Discovery Deadlines and the Importance of Court Approval

The Delaware Supreme Court has long valued the civility fostered within the Delaware Bar, and has encouraged Delaware attorneys to resolve discovery disputes without the need for court involvement.  While these aspects of Delaware practice remain alive and well, the issues facing civil attorneys in granting extensions to trial scheduling orders and the process of doing so, was raised in Christian v. Counseling Resource Associates, Inc.

In Christian, the Delaware Supreme Court determined that the Superior Court erred in precluding the testimony of Plaintiffs’ expert based on Plaintiffs’ failure to provide their expert reports in accordance with the applicable trial scheduling order.  Plaintiffs, the widow and children of the Decedent, brought suit against the Decedent’s health care providers for medical negligence resulting in the Decedent’s suicide.  The trial scheduling order required Plaintiffs’ expert report to be filed by December 3, 2010 in anticipation of an August 1, 2011 trial date.  As the case progressed, Plaintiffs were required to retain new counsel and, in November of 2010, the parties stipulated to extend the relevant expert deadlines.  Although Plaintiffs’ counsel wrote to the court in February of 2011 requesting a teleconference to discuss the discovery schedule, the court refused and informed the parties the trial date would not be altered.

After a number of delays, Plaintiffs’ experts were made available for depositions in late July 2011.  Shortly thereafter, Defendants filed a motion to preclude Plaintiffs’ expert testimony.  The trial court granted that motion and a related motion for summary judgment, which effectively barred Plaintiffs’ claims as a matter of law in light of the lack of expert testimony. On appeal, the Delaware Supreme Court found the trial court abused its discretion in refusing to hold a scheduling conference and in ultimately precluding Plaintiffs’ expert testimony.

In so holding, the Supreme Court reviewed six (6) factors that must be considered by the trial court in determining whether a case should be dismissed for the attorneys’ failure to abide by scheduling orders.  These factors include:

(1) the extent of the party’s personal responsibility; (2) the prejudice to the dversary caused by the failure to meet scheduling orders and respond to discovery; (3) a history of dilatoriness; (4) whether the conduct of the party or the attorney was willful or in bad faith; (5) the effectiveness of sanctions other than dismissal…; and (6) the meritoriousness of the claim or defense.

Although a review of the factors suggested dismissal was warranted, the Supreme Court reviewed the case in light of the trial court’s failure to hold a scheduling conference when requested by Plaintiffs’ counsel, and at a time where dismissal could have been avoided.

In reviewing the case before it, the Delaware Supreme Court advised litigants that “if they act without court approval, they do so at their own risk.”  The Court further iterated that, “[i]f one party misses a discovery deadline, opposing counsel will have two choices – resolve the matter informally or promptly notify the court.”  Should a party choose not to involve the court, that party will be deemed to have waived the right to contest any late filings by opposing counsel from that time forward.  The Court counseled that parties may continue to agree to reasonable extension requests, but a proposed amended scheduling order for the trial court’s signature must be promptly filed.

In the post-Christian landscape, the determination of motions to dismiss based not on the merits, but on discovery violations are less likely to succeed.  Counsel can still agree to extensions of trial scheduling deadlines, but doing so requires the blessing of the court.

For more information about this article, please contact Noelle Torrice at 302.594.9780 or ntorrice@fandpnet.com.

 

F&P Launches New Office in Richmond, VA

On May 1, 2017, Franklin & Prokopik (F&P) announced the official opening of a new office in Richmond, Virginia.  The new office is F&P’s seventh office, and second location in Virginia.  Extending the firm’s geographic reach, the Richmond location focuses on serving clients in Central and Southeastern Virginia, including the Richmond Metropolitan and Hampton Roads areas.  This conveniently located office allows F&P to more efficiently represent existing clients in these areas and to serve new clients in the region.  The office’s grand opening was on June 15, 2017.

Led by Lindsey Lewis, the Richmond location brings extensive civil litigation experience in the areas of automobile/commercial transportation, business, construction, employment, premises, and professional liability, including defense of medical malpractice and nursing home claims and the representation of health care professionals before the Virginia Department of Health Professions.  The office provides individually-tailored legal services for F&P’s diverse clients.  These services include risk management consulting and counseling, as well as emergency response and crisis management as part of F&P’s 24-hour Emergency Response Team.
For more information about this article, please contact Lindsey Lewis at 804.932.1996 or llewis@ fandpnet.com.

