Insurance Defense News

MARYLAND: Strict Liability For Pit Bull Bites

noreply@blogger.com (Hartel, Kane, DeSantis & Howie, LLP) — Mon, 30 Apr 2012 19:00:00 +0000

In a recent 4-3 decision the Maryland Court of Appeals has drastically changed the law on the subject of the ownership, control and harboring of certain types of dogs. In the case of Tracey v. Solesky, retired Judge Cathell, writing for the Court, held that dogs of the pit bull breed are inherently dangerous. Consequently, the Court held that a landlord will be strictly liable for any injury caused by a pit bull or pit bull cross-breed, if the landlord knew or should have known of the dog’s presence on the landlord’s property.

“We hold that upon a plaintiff’s sufficient proof that a dog involved in an attack is a pit bull or a pit bull mix, and that the owner, or other person(s) who has the right to control the pit bull’s presence on the subject premises (including a landlord who has the right and/or opportunity to prohibit such dogs on leased premises as in this case) knows, or has reason to know, that the dog is a pit bull or cross-bred pit bull mix, that person is strictly liable for the damages caused to a plaintiff who is attacked by the dog on or from the owner’s or lessor’s premises.”

The Court acknowledged that it was changing the common law that required the landlord have prior knowledge of the specific animal's predisposition to violence. While Prince George’s County has a codified ban on pit bulls, this is the closest Maryland has to state-wide breed specific legislation.

Although the Court indicated that this new law would apply prospectively, the case was remanded to the trial Court for additional evidence on whether the landlord knew, or should have known, about the presence of the pit bull on the property.

The three dissenting judges, noted that the majority failed to provide guidance on what evidence will be sufficient to show that a dog has pit bull ancestry sufficient to impose strict liability, and further noted that there are over 25 breeds that are commonly mistaken as pit bulls.

Maryland Court of Appeals Provides Guidance for First Amendment Protection of Churches Against Civil Lawsuits

noreply@blogger.com (Hartel, Kane, DeSantis & Howie, LLP) — Wed, 25 Apr 2012 15:21:00 +0000

The Maryland Court of Appeals refused to consider further appeals by both parties and thus, the sexual discrimination claim by a former music director against a former pastor at a Gaithersburg church will proceed to back to trial. The Plaintiff had previously won a verdict of $1.35 million in 2005, but the trial judge threw out the verdict based on the ministerial exception. However, Maryland’s highest appellate court determined that the ministerial exception, which bars civil cases, applies only to conduct related to the church’s teachings or ministry, not to “secular beliefs and behaviors.” In other words, sexual harassment is not protected from litigation. On the other hand, the Plaintiff’s other claim against the church for retaliation, based on being forced out after she alleged sexual harassment, remained barred by the ministerial exception. Interestingly, this outcome follows the Court of Appeals’ decision in January that “religious workers” cannot sue for job discrimination because it would unconstitutionally embroil the courts in sectarian matters. Accordingly, there remain unanswered questions involving immunity of churches under the separation of church and state clause in the First Amendment.

VIRGINIA: Bill proposes cause of action for fetal death.

noreply@blogger.com (Hartel, Kane, DeSantis & Howie, LLP) — Mon, 09 Apr 2012 16:51:00 +0000

A new bill, passed by the General Assembly but awaiting the Governor’s approval, effectively creates a new cause of action for fetal death arising from the wrongful acts of other. Senate Bill 674 would modify Virginia Code Sec. 8.01-50, the Wrongful Death Statute. The modified statute would permit the mother, or her personal representative, to bring a suit for the death of an unborn fetus that is “caused by the wrongful act, neglect, or default of any person, ship, vessel or corporation.” Notably, there is no limitation or guidance on the proof necessary to show the causal connection between the actor and the fetal death. While Virginia’s cap on damages in medical malpractice cases would encompass both the fetal death claim, and the mother’s emotional distress claims, the broad language of the statute is expected to generate substantial litigation in the medical malpractice arena. Governor Bob McDonnell has until April 9, 2012 to act on the proposed legislation.

