Around the Nation: November 2013

WASHINGTON

No Duty of Care Owed

In Stewart Title Guaranty Co. v. Sterling Savings Bank et al., the Washington Supreme Court held that a title insurer could not sue for malpractice against the law firm it retained to defend a policyholder. Though Stewart Title paid a law firm to defend its policyholder, Sterling Bank, against a real property lien priority claim that was successfully asserted by a construction company, the law firm’s only client was Sterling Bank. The law firm owed no duty of care to the insurer, which was neither a client nor the intended beneficiary of the law firm’s representation.—From Washington State Chapter Co-Chair Jacquelyn A. Beatty

OREGON

Noneconomic Damages Cap Unconstitutional

In Klutschkowski v. Peacehealth, an infant suffered injuries during child birth. The Oregon Supreme Court held that when a defendant’s negligence causes physical injury to a child during delivery, the noneconomic damages cap violates the Oregon Constitution. Article I, Sect. 17, guarantees the right to a jury trial in civil cases to which the right was customary in 1857—causes of action for medical malpractice predated the state constitution. Consequently, medical malpractice plaintiffs are entitled to a determination of all fact issues by a jury, including the issue of damages.—From Oregon State Chapter Co-Chair Jack Levy

COLORADO

Lay Opinion Testimony Allowed

The Colorado Court of Appeals decided Mullins v. Medical Lien Management Inc., holding that it is not an abuse of discretion for a trial court to allow lay opinion testimony about the reasonableness and necessity of the amount claimed as medical expenses. The court upheld the lay opinion testimony as admitted based on statewide “familiarity” with costs for medical procedures. “Simple comparison of prices and deductive reasoning,” based on daily review and comparison of medical bills qualified as lay opinion. Arguably, the reasonableness and necessity of medical bills may be challenged by testimony from any witness familiar with and regularly employed in comparing statewide medical expenses.—From Colorado State Chapter Member Mark Sares

OHIO

View on Collapse Clearly Defined

Thiemens v. Grange Mut. Cas. Co. involved a plaintiff whose building’s walls showed bowing and deterioration of the brick and mortar just prior to a partial collapse. The trial court granted summary judgment in favor of Grange on the appellant’s breach of contract claim because the undisputed facts showed that the collapse was not caused by unseen decay, and the policy plainly covered, “decay that is hidden from view, unless the presence of such damage is known to an insured prior to collapse.” The plaintiff contended that the policy did not specifically define the term “collapse,” and, therefore, “such term must be given its plain and ordinary meaning.” The Ohio Court of Appeals, Ashland County, affirmed judgment as a matter of law for the insurer.—From Ohio State Chapter Member Edward R. Goldman

NEW YORK

Little Red Book of Useful Stuff

Claims professionals and risk managers can become overwhelmed in their search for the most effective resources for doing their job. Each state’s laws, regulations, court systems, and practices can vary greatly. “The Little Red Book of Useful Stuff” was recently released to aid in cutting the mountain of available information down to a concise grouping of facts for properly adjusting claims.—From Eric Dolan, CLM Member Firm Trevett Cristo Salzer & Andolina

MASSACHUSETTS

Inflatable Pool Slide Case Award Not Excessive

In Aleo v. SLB Toys USA Inc., the plaintiff brought claims against the defendant alleging wrongful death, negligence, and breach of warranty in the death of his wife after she attempted to slide head first down an inflatable slide that was set up next to an in-ground swimming pool. The jury awarded $2.64 million in compensatory damages and $18 million in punitive damages. The defendant appealed. The Supreme Judicial Court carefully applied the factors established by the U.S. Supreme Court in BMW of N. America Inc. v. Gore and concluded that the punitive damages were not grossly excessive as to exceed constitutional bounds and affirmed the jury’s findings and award.—From Massachusetts State Chapter Co-Chair James Campbell

NEW JERSEY

Dueling Partners Blur Discretion Objection

In the appeal of the settlement entered for Kirsch v. Horizon Blue Cross Blue Shield of New Jersey, a class action challenging the defendant’s system for processing dentists’ claims for reimbursement of services, which ended in a settlement over the objections of two members of the class, the court affirmed the Law Division’s approval of the settlement, finding no abuse of discretion. Stating that the real issue in this appeal was a private dispute between two former law partners, now rivals, over the fees awarded, the court held that the Law Division erred in applying a multiplier to the lodestar, given the class counsel’s failure to identify a statutory fee-shifting provision that would serve as the basis for the award of a contingency enhancement. Further, although the panel did not approve the failure to provide hourly rates for lawyers during each year time was billed and endorsed the use of an alternative method of calculating the fee award as a sensible cross-check of the court’s initial fee calculation, it held that the fee awarded, minus the contingency enhancement, was within the trial court’s discretion.—From New Jersey State Chapter Co-Chair Karen Painter Randall

MARYLAND

Compensation Means Money, Not Time

In Swedo v. W.R. Grace & Co., Maryland’s Court of Special Appeals determined that a dollar credit rather than a week’s credit methodology should be applied to calculate the credit due to a workers’ compensation insurer for permanent partial disability benefits paid under an initial award that was subsequently modified on appeal. The statute, which requires that a credit be applied, did not specify the method to be applied in calculating the credit. The court held that the credit should be calculated based on the actual dollar amount paid rather than the total number of weeks paid under the initial order.—From Maryland State Chapter Co-Chair Susan Smith