Virginia Supreme Court Finds Expert’s “Process of Elimination” Opinion Lacking

The Virginia Supreme Court has overturned a jury verdict in a medical malpractice case based on the improper admission of expert testimony into evidence.  The Court’s April 13th unanimous decision in Toriash v. Lee, on appeal from the Fairfax County Circuit Court, will require the parties to try the case anew.  It is expected the court’s ruling will have an effect on all expert testimony going forward, particularly in cases requiring medical testimony.

In 2012, otolaryngologist Dr. James J. Lee performed outpatient tonsillectomy and adenoidectomy surgery on five-year-old Adam Traish, who suffered from severe obstructive sleep apnea.  After monitoring in the post-anesthesia care unit, Adam was discharged from the hospital.  Later that afternoon, Adam’s mother, Miriam Toraish, found him unresponsive and he was eventually pronounced dead at the hospital.

An autopsy concluded that the cause of death was “cardiac arrhythmia of unknown etiology.”  Adam’s mother instituted a medical malpractice action on behalf of his estate, alleging that Adam was at a high risk for post-operative respiratory complications and that Dr. Lee violated the standard of care by failing to monitor Adam overnight.

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At trial, the defense called Dr. Simeon Boyd, a pediatric geneticist, as an expert on genetics and the cause of Adam’s death.   Over Plaintiff ’s objection, Dr. Boyd testified that Adam died of cardiac arrest due to Brugada syndrome, a rare hereditary disease.  When questioned on cross examination about the basis for his opinion, Dr. Boyd stated that in arriving at his conclusion he either excluded all likely causes of death himself or “relied on the expertise of people who are qualified to exclude them.”

On appeal, Plaintiff argued that Dr. Boyd was not qualified to testify definitively as to cause of death because the differential diagnosis was not based on adequate foundation.  The Virginia Supreme Court agreed.  The autopsy report on which Dr. Boyd partially relied did not rule out respiratory compromise as a cause of death, the Court held.  Similarly, the pulmonologist’s deposition that Dr. Boyd also cited for support was not taken until after Dr. Boyd rendered his findings.  In sum, the Court held that Dr. Boyd’s testimony was based on assumptions that were not in evidence and the trial court judge abused his discretion in allowing Dr. Boyd to testify as to the cause of death.

The holding in Toraish v. Lee affects not just medical malpractice claims, but all cases in which medical expert testimony is necessary to the prosecution or defense of the case.  In personal injury claims where causation of the injury is in dispute, parties should be aware that Virginia courts will take a stringent view of the foundation required for expert testimony, disallowing conclusions that appear to be based on assumptions rather than factual findings.

What You Should Know Before Settling Claims in Maryland

What is a settlement?

A settlement agreement is a contract which parties enter into for settlement of previously existing claims by substituted performance, and its interpretation is governed by ordinary principles of contract law. The agreement is typically memorialized by a Final Release and Settlement Agreement. The Agreement typically is not filed with the court unless it needs to be approved by statue (i.e. minors). A settlement “order” which becomes a part of the Court record either by stipulation, or read into the record, is presumed to be an “executory accord”, which is an agreement for the future discharge of an existing claim by a substituted performance. In Maryland, a settlement agreement is a binding contract as long as the basic elements of a contract are present. Public policy considerations strongly encourage the settlement of controversies.

How do you enforce a settlement agreement?

If the breach of the agreement goes to an essential element the party aggrieved has two options: 1) rescind the agreement and proceed with the original cause of action; or 2) sue on the agreement for breach by compelling specific performance and securing any damages caused by the delay. Maryland courts adhere to the objective theory of contract interpretation and will give effect to the clear terms of the agreement, regardless of the intent of the parties at the time of formation.

The non-breaching party may not rely on an “invalid” provision in a settlement agreement to excuse the party’s failure to perform its obligations. Generally, when parties settle a case with the assistant of their attorneys and the settlement agreement sets forth unambiguous language expressing their mutual agreement for a stipulated remedy in the event of a breach, the court must have a compelling reason to justify refusing to enforce such a stipulated remedy.

Is the settlement agreement reached enforceable and final?