VIRGINIA: Parked van was not in “use” as a vehicle, so there is no insurance coverage

noreply@blogger.com (Hartel, Kane, DeSantis & Howie, LLP) — Tue, 20 Mar 2012 19:56:00 +0000

In State Farm Mutual Insurance Co. v. Virginia Farm Bureau Mutual Insurance Co., et al., the U.S. Court of Appeals for the Fourth Circuit found that a fire started by equipment stored in the back of a parked car was unrelated to the use of the car and not covered by an auto insurance policy. The policy covered “‘property damage’ arising out of the ownership, maintenance, [or] use” of a covered vehicle. The Court found that:

“As a matter of well-settled Virginia law, to constitute ‘ownership or use’ of a vehicle for purposes of insurance coverage ‘there must be a causal relationship between the accident and employment of the insured motor vehicle as a vehicle.’ State Farm Mut. Auto. Ins. Co. v. Powell, 318 S.E.2d 393, 397 (Va. 1984) (emphasis added).”

Since the van in this case had been used as a storage shed, the court found that the accident did not arise out of the vehicle’s “use.”

FEDERAL: Change in Removal Statute

noreply@blogger.com (Hartel, Kane, DeSantis & Howie, LLP) — Fri, 16 Mar 2012 19:08:00 +0000

Federal law has long permitted defendants in State court lawsuits the option to file a notice to remove an action and have the matter heard in Federal court in certain circumstances. If the Federal court has original jurisdiction over the subject matter either based on Federal question jurisdiction or diversity jurisdiction, and the notice is timely filed, the matter may be removed to Federal court. 28 U.S.C. 1331 (Federal Question) and 28 U.S.C. 1332 (Diversity).

On January 6, 2012, H.R. 394, also known as the Federal Courts Jurisdiction & Venue Clarification Act, went into effect. The Act makes a number of modifications to the existing removal statute. One of these modifications clarifies an ambiguity in the prior statute related to who can file for removal. The new Act provides that in 28 U.S.C. 1446(2)(B): “Each defendant shall have 30 days after receipt by or service on that defendant of the initial pleading or summons described in paragraph (1) to file notice of removal.” The earlier served defendants are also permitted to consent to removal despite not exercising their right within the thirty days. The Act limits this removal by requiring that the removal be noted within 1 year after the commencement of the action, unless the plaintiff is found to have acted in bad faith.

This addresses the prior split in the Circuits, where some courts had held that later served defendants did not have the right to remove the action even if they were brought into the case after the expiration of the first 30 days after service of the first defendant. As such, in those Circuits, plaintiffs could serve a defendant who was unlikely to remove a matter to federal court, let the 30 days expire and then serve other defendants who would thereafter be stuck in the State court. The Act effectively provides the same rights to each defendant, regardless of when they first become involved in the state litigation.

VIRGINIA: Supreme Court of Virginia allows Plaintiff attorneys to specify fixed numerical values for damages during closing arguments

noreply@blogger.com (Hartel, Kane, DeSantis & Howie, LLP) — Fri, 16 Mar 2012 18:44:00 +0000

In the recent case of Wakole v. Barber, Record No.102176 (March 2, 2012), the Supreme Court of Virginia held that a trial court did not err in allowing a Plaintiff’s attorney in a personal injury action to argue in closing that each item of damages sought is separate and has a fixed numerical value. In reaching its decision, the Court distinguished its holding in Certified T. V. & Appliance Co. v. Harrington, 201 Va. 109, 114 (1959), where the Court barred the use by a Plaintiff’s attorney of mathematical formulas to calculate per diem losses to his client. The Court compared these two cases and noted that the attorney in Wakole did not attempt to calculate damages based on formulas, but merely presented a fixed number based either on a medical bill or on what his client believed would fairly compensate her for her losses. The jury’s role, therefore, as the ultimate arbiter of evidence, was not invaded because the attorney did not present anything that was not either in evidence already or reflective of a number that would “fully or fairly compensate the plaintiff for damages suffered as a result of the defendant’s negligence.” Wakole, at 7.

The Court’s formal holding is that “as long as there is evidence to support an award of non-economic damages, plaintiff is allowed to break the lump sum amount into its component parts and argue a ‘fixed amount’ for each element of damages claimed as long as the amount is not based on a per diem or other fixed basis.” Id. At 8.

FEDERAL COURTS: Rule Change On Expert Discovery

noreply@blogger.com (Hartel, Kane, DeSantis & Howie, LLP) — Wed, 14 Mar 2012 14:05:00 +0000

In December 2010 the Federal Rules Committee revised Federal Rule of Civil Procedure 26, also known as the Expert Rule. Before the change, the language of the rule required that a party disclose "all information" reviewed by an expert who the party intended to call as a witness at trial. "All information" included communications between the party's attorney and the expert. In some cases, this drove the party's attorney to hire a consulting expert which the attorney would use as a resource but which was not intended to be identified as an expert. In this way, the attorney could gain the benefit of the consulting expert's assistance without having to disclose "all information" about that assistance.

