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Around the Nation: March 2013

News from CLM committees, members, and state chairs.

March 22, 2013 Photo


Separate Legal Issues

In Purdy v. Deere and Company, a young child was injured severely when a riding lawnmower driven by her father backed over her. The accident resulted in the amputation of one of her legs. The Court of Appeals of the State of Oregon decided that, when on appeal from a jury verdict, an appellant has the burden to identify something in the record to demonstrate that the jury did, in fact, base its verdict on an erroneous argument or trial court ruling, thereby showing that the error was harmful. Problems can occur when one question to the jury combines separate legal issues.—From Oregon State Co-Chair Jack Levy



Express or Implied Consent

In Corder v. Folds, the plaintiff was injured in his neighbor’s backyard while returning a borrowed propane tank. He later filed suit under the premises liability act, section 13-21-115, C.R.S. The trial court determined that the plaintiff was a “trespasser” under the statute because the landowner had not expressly consented to his entry into the backyard. Summary judgment was entered in the landowner’s favor because the plaintiff had not been willfully or deliberately injured. However, the Colorado Court of Appeals held, as a matter of first impression, the term “consent” to include both express and implied consent. Because there was evidence that the neighbor may have implied consent to enter the plaintiff’s backyard, the court reversed the summary judgment and remanded the case.—From Colorado State Chapter Member Brent D. Quist



Override of the Public Duty Doctrine

While playing at the Riverside Park in Miles City, Tiffany Gatlin’s eight-year-old daughter fell from a slide and suffered a serious head injury. In Gatlin-Johnson v. City of Miles City, the Montana Supreme Court held that the public duty doctrine did not apply to a playground claim against a city. The court reasoned that the doctrine only applies if the public entity owes a duty to the public at large, such as a duty to provide law enforcement services or regulate the practice of medicine. The doctrine does not apply where the government’s duty is defined by other generally applicable principles of law.—From Montana State Lead Chair James C. Cumming



Mandatory New Rules Affecting Cases $100K or Less

Effective March 1, 2013, Texas is implementing new Rules of Civil Procedure. All original pleadings must now include a statement of damages sought. In those cases where the aggregate monetary relief is $100,000 or less, the lawsuit will be subject to the mandatory expedited process of Rule 169. Pursuant to the new rules, discovery will be severely limited, and each “side” will be allowed only five hours to try a case. In addition, objections to expert testimony are limited, and the trial court no longer can order the parties to mediate. These new rules will apply retroactively to pending cases, but do not affect cases governed by the Family Code, Property Code, Tax Code, or Chapter 74.—From Texas State Co-Chair Nichol Bunn



Exclusions Preclude Coverage for Chinese Drywall

In response to certified questions for the 4th Circuit, the Supreme Court of Virginia recently determined that four common exclusions found in a typical homeowners’ policy unambiguously preclude coverage for so-called Chinese drywall claims. In TravCo Insurance Co. v. Larry Ward, the court held that the (1) “latent defect”; (2) “faulty, inadequate or defective materials”; (3) “rust or corrosion”; and (4) “limited pollution” exclusions all preclude coverage for damages resulting from the “off-gassing” of sulfide gases and other chemicals from drywall boards used in construction projects. The court held that the exclusionary language in the policy was clear, and, given the “usual, ordinary, and popular meaning” of the terms, the exclusions should be enforced.

With respect to the analysis of the pollution exclusion, the court found that sulfuric gases were unquestionably “gaseous” as well as an “irritant” and “contaminant,” which were essential parts of the definition of a pollutant. Moreover, the court noted that sulfur gas was considered a pollutant per relevant state and federal guidelines. Finally, the court noted that it was undisputed that the gases were dispersed into the environment from the drywall boards. Therefore, all the requisite components of the exclusion were satisfied.

This decision buttresses the long line of cases from Virginia’s highest court, which determined that, when policy exclusions are clear and unambiguous based on the “usual, ordinary and popular meaning” of the relevant terms, the court will endeavor to enforce them.—From Virginia State Co-Chair Robert E. Rider, Jr.



Punitive Damages for Malpractice

Kentucky has changed its threshold for recovery of damages in emotional distress lawsuits. In Osborne v. Keeney, the Supreme Court of Kentucky abandoned the traditional physical impact rule. The court, instead, set forth a two-pronged test. An emotional-distress plaintiff must now: (1) “satisfy the elements of a general negligence claim,” and (2) show “by expert or scientific proof that the claimed emotional injury is severe or serious.”

At first glance, the new standard seems to allow plaintiffs to bring lawsuits not previously recognized under Kentucky law; plaintiffs no longer must suffer physical contact or injury to assert a claim for emotional distress. However, the new standard may bar more suits than it previously allowed. The second prong of the analysis requires a heightened showing of expert or scientific proof of the alleged emotional injury. This will, theoretically, flush out “weaker” claims, as potential plaintiffs will presumably have to expend more money and effort up front to validate their emotional injuries.

The effects of Osborne remain to be seen. The court is not blind to the fact that “[c]riticism of this rule is to be expected.” However, it also asserted that the new rule “will be even more predictable” than the bright line, but perhaps outdated, impact rule. For now, at least, it seems that insurers can be hopeful for a more defense-oriented approach to lawsuits involving emotional distress.—From Colorado State Co-Chair Donald L. Miller II



A Slapp in the Ballot Box

Like 25 other states, Maine has an anti-SLAPP (Strategic Lawsuits Against Public Participation) statute designed to protect citizens from being sued for exercising their constitutional rights to petition government, such as opposing a local development project. Such suits are intended to intimidate, exhaust, and impoverish the project’s opponents, and they often achieve that end.

The anti-SLAPP statutes allow the target of such a suit to file an expedited special motion to dismiss on constitutional grounds. “Petitioning” is defined very broadly in the Maine statute, and, as a result, has been employed in a variety of contexts far afield from the paradigm for which it was enacted. Indeed, sometimes both parties are able to avail themselves of the statute’s protection.

In the 2004 presidential campaign, the Maine Democratic Party and the Democratic National Committee filed complaints challenging Ralph Nader’s nomination papers for the alleged purpose of distracting his campaign and draining its resources. In Nader v. Maine Democratic Party, Nader sued, and the defendants filed an anti-SLAPP motion, which was granted by the superior court because their tactics had constituted petitioning activity. The Maine Supreme Judicial Court later reversed, pointing out that the case implicated Nader’s right to petition the courts and the fundamental right of voters to cast their votes effectively.—From Maine Chapter Member John S. Whitman

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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