Generally, a failure to agree to an essential term means that there is no contract, however, if the parties unambiguously express their intent to “settle a lawsuit” this is considered a definite expression of their intent, and assent, to achieve a state of litigation peace. What constitutes “litigation peace” is a factually specific inquiry.

Practical scenario:

Defense counsel: “I will ask my client for $7,000 if I knew it would be accepted.” Plaintiff ’s counsel: “My client will accept and not counter if $7,000 is offered.” Defense Counsel: “We are settled at $7,000, please provide documents to carry out payment.” The next day, defense counsel sent a Release agreement containing language that Plaintiff would indemnify the released parties for any future recovery sought by Medicare. Plaintiff ’s counsel sought to strike the indemnification provision as to Medicare. The case was dismissed from the Court’s docket while the parties remained at an impasse regarding the terms of the written agreement. Defense counsel ultimately filed a Motion to Enforce Settlement.

A recent unreported opinion Court of Special Appeals, Julie Ward v. Marjorie L. Lassiter, No. 1823 (January 13, 2017) addressed this precise factual scenario. The Court of Special Appeals held that by agreeing to settle a case at a certain amount, litigants entered into an enforceable agreement to execute mutual releases, including an agreement for Plaintiff to indemnify the released parties from any claims made by third parties. Even though the parties did not discuss a release or its terms, the Court of Special Appeals found that it was clear that “an agreement to settle pending litigation includes an agreement to execute mutual releases.” The Court agreed with the Defendant that to the extent that Medicare, or anyone else would have a future claim against the Defendant or its insurance company for the funds expended to the Plaintiff as a result of the accident in issue, the Plaintiff agreed to take responsibility for those claims by virtue of settling the case. Therefore, this was not, in the Court’s review, a “failure to assent to a material settlement term.” As a best practice however, the enforcement of this contract could have been avoided had the Medicare provisions been discussed and memorialized in advance of the draft Release.

Pro Se Plaintiff Gives a New Meaning to “Creating a Federal Case” in West Virginia

Throughout our day to day activities in our professional lives, we have all heard of the mythical set of operative facts wherein someone seeks to take a simple proposition and turn it into a federal case.  Such factual scenario existed in West Virginia for a Franklin & Prokopik client.  The factual background of the matter dealt with the client who owned, operated, and maintained a rather large residential complex which catered to residents who were retired, disabled, or beneficiaries under several federal government entitlement programs.  The tenant/plaintiff in this matter was a retiree who represented that he had been a building inspector in the “city” prior to his retirement.

The plaintiff ’s tenancy at the client’s property began like many tenants, in that the plaintiff became involved in several of the activities and groups maintained at the facility and began to inform management of certain deficiencies within the building and site layout, including parking areas.  One day, the plaintiff complained because a service contractor’s vehicle was parked in a handicapped spot temporarily, and the plaintiff had to park in another space.  The plaintiff demanded that the client vigorously enforce handicap parking so that this would not happen again.  Ironically, several days later, the plaintiff parked in a handicapped space and failed to properly display his handicap placard, and his vehicle was towed from the site.  As a result of the citation and fine, the plaintiff began to argue and make complaints to local, state, and federal government agencies regarding his perceived deficiencies in the client’s facilities.  Ultimately, the plaintiff, in a pro se capacity, filed suit against F&P’s client in the United States District Court for the Northern District of West Virginia and alleged violations of the Fair Housing Amendments Act and the Americans with Disability Act, which included a reasonable accommodation claim and a design and construction claim.  As one can imagine, upon receipt of the Complaint, a motion to dismiss was filed with the District Court, which requested that the District Court dismiss the plaintiff ’s complaint for failure to state a claim upon which relief can be granted under Rule 12(b)(6).