The 2010 change to Rule 26 requires that the expert discloses the "facts and data" considered by an identified expert, and no longer requires disclosure of "all information." Unless the party's attorney provides data to the identified expert, or states assumption upon which the identified expert's opinions are based, the communications between the party's attorney and the identified expert are generally not within the scope of "facts and data", and therefore the party's attorney is not required to reveal those communications to the other parties.

This Rule change also includes explicit protection for an expert's draft reports. Although an identified expert must produce a report to comply with Rule 26, the party which identified the expert is not required to disclose copies of the expert's draft reports, which are now specifically protected by the Rule.

MARYLAND: Did you know? The Maryland MVA acts as the agent for all non-resident drivers.

noreply@blogger.com (Hartel, Kane, DeSantis & Howie, LLP) — Thu, 08 Mar 2012 15:06:00 +0000

One of the most difficult challenges a plaintiff faces in suing an out-of-state driver is locating that person in order to serve him or her with a summons and complaint. Maryland Code, Courts & Judicial Proceedings, § 6-313, streamlines that process by having the MVA act as the nonresident driver's local representative for legal purposes.

Section 6-313 allows a Plaintiff to simply serve the Motor Vehicle Administration in lieu of attempting service of nonresidents by private process. The law is founded on the nonresident's "privilege to drive a motor vehicle in the State." As a result of enjoying the privilege, "a nonresident irrevocably appoints the Motor Vehicle Administration as agent to receive a subpoena, a summons, or other process," so long as the process is related to "an accident or collision involving a motor vehicle driven by the nonresident driver and in which the nonresident driver is named as a party," and is "[d]irected to the nonresident driver." The MVA will then attempt to serve the nonresident driver with process by certified mail and provide the Plaintiff with a certification concerning its success or failure. Either way, by charging the MVA with the burden of achieving service outside of the state, a Plaintiff circumvents the difficulties inherent in achieving service in a far-flung and unfamiliar locale. Unlike traditional service of process, so long as the party seeking service provides the MVA with a summons, a fee, and "a certification of the last known address of the nonresident driver," service is achieved.

VIRGINIA: Knowledge of Inclement Weather Not Necessarily Constructive Notice of a Dangerous Wet Floor

noreply@blogger.com (Hartel, Kane, DeSantis & Howie, LLP) — Wed, 29 Feb 2012 14:30:00 +0000

In the recent memorandum opinion in the United States District Court case of Logan v. Boddie-Noell Enters. Inc., No. 4:11cv00008, (W.D. Va. Jan. 18, 2012), the Court held that inclement weather conditions did not put a restaurant owner on constructive notice of a dangerous condition and did not provide a sufficient basis for the Plaintiff to defeat the Defendant’s motion for summary judgment. The Court granted the Defendant’s motion for summary judgment based on lack of primary negligence and also based on the Plaintiff’s contributory negligence as a matter of law.

In this premises liability case, the Plaintiff slipped on water at a Hardee’s restaurant. The water had been tracked in by customers on a very snowy morning. The Plaintiff, well aware of the snow, failed to examine the floor of the restaurant before stepping onto a wet spot, slipped, broke her ankle, and sued. The Defendant moved for summary judgment, and Judge Kiser granted that motion. The Judge reasoned that, to defeat the Defendant’s motion, the Plaintiff must be able to show that the Defendant store owner “had actual or constructive notice of the presence of” an unreasonably dangerous condition which caused the Plaintiff to fall. Logan at 14. Judge Kiser reasoned that the “guiding factor in determining whether the owner had constructive notice is the length of time that the condition existed.” Id. (citing Winn-Dixie Stores, Inc. v. Parker, 240 Va. 180, 184 (1990). Interpreting Ashby v. Faison & Associates, Judge Kiser determined that “mere notice of weather conditions that could foreseeably cause the unsafe condition is insufficient to establish constructive notice of the unsafe condition itself.” 247 Va. 166, 170-171 (1994). The Plaintiff had no other sufficient evidence of notice, and therefore summary judgment was appropriate. Judge Kiser also concluded that the Plaintiff was contributory negligent in failing to “look out for water deposited by other customers,” despite being “aware of the inclement weather.” Loganat 21. In so ruling, the Judge acknowledged that the Virginia Supreme Court employs a “totality of the circumstances” test in determining whether such a condition is open and obvious dangerous condition, but the Judge concluded that the water was an open and obvious dangerous condition in the context of the facts of the case.

