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Around the Nation: April 2016

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

April 28, 2016 Photo


Use of the Safe Harbor Letter

In Oregon, when an insured prevails in a claim against its insurer, the insurer may be responsible for paying attorney’s fees under ORS 742.061. In cases involving personal injury protection benefits and underinsured or uninsured motorist (UIM) claims, an insurer can preclude attorney’s fees by sending a “safe harbor letter” within six months after proof of loss that accepts coverage, agrees to binding arbitration, and stipulates that the only issues remaining are liability and damages to the insured. In Kiryuta v. Country Preferred Ins. Co., a first-party UIM case, the Oregon Court of Appeals upheld an award of attorney’s fees against an insurer that had sent a timely safe harbor letter because it asserted affirmative defenses of “offset” and “contractual compliance” that effectively contested coverage. The court held that, even though the insurer did not argue those defenses, pleading defenses that disputed coverage voided the protection of the safe harbor letter.—From CLM Member Jack Levy


The State of Professional Engineering

In The State of Nevada Dept. of Transportation v. 8th JDC, et al., the Nevada Supreme Court was asked to consider whether a complaint alleging professional negligence in an action filed against the State of Nevada Department of Transportation (NDOT) required an attorney affidavit and an expert report pursuant to NRS 11.258. Jorgenson & Koka LLP (J&K), an urgent care facility, filed suit against NDOT, the City of Henderson, PWREO Eastern, and St. Rose LLC (collectively, PWREO) alleging that water entered their leased premises on two different occasions. They asserted a claim of negligence against NDOT for failing to properly design, construct, maintain and repair a state highway located adjacent to J&K’s premises. NDOT asserted that it was a design professional pursuant to NRS 11.2565(1)(a) and filed a motion to dismiss for failure to comply with NRS 11.256-11.259. The district court denied NDOT’s motion, finding that it was not “primarily engaged in the practice of professional engineering” and was not subject to the mandatory filing requirements. The Nevada Supreme Court agreed with the district court and concluded that NDOT is not a design professional as envisioned by NRS 11.2565(1)(a), making the requirements of NRS 11.258 inapplicable to NDOT. It, therefore, denied the petition.—From Nevada Chapter Vice President Gina M. Mushmeche, Esq.


Are Pre-Employment Injuries Covered?

In Hamilton v. Kenco Logistics Services LLC, a prospective employee was injured while undergoing a pre-employment physical. Is this a covered injury under workers’ compensation law? The new Tennessee Workers’ Compensation Appeals Board said “no” in a decision filed in March 2016. The court relied on several factors, including the fact that the physical was for prospective employment. The court also noted that other states, notably Maryland and Texas, would hold in favor of the employee.—From CLM Member James C. Wright


False Statements Against Candidates

Election years inevitably spawn election-based litigation. In Susan B. Anthony List v. Driehaus, the U.S. Court of Appeals for the 6th Circuit struck down Ohio’s political false statements laws (ORC 3517.21) as violating the First and Fourteenth Amendments. The statute prohibits knowingly or recklessly making false statements with the intent of impacting the outcome of an election. While the statute identified certain types of false statements to be prohibited, such as statements regarding a candidate’s criminal record or voting record, it also broadly prohibited any “false statement concerning a candidate…designed to promote the election, nomination, or defeat of the candidate.” The appellate court found the law both was over inclusive substantively and failed to offer adequate procedural safeguards. In particular, the court found that the law failed to guarantee that complaints would reach final resolution before an election and lacked a procedure to address frivolous complaints.—From Northeast Ohio Chapter Member Holly Marie Wilson, Esq.


Contractual Indemnification and the Duty to Defend

A recent Maryland case clarified an insurer’s duty to defend contractors as “additional insureds” in liability policies. In James G. Davis Construction Corporation v. Erie Insurance Exchange, a subcontractor’s liability carrier agreed to cover the prime contractor for damages arising out of either the contractor’s or subcontractor’s negligence in connection with a construction project. Although the claims against the contractor were not based solely on vicarious liability, the Maryland Court of Special Appeals required the insurer to defend the contractor in tort litigation. As long as the contractor was alleged to be liable, in whole or in part, by the acts or omissions of the subcontractor, the carrier had a duty to defend this additional insured regardless of whether the liability arises under the doctrine of respondeat superior.—From Maryland Chapter President Irwin R. Kramer, Esq.


The Child Sexual Abuse Act

The New Jersey Appellate Division recently addressed claims brought by a plaintiff alleging sexual abuse while she a was minor against the defendant band director and high school under the Child Sexual Abuse Act (CSAA) and the Tort Claims Act. Though the complaint pointed to repeated sexual abuse in the plaintiff’s home, the court affirmed the lower court’s decision, finding that defendants were not liable “passive abusers” under the CSAA because they were neither “within the household” nor “standing in loco parentis.” The court drew a contrast to a defendant boarding school that exerted parental-like control over the child and satisfied the CSAA.—From Chapter Region Three Co-Chair Karen Painter Randall

About The Authors
Bevrlee J. Lips

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

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