After substantive briefing on these matters, which included multiple unpermitted supplementations by the plaintiff wherein he alleged numerous violations beyond the scope of the complaint as initially pled, which included allegations of intentional pest infestation and surreptitious surveillance of the plaintiff by the client, the District Court granted the Motion to Dismiss.  Specifically, the District Court found that the plaintiff ’s complaint failed to detail a request for an accommodation, or that the proposed accommodation was reasonable for the requisite link necessary between his alleged disability and the proposed accommodation.  Moreover, the District Court dismissed the design and construction claim by finding that the plaintiff made no allegations that invoked the time requirement and the occupancy requirement necessary under the applicable federal statute.  Despite the thorough analysis and dismissal of the plaintiff ’s claims by the District Court, the plaintiff, who could be characterized as persistent, decided that he would appeal the Memorandum Opinion and Order, granting the Motion to Dismiss to the United States Court of Appeals for the Fourth Circuit.  To the astonishment of everyone, except probably the plaintiff, the United States Court of Appeals for the Fourth Circuit granted the plaintiff ’s appeal of the District Court’s Order, and fortunately determined that the nature of this matter was better served by the court’s informal briefing process.  Thus, the matter was fully briefed to the United States Court of Appeals for the Fourth Circuit, and by unpublished per curium opinion, the United States Court of Appeals for the Fourth Circuit affirmed the District Court’s ruling, and held that oral argument would not aid in the decisional process of the matter based on the facts and legal contentions presented in the materials.

Interestingly, the litigation process in the federal court system took such a lengthy time, that the plaintiff decided on his own accord, to vacate the client’s facility, and move to another location.  The plaintiff ’s decision to move to another facility seemed to be the end of a rather lengthy and costly appeal to the Fourth Circuit.  However, several months after the Fourth Circuit’s Order became final, the plaintiff decided to bring an action in state court against not only the client, but the property manager in their individual capacity.  As one could foresee, this action was definitely an action that was brought on a personal level and was one that needed to be contained and dealt with as quickly as possible.  To that end, another motion to dismiss was drafted and a hearing on the same was held in state court.  The State Court, having given an appropriate amount of deference to the plaintiff as a pro se party, finally made rulings regarding the credibility of all witnesses, and under the doctrines of res judicata and collateral estoppel dismissed the plaintiff ’s claims and awarded judgment in favor of F&P’s client.  The state court further deplored the plaintiff regarding any future actions on these matters whether it be in state court or federal court.  The take away from this experience is two-fold.  First, the claims and defenses associated with this client resonates with all who try to manage claims, and the risks associated therewith.  Second, it underscores the fact that all claims, and specifically pro se claims, however far reaching one may believe they are, should be dealt with in a timely and appropriate fashion so that they do not become litigation that takes on a considerable life of its own.

For more information about this article please contact Gregory E. Kennedy at 304.596.2277 or gkennedy@fandpnet.com.

Delaware Attorneys Prevail at Jury Trial

William (“Skip”) Crawford and Krista Shevlin were involved in litigation which ultimately proceeded to jury trial.  Liability was admitted but the nature and extent of the plaintiff ’s injuries were vehemently denied.  The jury returned a verdict in favor of the defendant.

A negligence claim was filed by the plaintiff, arising out of a three vehicle rear end automobile accident.  There was no dispute that the plaintiff was stopped in traffic with a vehicle stopped directly behind her.  It was further undisputed that the driver of the client’s tractor-trailer was unable to stop before striking the middle vehicle, forcing it into the rear of the plaintiff ’s stopped vehicle.

It was argued extensively both pre-trial and during trial that the force of the middle vehicle striking the plaintiff was miniscule with virtually no damage to the rear of the plaintiff ’s vehicle, and the injuries alleged by the plaintiff could not have been a result of the minor impact.

Specifically, the plaintiff, through expert medical testimony, alleged extensive damages, including two spine surgeries to address a herniated disc at C6-C7 and radiculopathy.  The plaintiff alleged $162,000.00 in special damages as well as ongoing pain and suffering and permanent disability.

These allegations were countered with the testimony of a defense medical expert. The medical expert conceded the plaintiff sustained a cervical sprain/strain in the accident and causally related approximately $14,000.00 of the plaintiff ’s medical bills to injuries resulting from the accident.   The medical expert further testified that the spinal surgeries and extensive treatment were not related to the accident.  F&P’s defense medical expert’s opinions were supported by that of a biomechanical expert who testified that the  minor damage to the plaintiff ’s vehicle and the injuries alleged by the plaintiff could not have been a result of the minor impact.

