Around the Nation: March 2015

CALIFORNIA: Defeating Non-Personal Injury Default Judgments After Set-Aside Expiration

All too often, as in Stein v. York, attorneys file non-personal injury complaints that seek “damages according to proof” at trial and do not specify the dollar amount of damages at issue. Thereafter, a default judgment for a specific sum of money is entered because the defendant did not file a timely response. The holder of the default judgment then waits six months and begins judgment enforcement via wage garnishment, bank account levy, real property lien, etc. The six-month wait before commencing judgment enforcement is deliberate because a defendant can only set aside a default within six months of entry of the default as per California Code of Civil Procedure Section 473(b). After that time frame has elapsed, the common perception is that the default judgment cannot be set aside unless there is a defect in the service of process, but that is incorrect. Code of Civil Procedure Section 580(a) states that the “relief granted to the plaintiff, if there is no answer, cannot exceed that demanded in the complaint…” Where no specific amount of damages is demanded in a complaint, there is no adequate notice to a defendant, and a default judgment entered under those conditions is void. Where a judgment is void, it must be vacated, even if more than six months has elapsed since its entry.—From Orange County Chapter Member Robert A. von Esch

DELAWARE: Application of Primary Assumption of Risk in Staircase Fall Reversed

The Delaware Supreme Court, in Helm v. 206 Massachusetts Ave. LLC, reversed summary judgment entered by the lower court for defendants in a personal injury action because the Superior Court erroneously applied both the doctrine of primary assumption of risk and the doctrine of comparative negligence (10 Del.C. § 8132). Primary assumption of risk, an express assumption of risk, did not apply to the facts in the case. The plaintiff’s decision to descend a dark stairway constituted secondary assumption of risk, but the percentage of the plaintiff’s negligence was for the jury, not the Superior Court, to decide.—From CLM Member Paul A. Bradley

INDIANA: Bad Faith Claims Can Be Maintained Absent Policy Coverage 

An insurer has a legal duty to deal in good faith with its insureds, and in Indiana, the courts recognize claims for bad faith against insurance companies. Historically, plaintiffs are required to show two things to support bad faith: (1) ill will by the insurer and (2) that the insurance coverage was denied wrongfully. However, in Klepper v. ACE American Insurance Company, the Indiana Court of Appeals held that bad faith claims may proceed in the absence of coverage and where the insurer funded the insured’s defense. The Indiana Supreme Court denied transfer, thereby confirming the Indiana appellate court’s decision.—From CLM Member Cari Sheehan

MISSOURI: Law Does Not Require Stacking of Auto Liability Policies

In Dutton v. American Family, the Missouri Supreme Court reversed a Western District Court of Appeals opinion that had construed an American Family policy and the Missouri Vehicle Financial Responsibility Law (MVFRL) to allow stacking of liability coverage up to the $25,000 statutory minimum. Following the Western District opinion, plaintiff’s attorneys were commonly demanding the $25,000 minimum for every insured vehicle owned by a defendant—in addition to the limits of the policy covering the vehicle involved in the accident.

The Missouri Supreme Court affirmed the trial court’s decision that only the policy for the vehicle involved in the accident applied. While the American Family policy provided coverage for use of other vehicles, there was an exclusion for vehicles owned by the insured but not insured by that particular policy. The Supreme Court held that the exclusion was not in violation of the MVFRL, nor could the policy provisions be read in isolation to try to create ambiguity. The court distinguished two prior opinions in which the individuals involved did not own the vehicle at issue.—From CLM Member Jeff Brinker

OHIO: Definition of “Medical Claim” Modified to Include Long-Term Care Facilities

Under Ohio law (R.C. 2305.113), a personal injury action involving a medical claim must be filed within one year of the accrual date of the cause of action. Effective March 23, 2015, Ohio’s definition of “medical claim” will include claims “that arise out of skilled nursing care or personal care services provided in a home pursuant to the plan of care, medical diagnosis, or treatment.” The addition of terms of art related to the long-term care industry in the definition of a medical claim clarifies the applicable statute of limitations for plaintiffs seeking to recover for injuries incurred in the long-term care setting.—From Northeast Ohio Chapter Member Holly Marie Wilson

OREGON: Enforcement of Ski Pass Agreement Unconscionable

A skilled snowboarder was paralyzed on an expert jump in Mount Bachelor’s terrain park, which included jumps, rails, and other manmade objects. In Bagley v. Mount Bachelor Inc., the Oregon Supreme Court held that a ski resort’s anticipatory release in its ski pass agreement was procedurally and substantively unconscionable as to the resort’s own negligence because the resort had substantially greater bargaining power in that the release was offered on a “take-it-or-leave-it” basis. Additionally, the limited number of area ski resorts use similar releases, further enhancing the disparity. As to substantive unconscionability, the court reasoned that, despite skier responsibility statutes, which identify the natural risks of skiing, the ski pass agreement violated public policy because it released the resort from not only those risks, but also from its own negligence, e.g., design, construction, and maintenance of the jump.—From CLM Member Jack Levy

TENNESSEE: Offer of Judgment Cannot Be Revoked

Can an offer of judgment be rescinded during the time period allowed under Tennessee Rules of Civil Procedure Rule 68? In McGinnis v. Cox, the Tennessee Court of Appeals answered this question as a matter of first impression. The court adopted the general federal court position that an offer of judgment cannot be rescinded during the period allowed under Rule 68. In this case, the plaintiff made an offer of judgment for the policy limits but later that day formally withdrew the offer by pleading. On the same day, but after the withdrawal, the defendant notified of acceptance. The Court of Appeals, following “nearly unanimous” federal court case law and the majority of state court opinions on the issue, held that absent fraud or other good cause an offer of judgment is not subject to revocation prior to the period allowed by Rule 68.—From CLM Member Jimmy Wright