VIRGINIA: Virginia Code § 8.01-417.C - Requiring Disclosure of Insurance Limits

noreply@blogger.com (Hartel, Kane, DeSantis & Howie, LLP) — Sat, 04 Feb 2012 00:00:00 +0000

Virginia Code § 8.01-417.C. requires a liability insurer to reveal its liability limits even before suit is filed in some circumstances. Specifically, where the medical bills and wage losses equal or exceed $12,500 and the claimant provides necessary information the liability insurer must disclose the limits of liability. That statute provides:

C. After he gives written notice that he represents an injured person, an attorney, or an individual injured in a motor vehicle accident if he is not represented by counsel, may, prior to the filing of a civil action for personal injuries sustained as a result of a motor vehicle accident, request in writing that the insurer disclose the limits of liability of any motor vehicle liability or any personal injury liability insurance policy that may be applicable to the claim. The requesting party shall provide the insurer with the date of the motor vehicle accident, the name and last known address of the alleged tortfeasor, a copy of the accident report, if any, and the claim number, if available. The requesting party shall also submit to the insurer the injured person's medical records, medical bills, and wage-loss documentation, if applicable, pertaining to the claimed injury. If the total of all such medical bills and wage losses equals or exceeds $ 12,500, the insurer shall respond in writing within 30 days of receipt of the request and shall disclose the limits of liability at the time of the accident of all such policies, regardless of whether the insurer contests the applicability of the policy to the injured person's claim. Disclosure of the policy limits under this section shall not constitute an admission that the alleged injury or damage is subject to the policy. Information concerning the insurance policy is not by reason of disclosure pursuant to this subsection admissible as evidence at trial.

DC: Injured Party's Time Restriction After a Worker's Comp Award

noreply@blogger.com (Hartel, Kane, DeSantis & Howie, LLP) — Thu, 02 Feb 2012 22:36:00 +0000

D.C. Code Section 32-1535 addresses Worker’s Compensation liens arising from injuries caused by a third-party. Paragraphs (a) and (b) of that section state that:

“(a) If, on account of a disability or death for which compensation is payable under this chapter, the person entitled to such compensation determines that some person other than those enumerated in Section 32-1504(b) is liable for damages, he need not elect whether to receive such compensation or to recover damages against such person.

(b) Acceptance of such compensation under an award in a compensation order filed with the Mayor shall operate as an assignment to the employer of all rights of the person entitled to compensation to recover damages against such third person unless such person shall commence an action against such third person within 6 months after such award.”

Section 32-1501: Definitions, provides the following additional information:

“(8) ‘Disability’ means physical or mental incapacity because of injury which results in the loss of wages.”

...

“(12) ’Injury’ means accidental injury or death arising out of and in the course of employment, and such occupational disease or infection as arises naturally out of such employment or as naturally or unavoidably results from such accidental injury, and includes an injury caused by the willful act of third persons directed against an employee because of his employment.”

The court in Wash. Post v. D.C. Dep't of Empl. Servs., 853 A.2d 704, 706-707 (D.C. 2004) stated that “a claimant is disabled when she suffers a compensable injury, arising out of and in the course of employment, and suffers a resulting wage loss.” While injury is a medical condition, disability is an economic condition. The case law does not indicate if there must be an official “finding” of disability, or simply an award that includes compensation for wage loss.

Consequently, a disabled party's action against the tortfeasor may be barred by this "secondary" statute of limitations if the action is brought more than six months from the date of a worker's compensation award. See Biratu v. BT Vermont Ave., LLC, 962 A.2d 261 (D.C. App. 2008). After that six month period, only the employer retains the right to bring an action against the tortfeasor. In either case, the three year DC statute of limitations for tort actions will still apply to the underlying cause of action, including to the statutorily assigned interest held by the employer.

MARYLAND: Mandatory Minimum Insurance Change

noreply@blogger.com (Hartel, Kane, DeSantis & Howie, LLP) — Wed, 01 Feb 2012 14:26:00 +0000

More than a year ago Maryland’s minimum motor vehicle liability insurance limits for bodily injury or death increased to $30,000 per person and $60,000 per accident. Maryland Transportation Code § 17-103 was amended, effective January 1, 2011, to require these higher limits for all motor vehicle liability insurance policies issued, delivered, or renewed in the State on or after January 1, 2011. § 17-103 now provides:

§ 17-103. Form and minimum benefits of security; annual assessment

   (a) Required form; annual assessment. --

   (1) Except as provided in paragraph (2) of this subsection, the form of security required under this subtitle is a vehicle liability insurance policy written by an insurer authorized to write these policies in this State.