The plaintiff sued both F&P’s client driver and the driver of the middle vehicle.  The driver of the middle vehicle was dismissed on a motion for summary judgment based on the undisputed testimony of all parties and witnesses that the middle vehicle stopped short of the plaintiff and was forced into the plaintiff after being struck by our client.   The client conceded responsibility for the incident. The sole issues for the jury were causation of the claimed injuries and the nature and extent of the plaintiff ’s damages.

Prior to trial, the plaintiff filed a motion in limine to exclude the testimony of the defense biomechanical expert on the basis that her evidence did not meet the Daubert standard.  According to the plaintiff ’s counsel and the trial court, no Delaware court had ever before allowed the testimony of a biomechanical engineer at trial.   The court held a hearing on the motion and heard testimony from the biomechanical engineer regarding the investigation and methods utilized to formulate her opinions. After the hearing, the court issued an order permitting the defense expert to testify at trial to her opinions as to the force of impact and likelihood of this causing the alleged injuries.

Before the court’s ruling, the plaintiff ’s settlement demand was $400,000.00  and she refused to negotiate below that number. Subsequent to the court’s ruling, the plaintiff lowered her demand to $160,000.00. The defendants countered with an Offer of Judgment of $85,000.00. The offer was rejected.

Following a three day trial, the jury returned its verdict in less than four hours and only awarded the plaintiff $48,000.00 in damages.  Because the verdict was below the Offer of Judgment, Defendants were entitled to the litigation costs incurred subsequent to the Offer of Judgment.

For more information about this article please contact Krista E. Shelvin at 302.594.9780 or kshevlin@fandpnet.com.

A Trip to the Virginia Supreme Court

Earlier this year, attorney Joshua Hoffman of the Herndon office presented oral argument before the Virginia Supreme Court in the case of Tejada v. Harris Teeter, LLC.

The case arose out of a premises liability incident in which the plaintiff alleged that she slipped and fell on a wet floor at one of Harris Teeter’s northern Virginia store locations.  In the lower court, Joshua and Principal, Andrew Stephenson, prevailed in obtaining a jury verdict for the defendant following a trial on the merits.  The plaintiff appealed the verdict to the Virginia Supreme Court, arguing the trial court was incorrect in ruling to keep out a portion of the surveillance video of the incident showing post-slip clean up in and around the area of the fall during the plaintiff ’s case-in-chief.  F & P attorneys opposed the appeal by arguing the evidence was cumulative; it would not have changed the verdict; the plaintiff failed to use the video in rebuttal and thus waived her right to appeal the issue; and regardless, it was harmless error to exclude it.

Having filed detailed written briefs in advance, counsel for both parties appeared at the Virginia Supreme Court in Richmond on a cold and snowy day to make their final arguments on the issues in the case.  The plaintiff ’s counsel argued the surveillance video gave “context” to the testimony of other witnesses, and that the jury should have been entitled to judge the employee’s “demeanor and conduct” against their claims that the floor was dry.  The justices questioned what the video could have added to the case, as the plaintiff made no claim that the video showed a wet floor or debris.

The justices were also extremely interested in the plaintiff ’s explanation for why the video was not used in rebuttal as directed by the trial court.  The plaintiff ’s counsel offered various explanations that did not seem to sway the court, before returning to the basic argument that a trial attorney should be entitled to use relevant evidence where he believes it will be the most effective.

On the other side, Joshua urged the court to uphold the jury verdict in this case, as the video would not have added to the evidence the jury already considered.  Joshua noted that live testimony is preferred above all else, to which the chief justice responded, “Well, then who said a picture is worth a thousand words?”  Joshua’s quick-witted answer, “The same guy who said possession is 9/10ths of the law,” drew laughs from the justices and gallery alike.

The Court has recently issued a decision which upheld the verdict securing the win for the client.

For more information about this article, please contact Joshua M. Hoffman at 571.612.5938 or jhoffman@fandpnet.com.

 

Recent Successes in Maryland

Principal, Tamara B. Goorevitz and Associate, Carrie V. O’Brien, recently received a defense verdict for their client after a five day jury trial in the Circuit Court for Montgomery County. The plaintiff allegedly sustained a third degree chemical burn which required multiple surgeries. It was the plaintiff ’s theory, that an application of hair color by F&P’s hair salon client, had caused the plaintiff ’s injuries. The jury found that their client was not the cause of the plaintiff ’s injuries and, therefore, a verdict in favor of the defendants was entered.

