of Connecticut, the judge held that the doctrine of nondelegable duty can affix liability, thus sidestepping the debate over whether apparent agency can be used in the medical malpractice context. The decision in Noel v. Lawrence & Memorial Hospital holds that hospitals have a nondelegable duty to staff their emergency departments and, therefore, are vicariously liable for any damages caused by emergency room physicians who breach the standard of care. It is highly doubtful that defendants and insurance companies interested in these topics have heard the last of this issue in the medical professional liability arena. This raises many questions: Will hospitals seek to have more stringent standards in credentialing physicians? Will hospitals insist that attending physicians maintain greater coverage limits than the standard $1 million coverage? Will hospitals and corporate entities insist on indemnity arrangements?—From Connecticut State Chapter Member Richard Tynan

NEW HAMPSHIRE: Court Says Honda Doesn’t Owe Fees in Dealer Row

In Autofair 1477 L.P. v. American Honda Motor Company Inc., Autofair Honda petitioned for attorney’s fees against American Honda Motor Co. Inc. (AHM) for fees incurred in a protest before the New Hampshire Motor Vehicle Industry Board. The protest related to proposed chargebacks by AHM for Autofair’s warranty claims. The board disallowed most proposed chargebacks, so Autofair petitioned for fees under RSA 357-C:12, arguing that the board had found that AHM implicitly violated New Hampshire’s Dealership Act. AHM argued that there was no violation where no claim was debited. After cross-motions for summary judgment, the court entered summary judgment in favor of AHM. Autofair appealed, and the New Hampshire Supreme Court affirmed, agreeing that, based on the statute in effect at the time of the protest, there was no violation where no actual chargeback occurred.—From CLM Member Michelle Byers

NEW JERSEY: AOM Requires Apples-to-Apples Experts

In Meehan v. Antonellis, the New Jersey Superior Court Appellate Division issued an amended opinion holding that using an expert in prosthodontics in a dental malpractice action against an orthodontist, though they shared an expertise in treating sleep apnea, lacked the requisite statutory qualifications to issue an affidavit of merit (AOM) against the defendant. In this dental malpractice case, the plaintiff appealed from an order dismissing his complaint against the defendant-orthodontist for failure to comply with New Jersey’s AOM statute and from an order denying the plaintiff’s motion for reconsideration. The plaintiff’s AOM affiant identified his dentist as holding a specialty certificate in prosthodontics with an expertise in the area of sleep apnea. However, the defendant was a practicing orthodontist and credentialed as such. The Superior Court held that the trial court judge correctly found that, notwithstanding the plaintiff’s argument, the defendant was acting as a dentist and performed his duties as an orthodontist, and, as such, the plaintiff failed to provide an AOM from an appropriate medical professional.—From Northern New Jersey Chapter President Karen P. Randall

OREGON: Did Host Have Control in Deadly Shooting?

Three friends got together to watch the NBA finals, but the night went terribly wrong. In Baker v. Croslin, the plaintiff filed a wrongful death action against a social host of the gathering alleging that he was negligent in serving a visibly intoxicated guest who then shot her husband, also a guest of the host. ORS 471.565 provides that a social host is not liable for harm caused by an intoxicated guest unless the plaintiff proves that the host served or provided alcohol to the guest while the person was visibly intoxicated. The record reflected that the source of the shooter’s final drink could have been from either the host’s home bar or from a bottle of rum that the host purchased for the decedent for which he was reimbursed. The Oregon Court of Appeals denied summary judgment and concluded that there remained a genuine issue of ma

WASHINGTON, D.C.: Case Holland Suit Against the EEOC Dismissed

The EEOC had been investigating and demanding documents from Case Holland for several years. Case Holland had produced thousands of pages of records in response to requests. Following this, Case Holland did not hear from the government for a significant period of time, until one morning as each employee turned on their computer the employee received an email from the EEOC advising that Case Holland was under investigation and the employee needed to fill out a questionnaire about potential discriminatory practices. The EEOC was trolling for plaintiffs apparently having failed to find anything in its extensive records review. In Case Holland v. EEOC, Case Holland filed a lawsuit against the EEOC in the U.S. District Court for the District of Columbia. However, the District Court dismissed the claim for failing to set forth a claim for damages.—From CLM Member Jimmy Wright

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

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