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CLM National: July 2020

News and verdicts that affect you from across the country

July 30, 2020 Photo

Illinois Gov. J.B. Pritzker signs workers compensation measure after initial emergency amendment was withdrawn following a court challenge; a series of approved bills in Louisiana will shield businesses from COVID-19 liability in many cases; and, in Maryland, a court of appeals decision precludes the beneficiary of a contractual waiver from being brought into litigation by a third party seeking contribution.


Law Firm May Represent Insured Against Former Client

The Washington Supreme Court unanimously held in Plein v. USAA Cas. Ins. Co. that a former client seeking to disqualify the adverse party’s lawyer has the burden of showing that matters were substantially related. In this case, the law firm Keller Rohrback LLP (Keller) represented homeowners in a lawsuit against USAA Casualty Insurance Company (USAA) alleging that USAA refused to pay for expenses after a house fire in bad faith. Keller had previously represented USAA for many years in various cases. USAA alleged a conflict of interest disqualifying Keller under Rule of Professional Conduct 1.9, which states that a lawyer may not represent a new client against a former client “in the same or a substantially related matter in which that person’s interests are materially adverse to the interests of the former client.” The Washington Supreme Court determined that the burden for showing that matters are “substantially related” rests with the former client, and found, in this case, that the facts were distinct and unrelated.—From CLM Member Sarah E. Davenport


Signed Bills Protect Business From COVID-19 Liability

Gov. John Bel Edwards signed three bills designed to offer protections against COVID-19 lawsuits. HB826 shields businesses; local and state governments; and event organizers from civil damages for COVID-19-related injuries or death unless the damage was caused by gross negligence or willful or wanton misconduct. It further states that employees not covered by workers compensation shall have no remedy in tort against their employer for exposure to COVID-19 unless caused by an intentional act. SB491 offers similar protections to those who render disaster relief, recovery services, or products outside of the typical course and scope of their operations during a declared emergency. SB508 also extends the protections to restaurants during a declared state of emergency. The acts are retroactive to March 11, 2020.—From Managing Editor Phil Gusman


COVID-19 Liability Bill Dies on House Floor

A bill that would have limited COVID-19-related liability for businesses, health care providers, and schools failed to secure enough votes to advance in the House. A June 19 conference committee report in the House failed after gaining 46 votes for passage. The Chattanooga Times Free Press notes 50 votes were needed. Under SB2381, covered entities would not be liable “for damages, injury, or death that results from, or in connection with, a health emergency claim…related to coronavirus unless the claimant proves by clear and convincing evidence that: (1) the covered entity caused the damages, injury, or death by acting with gross negligence or willful misconduct; and (2) if public health guidance applicable to the covered entity had been issued, the covered entity did not substantially comply with any public health guidance applicable to the covered entity.” A Shelton Herald report noted on June 16 that the concepts in the bill had been “widely embraced by Republican Gov. Bill Lee and GOP lawmakers.”—From Managing Editor Phil Gusman


Pritzker Signs New COVID-19 WC Agreement

Illinois Gov. J.B. Pritzker signed a bill creating a rebuttable presumption of workers compensation coverage for first responders and front-line workers. The Illinois Workers’ Compensation Commission previously enacted an emergency amendment to the rules that would have created a rebuttable presumption so that when medical personnel, first responders, and essential employees contracted COVID-19, the disease would be presumed to have arisen out of, and occurred in the course of, their employment, and would be presumed to have been causally related to their employment. After a significant court challenge, the amendment was withdrawn April 27. The bill signed by Gov. Pritzker, HB 2455, allows essential employees a rebuttable presumption, but it makes it far easier than labor wanted for employers to rebut those claims. Basically, in attempting to rebut the presumption, an employer simply has to show “some evidence” that the employee could have contracted the virus elsewhere or that the employer engaged in best practices outlined by the CDC or Illinois Department of Public Health.—From CLM Member Joe Higgins


DIFS Orders Auto Insurance Refunds

Department of Insurance and Financial Services (DIFS) Director Anita Fox has ordered all auto insurers in Michigan to issue refunds or premium waivers to consumers as a result of insurance companies’ reduced risk due to decreased road traffic during the COVID-19 pandemic. The May 28 order set a June 10 deadline for insurers to submit filings that include the refund or premium waiver amount, information on how that amount was determined, and how consumers would receive payments. Furthermore, the order requires communication plans to inform customers about the refund and available options for those with “long-term changes” in driving habits, such as those who have been laid off or are telecommuting. Fox says, “This order will ensure all insurers are issuing appropriate refunds or premium waivers to their customers. Consumers may realize additional savings by modifying their policies to reflect their current driving habits.”—From Managing Editor Phil Gusman


Third Party Shielded From Joint Tortfeasor Contribution

As a matter of first impression, the Court of Appeals in Gables Construction Inc. v. Red Coats Inc., et al. held that a party against whom the injured party contractually waived subrogation cannot be a joint tortfeasor liable in tort to a third party under the Maryland Uniform Contribution Amount Joint Tort-Feasors Act (UCATA). Whether a defendant is liable in tort and shares common liability under the UCATA has been interpreted in the context of interspousal immunity, workers compensation immunity, and contributory negligence. In each instance, Maryland courts have held that there is no right to contribution under the UCATA where the injured party has no right to recover directly against the third-party defendant. The Court of Appeals wrote that there is no reason to deviate from this rationale in the context of contractual waivers. This decision is significant in that it precludes the beneficiary of a contractual waiver, which is a common provision in construction contracts, from being brought into litigation by a third party that seeks contribution.—From CLM Member Maryan Alexander

About The Authors
Phil Gusman

Phil Gusman is senior managing editor for CLM Magazine and Construction Claims magazine.  phil.gusman@theclm.org

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