Recently in a damages only trial in the Circuit Court for Baltimore County, Principal Andrew T. Stephenson and Associate, Renee L. Bowen, secured a favorable judgment for their client. The plaintiff sought economic damages in the amount of $1,421,443.72 (consisting of $1,134,076.00 in lost pension benefits, $271,000.00 in lost household services, and $16,317.72 in past medical expenses). The plaintiff claimed that soft tissue injuries he sustained in a rear-end motor vehicle collision cost him numerous promotions and, as a result, he was forced into early retirement which caused the pension he actually received to be significantly lower than had he retired after being promoted. Andrew and Renee were successful in showing that the plaintiff ’s ongoing complaints of pain to the alleged injured areas were not causally related to the motor vehicle accident and that the plaintiff ’s failure to be promoted was due to circumstances other than the soft tissue injuries sustained in the motor vehicle accident. As a result, the judge found that only a portion of the medical expenses claimed by the plaintiff were causally related to the accident and entered a judgment in his favor in the amount of $38,622.50 ($8,622.50 in economic damage and $30,000 pain and suffering).

The Circuit Court for Baltimore County is typically where summary judgment motions face an uphill battle. Breaking the trend, Principal, Stephen J. Marshall, was successful in obtaining summary judgment in a products liability action for a manufacturer of vertical reciprocating conveyors where the plaintiff had sustained a traumatic brain injury. Steve drafted and successfully argued a motion for summary judgment seeking to exclude the plaintiff ’s expert. After a hearing, the court adopted Steve’s arguments on the record as the basis for holding that the plaintiff ’s expert was not qualified to testify as an expert, and lacked a sufficient factual basis to offer his opinions. Summary judgment was entered in favor of F&P’s product manufacturer client.

Two of F&P’s associates were recently successful at trial in District Court (maximum exposure $30,000, bench trials only) where liability was considerably unfavorable to their clients.  Jessica J. Ayd, received a verdict of $1.00 in the District Court for Baltimore City. The lawsuit stemmed from a motor vehicle accident in which liability was unfavorable to the transportation client and its driver. Jessica located a public Instagram account for the plaintiff and showed the judge three videos of the plaintiff dancing which posted in the days and weeks after the accident. While the plaintiff claimed that the videos, which were posted after the accident, were taken before the accident. The judge simply did not believe her (and even referenced the lack of #tbt “Throw Back Thursday” or #latergram hashtag in the posting). The trial judge awarded damages in the amount of $1.00 to the plaintiff.

In an exceedingly plaintiff-friendly venue, Ryan M. Walburn, recently tried a case involving claims by two plaintiffs, stemming from a motor vehicle collision in which the plaintiffs’ vehicle was struck in the rear.  The plaintiff-passenger claimed that she sought emergency treatment shortly after the accident due to blurry vision and other concussion-like symptoms.  Ryan was able to establish that, despite these serious “symptoms,” the plaintiff did not seek treatment until the following day.  Ryan also introduced  into evidence the plaintiff-driver’s long history of similar rear-end collisions.  Even though liability was unfavorable to the client, as the collision was rear-end in nature, Ryan was able to impeach the plaintffs which resulted in the court finding the plaintiffs’ claimed injuries, medical expenses, pain and suffering were not causally related to the collision. Therefore, a verdict for the defense was entered.

 

Is the Cap on Punitive Damages Real Tort Reform?

West Virginia is routinely labeled a “Judicial Hellhole.” However, over the past two years, West Virginia has been removed from the “Judicial Hellhole” list and downgraded to the “watch list,” meaning there has been improvement, mainly stemming from the recent tort reform occurring through the West Virginia legislature.

One of the recent pieces of legislation that the West Virginia legislature has enacted is a cap on punitive damages, which went into effect on June 8, 2015. Highlights of the reform include: a standard of evidence demonstrating that a defendant acted with actual malice toward the plaintiff or a conscious, reckless and outrageous indifference to the health, safety and welfare; thata jury only consider awarding punitive damages in a bifurcated process, first determining the appropriate compensatory awards and then only if a judge rules there is competent evidence can a judge then submit the question of punitive damages to a jury; and the first ever cap placed on punitive damages in West Virginia (cannot exceed the greater of four times the amount of compensatory damages or $500,000, whichever is greater).