   (2) The Administration may accept another form of security in place of a vehicle liability insurance policy if it finds that the other form of security adequately provides the benefits required by subsection (b) of this section.

   (3) The Administration shall, by regulation, assess each self-insurer an annual sum which may not exceed $ 750, and which shall be used for actuarial studies and audits to determine financial solvency.

(b) Required minimum benefits. -- The security required under this subtitle shall provide for at least:

   (1) The payment of claims for bodily injury or death arising from an accident of up to $ 30,000 for any one person and up to $ 60,000 for any two or more persons, in addition to interest and costs;

   (2) The payment of claims for property of others damaged or destroyed in an accident of up to $ 15,000, in addition to interest and costs;

   (3) Unless waived, the benefits described under § 19-505 of the Insurance Article as to basic required primary coverage;

   (4) The benefits required under § 19-509 of the Insurance Article as to required additional coverage; and

   (5) For vehicles subject to the provisions of § 25-111.1 of this article, the security requirements adopted under 49 C.F.R., Part 387.

Virginia: Will the Court of Appeals be abolished?

noreply@blogger.com (Hartel, Kane, DeSantis & Howie, LLP) — Tue, 24 Jan 2012 21:05:00 +0000

Senator Deeds of the Virginia General Assembly has introduced a bill which would abolish the Virginia Court of Appeals. If the bill becomes law, the Court of Appeals will be abolished effective October 1, 2012, and the Supreme Court will again have authority to hear appeals of criminal, traffic, administrative, and domestic matters. The bill will be referred to the Senate Courts Committee.

MARYLAND: Proposed Bill to Include Property Damage Estimates in Section 10-105

noreply@blogger.com (Hartel, Kane, DeSantis & Howie, LLP) — Wed, 18 Jan 2012 14:48:00 +0000

Since 1997, Maryland Courts and Judicial Proceedings, § 10-105 has made it easy on plaintiffs in the District Court (and sometimes in the Circuit Court) to prove claims for repair of vehicles damaged in accidents. In relevant part Section 10-105 provides:

(b) In general. --

(1) (i) Subject to the provisions of this section, a paid bill for goods or services is admissible without the testimony of the provider of the goods or services as evidence of the authenticity of the bill for goods or services provided and the fairness and reasonableness of the charges of the provider of the goods or services.

However, Section 10-105 currently applies only to actual bills that have actually been paid. Thus, Section 10-105 does not currently apply to property damage estimates.

However, Maryland State Senator Zirkin recently proposed Senate Bill 80 which, if enacted, will broaden Section 10-105 to allow an estimate prepared by an insurer or its authorized representative to be admitted into evidence, after proper basic testimony. This change would allow judges to consider estimates without the necessity of testimony of the individual who prepared the estimate or another expert, and without the necessity of proof that the Claimant had already paid for the repairs.

Senate Bill 80 had its first reading on January 16, 2012, which is the first step on the path to passing the bill into legislation.

VIRGINIA: Drivers Ticketed for Charge That Does Not Exist

noreply@blogger.com (Hartel, Kane, DeSantis & Howie, LLP) — Thu, 05 Jan 2012 22:31:00 +0000

Virginia lawyers have uncovered a disturbing trend -- drivers convicted of an offense that is not a crime under state law. In some localities, police have been charging drivers with “driving without proof of insurance” despite the fact that there is no law requiring a vehicle operator to carry such proof. A bill that would require drivers to carry proof of insurance has been debated by the General Assembly three times, but it was never passed.

In fact, Virginia does not even require drivers to possess car insurance. Drivers can either insure their car or pay a $500 uninsured motor vehicle fee. Failure to do either is a misdemeanor, but is only punishable by fines up to $500. A Lynchburg lawyer stopped in Sussex County on Labor Day 2011 is challenging a charge of not having proof of insurance, but the judge has not yet ruled on the case.

For more information visit:

- “A Charge that’s not a crime: Driver’s ticketed for ‘driving without proof of insurance,’” Peter Vieth, Virginia Lawyers Weekly, December 19, 2011.

