OREGON
Policy Limit Misunderstanding
In Emerson v. Kusano, an insurer made an offer of settlement at an amount equivalent to its policy limits, thought to be $50,000. After the offer was accepted, the insured discovered that the policy limits were not as the insurer had understood and represented them to be but rather were significantly more at $100,000. The court held that it would not reform a settlement agreement when an insurer mistakenly offers policy limits, unless there is evidence that the parties had a specific agreement to settle for actual policy limits compared to a specific dollar amount.—From Jack Levy, Oregon State Chapter
MISSOURI
Medical Malpractice Cap Changes
House Bill 1173 and Senate Bill 589 have been introduced in the Missouri House and Senate to reverse the Missouri Supreme Court’s 2013 holding that the $350,000 noneconomic damage medical malpractice cap is unconstitutional in common law cases for violating the right to a trial by jury. The cap theoretically still applies to wrongful death medical malpractice claims because wrongful death is a statutory cause of action in Missouri. The Missouri Supreme Court has held in other cases that damage caps are enforceable in statutory causes of action. The bills would establish a statutory cause of action for medical malpractice instead of a common law action.
Missouri House Joint Resolution 45 proposes a constitutional amendment to allow the legislature to set noneconomic damage caps. If the resolution passes, the proposed constitutional amendment would be placed on a ballot and require passage by a majority of the public vote.—From Jeff Brinker, Missouri State Chapter
MISSISSIPPI
Supreme Court Addresses Compulsory Insurance Law
In Lyons v. Direct General Insurance Company of Mississippi, the Mississippi Supreme Court on writ of certiorari affirmed the Court of Appeal’s decision reversing the trial court and remanding this auto accident case for further proceedings. The significance of the case is that the Supreme Court addressed, for the first time comprehensively, Mississippi’s compulsory insurance law, §63-15-4(2)(a) of the Mississippi Code, adopted in 2013. The Supreme Court held that the insurer’s attempt in this case to exclude liability coverage for a “named driver” was void and in violation of the statute’s absolute requirement that every motor vehicle operated in the state be provided with liability limits of at least $25,000 per person/$50,000 per occurrence/$25,000 property damage. The ruling stated, “A liability policy that purports to exclude that coverage for certain drivers fails to comply with the statutory mandate.” The Supreme Court did note that its decision would not invalidate exclusions as to coverage limits in excess of the mandated statutory minimum, which the parties are still free to contract.—From Tim Crawley, Mississippi State Chapter
MAINE
Public’s Right to Use Beach Vacated
In Almeder v. Town of Kennebunkport, another battle in the long-running war over public rights to the intertidal (wet sand) zone of Maine’s ocean beaches was won recently by beachfront property owners. Vacating the Superior Court decision, which awarded the public a recreational easement over the beach, the Supreme Judicial Court held that the doctrine of “easement by custom” is dead and that the doctrine of “easement by prescription” did not apply because the claimants failed to produce evidence to overcome the presumption that public recreational uses are undertaken with the landowner’s permission.—From John S. Whitman, Maine State Chapter
TENNESSEE
Question of Duty When Intoxicated Customer Causes Injury
In Cullum v. McCool and Walmart, the plaintiff sued claiming that Walmart had a duty of reasonable care to prevent harm from an intoxicated customer. When a customer was turned away from the pharmacy for being intoxicated, she became angry and was told by an employee to leave the store. The customer got into her car and proceeded to strike and injure another customer in the parking lot. Walmart argued that it had no duty or ability to control or restrain the intoxicated customer. The Tennessee Supreme Court affirms the denial of summary judgment holding that the risk of injury by an intoxicated customer creates a foreseeable duty. However, this may not be the final word. A bill, S.B. 1696, was introduced in the Tennessee Legislature to overrule the opinion legislatively.—From Jim Wright, Tennessee State Chapter
CONNECTICUT
Volunteer Firefighters, the IRS, and ACA Employer Mandate
In the U.S., 87 percent of fire departments are made up mostly or entirely of volunteers. This statistic holds true in Connecticut. For today’s cash-strapped municipalities, these volunteers represent a major cost savings. The Affordable Care Act, however, mandates that employers (including municipalities) with more than 50 full-time employees must provide health insurance. Not a problem for volunteers, right? Not so fast. Previous regulations from the IRS classified volunteer firefighters as full-time employees for tax purposes. However, final regulations released by the IRS have exempted volunteer firefighters and emergency first responders from being counted as full-time employees, and, thus, they are not required to be provided with costly health insurance. Municipalities across the state can continue to provide services without having to increase taxes.—From Michel Bayonne, Connecticut State Chapter
NEW JERSEY
Lie Found Not to Interrupt Coverage
In an insurance coverage dispute, DeMarco v. Stoddard, choice-of-law analysis required that New Jersey law apply to a medical malpractice policy issued in Rhode Island for a doctor who falsely stated in his application for insurance that a majority of his practice was conducted in Rhode Island. The underlying claim of malpractice took place in New Jersey and involved a New Jersey resident. The doctor’s policy covered his out-of-state practice. The Appellate Division found that the same analysis and reasoning applied in cases related to compulsory auto insurance, leading to the conclusion that the insurance carrier’s remedy of rescission in this case was limited. The minimum compulsory amount of malpractice insurance remained available for the benefit of an innocent patient who suffered injuries when the policy was in effect.—From Karen Painter Randall, New Jersey State Chapter