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National News: September 2017

News and verdicts that affect you from across the country

September 14, 2017 Photo

Rights to accessibility extend to digital environments in Florida, New York workers compensation carriers try to make sense of medical marijuana, and in California, the 9th Circuit shifts its stance on law firm liability.


Contribution Scrutiny

In 2013, the Oregon legislature passed amendments to the Oregon Environmental Cleanup Assistance Act (OECAA), that, among other things, precluded contribution actions against co-insurers that have entered into good-faith settlements with co-insureds. The amendments include an exception for any contribution action arising from a final judgment entered into prior to the amendments’ effective date. In Certain Underwriters at Lloyd’s London v. Massachusetts Bonding & Ins. Co., Lloyd’s sued other insurers for contribution. As of the effective date of the amendments, the underlying action was on appeal. It was undisputed that the defendants had good-faith settlements with the insured. Lloyd’s contended that its contribution action fell within the statutory exception and, therefore, was not subject to the 2013 amendments. The Oregon Court of Appeals rejected the argument, concluding that Lloyd’s action was barred. It reasoned that there was no final judgment prior to the 2013 amendments because, at the time of their passage, the insured’s underlying action was on appeal.—From CLM Member Geoffrey Bedell


Court Says Check Your Work

In Afewerki v. Anaya Law Group, et al., the 9th Circuit Court of Appeals expanded liability under the Fair Debt Collection Practices Act to include a law firm’s inadvertent misstatement. California-based Anaya Law Group was retained by Los Angeles Federal Credit Union to take over collection efforts on a credit card customer’s delinquent account, including filing an unverified collections complaint in state court. The debtor retained counsel, who sent plaintiff a demand for a bill of particulars. Anaya then discovered the original complaint contained errors, including overstating the amount owed by $3,000 and overstating the interest rate. Anaya said its client had provided the correct information and the error was inadvertent, and then corrected the errors. The debtor filed suit in federal court alleging violation of the Fair Debt Collection Practices Act and California’s companion law, the Rosenthal Act. On appeal from competing summary judgments, the 9th Circuit’s ruling expands liability against law firms for “material” errors in pleadings where the error might cause a debtor to overpay his debt, even if in this case the debtor did not.—From CLM Member Wyeth Burrows


Insurer Must Defend Subcontractor’s Defective Work

On July 13, 2017, the 7th Circuit Court of Appeals ruled in Westfield Insurance Company vs. National Decorating Inc. that a general liability insurer had a duty to defend its insured subcontractor—and additional insureds owner and general contractor—against allegations that the subcontractor’s defective work damaged other parts of a new construction building. The court held that allegations of the subcontractor’s improper application of exterior waterproof coatings, resulting in water incursion throughout the building, constituted property damage as a result of an occurrence under Illinois law. As such, the court held that the insurer breached its contract of insurance when it declined to defend the named and additional insureds against these construction defect allegations.—From CLM Member Andrew C. Patton


Court Reaffirms Rejection

In Hicks v. State Farm Mut. Auto. Ins. Co., James Hicks sustained serious personal injury as a passenger in a car accident. The vehicle—which had been rented by the father (Danny Norman, Sr.) of Hicks’ friend—was being operated by another mutual friend at the time, Roy Crackle. The elder Norman rented the car for his son’s use, but neither he nor his son (Danny Norman, Jr.) authorized Crackle to drive it. This fact served as the basis for a summary judgment in Norman, Sr.’s favor in an earlier negligent entrustment suit that Hicks had filed against him. Undeterred, Hicks filed a subsequent lawsuit seeking a declaration that Crackle was an insured under Norman, Sr.’s auto policy. In opposing State Farm’s summary judgment motion, Hicks argued that by permitting his son to drive the rental car, Norman, Sr. had implicitly consented to Crackle’s use of the vehicle. In rejecting this “initial permission rule” for purposes of determining whether the vehicle’s use was within the scope of permission granted, the appellate court reiterated the rule that no coverage is afforded if the use represents a complete departure or gross deviation from the scope of permission.—From Northeast Ohio Chapter Secretary Michael C. Brink


Right to Enjoyment of Services Extends to Digital Under ADA

The Americans with Disabilities Act recently joined the fast-paced journey into the digital age. One Florida federal court found that Winn-Dixie’s failure to make its website accessible to visually impaired users violates the right to accessibility. In Gil v. Winn-Dixie, a legally blind individual sued the grocer after finding that his screen reader software was not compatible with Winn-Dixie’s website (to order his prescriptions and receive digital coupons). The court found that Gil’s right to enjoyment of goods and services does not only apply to “physical” enjoyment, but also to “digital” enjoyment of the services that Winn-Dixie’s website has to offer. According to the court, Winn-Dixie’s website is a gateway to the physical store, qualifying it as a place of public accommodation. The court granted an injunction requiring, among other things, that Winn-Dixie make its website compatible with prominent screen-reading software. The court also granted recovery of attorney’s fees.—From CLM Member Jason H. Klein

New York

Workers Comp and Medical Marijuana

As the national trend toward usage of medical marijuana continues, carriers in New York are keeping an eye on its prescription in workers compensation claims. While the majority of conditions for which it may be prescribed are severe—such as AIDS or ALS—other arguably less-serious conditions also are eligible for a prescription. These include spinal cord injuries with spasticity and neuropathy with the complicating condition of severe or chronic pain or spasms. Such claims make up a significant portion of the neck and back claims in New York. Carriers also will need to be on the lookout for proposed additions to that list, including post-traumatic stress disorder. New York also has recently permitted nurse practitioners, instead of physicians, to certify patients for the drug, suggesting that this will be an area of growing concern for carriers already facing high costs and concerns given the nation’s opioid crisis.—From CLM Members Damon M. Gruber and Cory A. DeCresenza


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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