CLM National: July 2019

News and verdicts that affect you from across the country

July 26, 2019 Photo

“Alice’s Law” is sent to the governor in New York, the California Supreme Court rules on businesses’ lost income stemming from a massive 2015 gas leak, and the Kansas Supreme Court strikes down the legislature’s cap on noneconomic damages in personal injury actions.

New York

Staged Accident Bill Sent to Governor

“Alice’s Law” is now on Gov. Andrew Cuomo’s desk after passing the assembly in May and the Senate in June. The bill, A3985, is named for Alice Ross, who died in a staged accident in Queens, New York, in 2003. If signed, the law would make staging an auto accident a specific crime. The bill defines staging an accident in the second degree as setting up a collision for the purpose of committing a fraudulent insurance act, a Class E felony. Staging an accident in the first degree—a Class D felony—would be defined as an act that results in a serious injury or death. The Coalition Against Insurance Fraud is urging Gov. Cuomo to sign the bill, and says staged crashes in New York drive up premiums and are often set up by organized rings.—From Managing Editor Phil Gusman


No Recouping Lost Profits After Gas Leak

The California Supreme Court, in a sensitively written decision, ruled that local businesses in the area of a large 2015 gas leak from a gas company’s facility could not recover in negligence solely for income lost as a result of the leak when they did not allege personal injury or property damage. It also determined that there was no “special relationship” justifying this type of liability. In the Southern California gas leak cases, the court humanized economic loss, recognizing the personal pain and devastation that came with it. However, weighed against the repercussions of permitting indeterminate and disproportionate liability, the court decided, almost apologetically, to follow the majority of other jurisdictions in what it deemed the “least-worst” rule, and closed the judicial doors to recovery in negligence for purely economic losses. It then suggested a legislative cure for the imperfect rule. It will be interesting to see whether popular demand will cause any movement on that front.—From CLM Member Silvia C. Schaffer


Supreme Court Strikes Down Damages Cap

The Kansas Supreme Court ruled in Hilburn v. Enerpipe Ltd. that Kansas’ cap on noneconomic damages in personal injury actions is unconstitutional. The underlying case involved a 2010 accident in which the plaintiff was awarded over $33,000 in medical damages and over $301,000 in noneconomic damages. The noneconomic portion was reduced to $250,000 in accordance with the statute’s limit at the time. The plaintiff appealed the adjustment, but the court of appeals upheld the district court’s action. The Kansas Supreme Court, though, determined that the cap on damages violates section five of the Kansas Constitution Bill of Rights, which states that “the right of trial by jury shall be inviolate.” The statute, according to the court, “substitutes the legislature’s nonspecific judgment for the jury’s specific judgment. The people deprived the legislature of that power when they made the right to trial by jury inviolate.”—From Managing Editor Phil Gusman


Exclusion Does Not Render Policy Term Ambiguous

In Seaton v. Shelter Mut. Ins. Co., the Missouri Supreme Court reversed a summary judgment in favor of the policyholder on her claim for UIM benefits. Leslie Seaton’s daughter, Chelsea, suffered fatal injuries when her sister lost control of the vehicle she was driving and crashed. Shelton denied coverage on the basis that Chelsea was not a defined “insured” because the policy’s plain language excluded coverage for a relative who owns a vehicle, which Chelsea did. The appellate court upheld the trial court’s judgment that the policy’s definition of “relative” was ambiguous, since an insured would not expect that definition to exclude claimants who own their own vehicles. The Missouri Supreme Court, however, disagreed and reversed the lower court decisions, stating, “Based upon the insurance policy[’s] plain language, it is clear that the [d]ecedent did not meet the definition of a ‘relative’ to receive UIM coverage because she owned a motor vehicle.”—From Northeast Ohio Chapter Secretary Michael C. Brink


Pre-Death Trauma Factors Into Record Verdict

In May, an uninsured motorist case was tried in Shelby Circuit Court, resulting in a verdict of $1.5 million for the plaintiff—the largest ever in this court. While the underlying facts were interesting (the plaintiff was the estate of a woman who was killed when the driver of a commercial motor vehicle, believed to have been watching videos on his phone, collided with the decedents’ vehicle at around 70 mph), another very intriguing part of this case was the plaintiff’s conscious pain and suffering argument at trial. A pathologist testified that the decedent had lived several minutes before dying from trauma. An expert specializing in time distortion research testified that, in a traumatic event, from the perspective of the victim, time can appear to slow down. The jury awarded $500,000 for pain and suffering.—From CLM Member Sarah M. McKenna

New Jersey

Courts Eye Mandatory Malpractice Insurance Disclosure

The Administrative Office of the Courts (AOC) is set to propose formal adoption of Rule 1:21-1D, which will require attorneys in private practice to file a certificate of insurance with the clerk of the Supreme Court. This proposed rule is the result of a 2017 report issued by the Supreme Court Ad Hoc Committee on attorney malpractice insurance. In the report, the committee evaluated whether attorneys in private practice should be required to have malpractice insurance; report their malpractice insurance; and to affirmatively disclose to clients if they lack such insurance. The New Jersey State Bar Association recommends that the requirement be combined with safeguards, such as prohibiting malpractice insurance disclosure as a basis in a malpractice claim. Although no official date is set to file certificates of insurance, the AOC advises that adoption of this rule will require disclosure of basic policy information, policy amendments, renewals, and termination.—From CLM Member Digisha Bhavsar


About The Authors
Phil Gusman

Phil Gusman is CLM's director of content.

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