CLM National: December 2019

News and verdicts that affect you from across the country

By Phil Gusman

Ransomware attack hits Louisiana government systems, New York passes storm-chaser legislation, and, in New Jersey, the state supreme court will review whether an underage social host can be held civilly liable for facilitating underage drinking among guests.

West Virginia

Follow-Up Care Duty Examined

In Kruse v. Farid, the Supreme Court of Appeals of West Virginia upheld a circuit court’s summary judgment, finding that Dr. Farid did not have a duty to provide follow-up medical care to the plaintiff after she left the hospital against medical advice. Although the court did not address whether Dr. Farid breached the standard of care regarding his treatment of the plaintiff before she left, but with respect to treatment she allegedly was supposed to receive after she left the hospital, the court agreed that the act of signing out against medical advice, itself, signifies the termination of the physician-patient relationship, and, consequently, the physician no longer has a duty to provide medical care to the former patient.—From CLM Member Karen T. McElhinny


Ransomware Attack Disrupts State Systems

Gov. John Bel Edwards declared a state of emergency and activated ESF-17, the state’s cybersecurity response team, after the state government systems came under a ransomware attack. Edwards said in a statement that no ransom was paid. “While it is nearly impossible to prevent all cyberattacks, because we have prioritized improving Louisiana’s cybersecurity capabilities, we were able to quickly neutralize the threat,” said Jay Dardenne, commissioner of administration. Government services experienced widespread interruptions following the attack, but Dardenne said the majority of the interruption was due to “our aggressive actions to combat the attack.” Dardenne added that the state is confident it did not lose any data. News reports say the state was attacked by a variant of the Ryuk ransomware. A similar attack was carried out on Louisiana school districts during the summer. The state of emergency declaration allowed state agencies to take actions that included waiving fees and fines to assist members of the public.—From Managing Editor Phil Gusman


Legal Malpractice Action Denied

In Arch Ins. Co. v. Kubicki Draper LLP, Florida’s Fourth District Court of Appeal forecloses on an insurer’s ability to recover damages incurred as a result of the alleged negligent representation by a law firm it retained to defend its insured in a legal malpractice action. Arch Insurance Company alleged that Kubicki Draper LLP, the defense firm it retained to represent its insured in a civil action for accounting malpractice, committed malpractice by failing to raise the insured’s statute-of-limitations defense, thereby forcing the insurer to pay a larger settlement to resolve the underlying claim against the insured. The court ruled that the insurer lacked standing to sue defense counsel because the insurer was not in privity with defense counsel, and that none of the recognized exceptions to the strict privity requirement applied to the facts.—From CLM Member Julia Stephan


Court Rules Against Carrier Medical Exam Referrals

The Pennsylvania Supreme Court, in Sayles v. Allstate, found that provisions in automobile insurance policies allowing carriers to refer insureds to a medical exam to assess the validity of a first-party claim for medical benefits was void as against Pennsylvania law. The court accepted the plaintiffs’ argument that insurance policy terms requiring insureds to submit to exams at the request of the carrier irreconcilably conflicted with 75 Pa.C.S.A. Section 1796 of the Motor Vehicle Financial Responsibility Law. That law provides that, whenever a person’s medical condition is at issue in circumstances applicable to PIP claims and other identified matters, the court may order that person to attend a medical examination “upon motion for good cause shown.” The Pennsylvania Supreme Court rejected the current practice of PIP insurers compelling their insureds to attend PIP independent medical exams on the basis of policy provisions and ruled that insurers must instead file a petition with the court and demonstrate good cause.—From CLM Member Daniel E. Cummins

New Jersey

Supreme Court to Review Underage Social Host Decision

The Supreme Court of New Jersey has granted a petition of certification in the matter of Estate of Brandon Tyler Narleski v. Nicholas Gomes to review whether an adult, who is under the legal drinking age, owes injured parties a duty under the common law to desist from facilitating drinking by underage adults at his place of residence. The Appellate Division had held that a young adult under 21 can be civilly liable for facilitating the underage drinking of other young adults at his place of residence. If the Appellate Division’s holding is upheld by the New Jersey Supreme Court, it will create a new avenue of liability under the social host liability statute. The New Jersey Supreme Court will need to examine whether this “new law” is consistent with the legislative intent under the statute and not judicial overreach into the legislature’s jurisdiction.—From CLM Members Russ M. Patane and Hristo Zevilkaris

New York

Governor Signs Storm-Chaser Bill

Gov. Andrew Cuomo signed into law a bill imposing key consumer protections against storm-chasing contractors. The law was inspired by contractor scams that exploited distraught homeowners after Superstorm Sandy. According to the new law, written contracts are required for repair work (roof, gutter, downspout, and siding); contractors are forbidden from offering rebates or paying policy deductibles; and contractors must disclose their liability coverage and policy limits. The bill cleared the legislature on a strong bipartisan vote. Enactment comes after a multi-year effort by state and national groups, including the Coalition Against Insurance Fraud, New York Insurance Association, and National Roofing Contractors Association.—From CLM Fellow Jim Quiggle


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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