These changes have been touted as a “tort reform” measure. It is without a doubt that since 2015, the West Virginia legislature has created legislation in an effort for tort reform. However, the punitive damages cap appears to be less like tort reform than other recent measures taken by the West Virginia legislature. Instead, the statutory cap appears to be a measure taken in an effort to codify over a century worth of case law, with the exception of the new burden of proof, on punitive damages by defining what punitive damages are and the amount that is allowable by law. Thus, the statute is an attempt to normalize the award of punitive damages, and also an attempt to make the award of punitive damages somewhat predictable and more uniform on a case-by-case basis.

However, by keeping the low-bar of reckless conduct in order to establish a claim for punitive damages, the West Virginia legislature appears to have balanced the low-bar with a higher standard of proof, shifting from a more-likely-than-not standard to a firm-belief in that the conduct of the defendant warrants an award of punitive damages. Thus, the West Virginia legislature has evened the playing field of the low-bar “recklessness” conduct requirement by requiring a higher standard of proving such conduct.

It is apparent that the West Virginia legislature is in a current groove of enacting more favorable defending against claims in West Virginia. The statute now gives clear direction to lower courts and litigants regarding the conduct needed to be proven for an award of punitive damages and the amount of punitive damages that can be expected when there has been an award of compensatory damages and conduct that meets the standard for punitive damages.

For more information on this article, contact Landon Moyer at lmoyer@fandpnet.com.

 

Delaware Decision Prohibits “Owned-but-Uninsured” Exclusion from Restricting an Insured’s UIM Coverage

Delaware courts continue to refine the case law related to uninsured (“UM”) and underinsured motorist coverage (“UIM”) as codified in 18 Del. C. § 3902. In proceeding with a UIM claim, an insured bears the burden of establishing that a particular loss falls under the coverage provisions of the applicable insurance policy. If met, the burden then shifts to the insurer to establish that a policy exclusion applies to preclude such coverage.

In a recent decision by the Delaware Superior Court, the Court concluded that “owned-but-uninsured” exclusions in insurance policies are invalid as they relate to the availability of UIM coverage. In Jessica Lee v. GEICO Choice Insurance Company, Plaintiff filed a claim for UIM coverage after settlement with a tortfeasor for damages she incurred in a motor vehicle accident. Upon submission of the claim, Plaintiff learned her policy had been canceled prior to the accident for failure to make premium payments. At the time of the collision, Plaintiff resided in the same household as her sister, who had a separate insurance policy with GEICO that also provided for UIM coverage. Plaintiff submitted a claim under her sister’s policy, which was denied by GEICO, and the lawsuit followed.

The Court evaluated Plaintiff ’s claims in the context of prior UIM case law. As Delaware courts have held, UIM coverage is personal to the insured, rather than vehicle-related. The Court first found it to be “undisputed” that Plaintiff qualified as an insured under her sister’s policy, which was defined to include “[r]elatives of [the named insured] if residents of his household.” The burden then shifted to GEICO to establish that the owned-but-uninsured exclusion applied to preclude coverage.

The Court evaluated the nature of UIM coverage as personal to the insured in the context of Frank v. Horizon Assur. Co., which also held other-motor-vehicle exclusions void as against public policy. Unlike Delaware’s no-fault insurance law, 18 Del. C. § 3902 does not include language authorizing the use of exclusions “customary to the field”. The absence of this language led the Courts in Frank and, subsequently, Lee, to conclude that any exclusions and/or restrictions to UIM coverage must be specifically authorized by statute. Furthermore, the Court in Lee held that owned-but-uninsured exclusions are contrary to the public policy behind § 3902, which is “the protection of innocent persons from the negligence of unknown or impecunious tortfeasors.” In light of this holding, the Court said it need not address the coverage status of Plaintiff ’s own vehicle.

Although the Lee decision does not significantly alter the landscape of UIM case law, it underlines Delaware courts’ emphasis on the public policy behind UM/UIM coverage as codified in 18 Del. C. § 3902. As the courts continue to adjudicate cases involving UM/UIM coverage, insurers must be mindful of the expansive nature of the statute and the court’s deference to the protection of insureds who contract for such coverage.

For more information on this article, contact Noelle Torrice at ntorrice@fandpnet.com.