CLM National: June 2019

The Florida Supreme Court reverses its stance on Daubert, the Connecticut Superior Court provides guidance on insurance “matching statute,” and, in Arizona, an overhaul of the construction defect pre-litigation statute upends over a half-century of contract law.

Connecticut

Superior Court Gives Guidance on Matching Statute

Since 1990, 12 states have adopted some form of the NAIC model regulation known as the insurance “matching statute.” In that time, most of the attention has focused on the statute’s phrase “reasonably uniform appearance.” As beauty is in the eye of the beholder, a homeowner may be less likely than her insurer to think replacement siding strikes a reasonably uniform appearance. On April 30, the Connecticut Superior Court, in Kamansky v. Liberty Mutual Ins. Co., highlighted another aspect. Granting summary judgment for the insurer, the court held that Connecticut’s matching statute (requiring a reasonably uniform appearance among “adjacent” items) did not require replacement of a house’s entire siding even though the existing, faded, siding was not reasonably uniform with the replaced siding because the damaged section wasn’t adjacent to the other sections of the same house. In so doing, Kamansky further guides insurance professionals with the interpretation that “reasonably uniform appearance” limits to “adjacent” items.—From CLM Member Marie Cheung-Truslow

Kentucky

Courts to Weigh In on Breastfeeding Statute

All states, including Kentucky, have a statute protecting a woman’s right to breastfeed in public. However, Kentucky’s statute is the only one that goes on to prohibit interference with the mother: “No person shall interfere with a mother breastfeeding her child in any location, public or private, where the mother is otherwise authorized to be.” (KRS 211.755(3)). Currently, there is no penalty for a violation, although a bill has been proposed to establish penalties. No court in Kentucky has interpreted this statute with respect to what constitutes interference with a mother breastfeeding. In the last six months, two cases have been filed in Jefferson Circuit Court in Louisville, alleging violation of KRS 211.755 arising from a mother being asked to cover up while breastfeeding, or to move to a private place to breastfeed. The court’s interpretation of the statute will shape future litigation.—From CLM Member Sarah M. McKenna

Arizona

Overhauled Statute Limits Subcontractor Indemnity

In April, the Arizona legislature overhauled the state’s construction defect pre-litigation statute. Including changes to notice requirements supported by owner affidavits and a mechanism for attorney’s fees recovery, the statute also places limitations on subcontractor (or design professional) indemnity. Contradicting over half a century of contract law, under the revised statute, subcontractors (and design professionals) are now only liable for their own defective workmanship. Gone are the days where a subcontractor can be liable for defective workmanship arising out of or relating to their scope of work. The statutory amendment allows for indemnification under a pure comparative fault system that is akin to Arizona tort law, wherein each party is responsible only to the extent of its own negligence. Accordingly, homebuilders and contractors in residential construction will now be prohibited from imposing indemnification obligations on subcontractors for damages not caused directly by the subcontractor.—From CLM Member Jill Ann Herman

Louisiana

Clarifying Billed Versus Paid Expenses

On May 8, in the matter of Kerry Simmons v. Cornerstone Investments LLC, et al, the Louisiana Supreme Court held that plaintiffs can only collect the amount of medical expenses actually paid by the workers compensation insurer, and not the actual invoice amount. The court specifically held that the collateral source rule does not apply to the amount written off, and the jury can only be presented with the amount paid by workers compensation, even though the collateral source rule prohibits telling the jury that workers compensation paid the bill.—From CLM Member Olivia Truong

Florida

Daubert Is Back

The Florida Supreme Court has backtracked from its earlier position to not adopt the state legislature’s Daubert amendments. The most recent change means Daubert will now become the standard regarding the admission of expert testimony in Florida. As reported here in December 2018, a 2013 legislative amendment of Section 90.702 of the Florida Rules of Evidence incorporated Daubert as the standard governing admission of expert witness testimony. But the court determined in the October 2018 case, DeLisle v. Crane Co. et al., that the legislature’s codification of Daubert violated the state’s constitution. This returned Florida to the more lenient Frye standard. However, in a per curiam opinion on May 23, the court stated, “We now recede from the court’s prior decision not to adopt the legislature’s Daubert amendments to the Evidence Code and to retain the Frye standard.” The court says the “grave constitutional concerns” raised by opponents of the legislature’s Daubert amendments “appear unfounded,” and adds the Daubert amendments remedy deficiencies of the Frye standard.—From Managing Editor Phil Gusman

New Jersey

Subrogation Action Barred by Express Wording of AIA Form

In Ace Am. Ins. Co. v. American Med. Plumbing, Inc., a property insurer paid a $1.2 million damage claim and filed suit against a subcontractor, alleging the damage was caused by its work. The subcontractor argued that the subrogation-waiver provision of the AIA A201-2007-General Conditions form barred the claim. The trial court agreed and the Appellate Division affirmed the trial court. In interpreting the waiver-of-subrogation provision in conjunction with the insurance requirements, the court noted that the form required the owner to procure builder’s risk insurance to cover the interests of the owner, contractor, and subcontractors. The Appellate Division rejected the property insurer’s arguments that the provision applied only to claims for damage to work itself but not to the property of others; and applying the waiver was inconsistent with the form’s requirement that contractors purchase liability insurance. The court pointed out that the contract expressly stated that the waiver “takes precedence over the contractor’s insurance obligation.”—From CLM Member Julia C. Talarick