Around the Nation: May 2015

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

By Bevrlee J. Lips

CALIFORNIA: SB 800 Claims Dismissed Against Developer Following Aggressive Defense

The owners of 203 homes in Bakersfield, Calif., brought a construction defect lawsuit against a developer. The developer made repairs under SB 800, forced written discovery, and took the homeowners’ depositions, which resulted in nearly 70 homes dropping from the lawsuit. When the lawyers for the homeowners struggled in raising settlement monies from the subcontractors, they amended the complaint to include common law claims in the wake of Liberty Mutual v. Brookfield. In a strategic move, the developer then made Code of Civil Procedure Section 998 offers to each homeowner in the amount of $4,000; none accepted. Section 998 provides a statutory mechanism that allows for an offer. If the offer is not accepted within a specified time period and the offeree does better at trial, the offeree is entitled to recover its costs and expert fees (all of which are not normally recoverable). As the trial approached, the homeowners began settling with subcontractors and providing scope of work releases that included a release of the developer. Having failed to raise more than $4,000 from the subcontractors, the homeowners were forced to dismiss the developer for a waiver of costs two days into trial.—From Nevada Chapter Member Nathan Owens, Esq.

KENTUCKY: Containing Solicitation of Accident Victims to Reduce Fraud

The Kentucky General Assembly has revisited the solicitation of accident victims for health care services in an effort to stem fraud in automobile injury actions. Although a prior attempt was held unconstitutional by a federal district court, HB 153 was signed into law by the governor in March 2015. As rewritten, the statute prohibits solicitation by a health care provider or an intermediary acting on behalf of a provider for the first 30 days following an automobile accident. It prohibits paying or receiving money for a referral and requires health care providers to report any violations that come to their attention. The statute voids any charges for care given to a person solicited illegally and permits recovery by the payer of any sums paid for care of a solicited person. This doesn’t solve the entire problem, but it is a step in the right direction.—From Kentucky Chapter President Ronald Green

NEVADA: No Dice in Third-Party Retaliatory Discharge Claim

In Brown v. Eddie World Inc., the Nevada Supreme Court addressed whether a plaintiff could state a claim for third-party retaliatory discharge when that discharge discourages reporting violations of Nevada’s gaming laws. The plaintiff in the case, Karen Brown, was an employee of Eddie World Inc. Eddie World was located on property owned by the Stagecoach Hotel and Casino. Both companies were under common ownership (collectively, Stagecoach). Stagecoach knew the employee was engaged to Donald Allen. Allen was not employed by Stagecoach but filed a complaint with the Nevada Gaming Control Board (NGCB) against Stagecoach regarding some of its slot machines. Shortly after the NGCB informed Stagecoach of Allen’s complaint, it began assigning Brown’s duties to other employees, and within weeks, she was terminated. The Supreme Court recognized that enforcing gaming laws is fundamental public policy in Nevada; however, it declined to recognize a cause of action for third-party retaliatory discharge.—From Nevada Chapter Vice President Gina M. Mushmeche, Esq.

OHIO/U.S.: Family and Medical Leave Act Changes

In February 2015, the U.S. Department of Labor issued a news release announcing a rule change to the Family and Medical Leave Act (FMLA) in keeping with the U.S. Supreme Court’s decision in United States vs. Windsor. In noting that state responsibilities for the definition and regulation of marriage date back to the nation’s beginning, the Supreme Court cited Ohio ex rel. Popovici v. Agler, which stated, “[W]hen the Constitution was adopted, the common understanding was that the domestic relations of husband and wife and parent and child were matters reserved to the states.” Consequently, workers in legal, same-sex marriages, regardless of where they live, will now have the same rights as those in opposite-sex marriages for leave under FMLA. Hence, the FMLA definition of “spouse” now includes an eligible employee in a legal same-sex marriage. Under this rule, eligibility for federal FMLA protection is based on the law of the place where the marriage was entered into, not where the employee resides.—From CLM Member Felix J. Gora

OREGON: Travel Expenses Not Part of PIP Coverage

The Oregon Court of Appeals recently held that insurers are not required to pay personal injury protection (PIP) claimants for costs related to travel to and from medical treatments. While Oregon’s PIP statute, ORS 742.524(1)(a), requires insurers to pay for “expenses of medical…services,” the statute does not encompass costs for personal travel related to medical visits. The court reasoned that the legislature intended for PIP to cover only those services provided by licensed medical providers—which clearly does not include travel. Even though travel is a necessary expense of receiving medical treatment, it is not covered by PIP.—From CLM Member Jack Levy

TENNESSEE: No Job Protection for Whistleblowing to the Wrong Person

In Haynes v. Formac Stables Inc., the plaintiff, a horse groomer, was kicked in the head by a horse and asked for medical treatment for his injury. He claimed that the defendant’s owner refused and offered a veterinarian instead, which violates Tennessee code. The plaintiff protested this with the owner and, after treatment, complained about headaches “due to not being seen by an appropriate medical examiner.” The plaintiff would not be silent about what he perceived to be illegal activity—treatment by an animal doctor for a human injury—and was terminated. He then asserted a claim alleging retaliatory discharge for “whistleblowing” under both the common law and Tennessee Public Protection Act. The Tennessee Supreme Court held that a “whistleblower” complaint must be reported to someone other than the wrongdoer in order to qualify as a valid claim.—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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