- “Lawyer Readies for Battle over ‘no insurance card,’” Peter Vieth, Virginia Lawyers Weekly, December 19, 2011. [Login required/Pay wall]

Maryland: “First Named Insured” Under Insurance Article Section 19-510 Is To Be Defined By Each Policy

noreply@blogger.com (Hartel, Kane, DeSantis & Howie, LLP) — Thu, 29 Dec 2011 18:06:00 +0000

Maryland’s Court of Special Appeals recently issued its opinion in Swartzbaugh v.Encompass Insurance, addressing the statutory definition of “first named insured” as used in Insurance Article Section 19-510, and addressing its applications to waivers of uninsured motorist coverage.

When an insurer in Maryland issues a policy of automobile liability insurance, the insurer must also offer the named insured uninsured motorist coverage. The insured may elect to waive uninsured motorist coverage in any amount above the minimum statutory insurance coverage of $30,000 stated in Transportation Article Section 17-103. However, this waiver must be made in writing, and must be elected by the “first named insured.” Unfortunately for anybody trying to understand these matters, “first name insured” is not defined by the statute.

In Swartzbaugh, the insured argued that a UM waiver is not valid unless the person identified first on the policy declaration sheet signs the waiver. The Court reviewed the legislative history and held that since the statute does not contain a definition, and the legislative history does not provide a specific definition, the term “first named insured” is to be defined by the policy itself. The Court of Special Appeals stated that the “first named insured” is the person identified by the policy as the first named insured. In those instances where the policy fails to identify the first named insured, the Court will look to other documents related to the coverage to identify the individual. In Swartzbaugh, the Court relied heavily on the waiver form’s language which stated that the signer was “the first named insured.” By incorporating this language into the otherwise silent policy, whoever signed the waiver form was, by default, the “first name insured” for the policy involved in the Swartzbaugh case.

Medicare attempts to streamline settling claims with potential future care.

noreply@blogger.com (Hartel, Kane, DeSantis & Howie, LLP) — Fri, 02 Dec 2011 22:12:00 +0000

In those cases where Medicare may have a claim for future treatment arising from a third-party’s actions, CMS has recently created new procedure to streamline the process of closing a claim. As noted in its September 29, 2011 policy memorandum, CMS will now consider its interest for future medical expenses satisfied if the treating physician prepares a written certification stating that the patient/claimant has completed treatment for the alleged injury related to the liability insurance settlement and that future medical treatment will not be required. The memorandum states:

Where the beneficiary’s treating physician certifies in writing that treatment for the alleged injury related to the liability insurance (including self-insurance) ‘settlement’ has been completed as of the date of the ‘settlement,’ and that future medical items and/or services for that injury will not be required, Medicare considers its interest, with respect to future medicals for that particular ‘settlement,’ satisfied. If the beneficiary receives additional ‘settlements’ related to the underlying injury or illness, he/she must obtain a separate physician certification for those additional ‘settlements.’

While this certification must be obtained for each separate settlement, the claimant is not required to submit the certification to CMS, but is merely “encouraged” to maintain the certification. The memorandum states:

When the treating physician makes such a certification, there is no need for the beneficiary to submit the certification or a proposed LMSA amount for review. CMS will not provide the settling parties with confirmation that Medicare’s interest with respect to future medicals for that ‘settlement’ has been satisfied. Instead, the beneficiary and/or their representative are encouraged to maintain the physician’s certification.

The Old Dominion May Join 48 Other States in Adopting Rules of Evidence

noreply@blogger.com (Hartel, Kane, DeSantis & Howie, LLP) — Fri, 25 Nov 2011 21:27:00 +0000

The Virginia Supreme Court recently approved Rules of Evidence for practice in the courts of the Commonwealth. Virginia had been one of two hold-outs, the other being Massachusetts, in not having codified Rules of Evidence. The rules are based on case law and standard practice throughout Virginia and is not likely to make any substantive changes. The goal is to streamline evidentiary issues for judges and practitioners. The Supreme Court has submitted the rules to the Virginia Code Commission, and the rules will go into effect if approved by the Virginia legislature. Chief Justice Cynthia D. Kinser has asked that the legislature pass the rules on an up or down vote rather than tinkering rule by rule. The rules are expected to be before the General Assembly in the 2012 session.

MARYLAND: Insurance Companies Must Disclose Policy Limits.

noreply@blogger.com (Hartel, Kane, DeSantis & Howie, LLP) — Sat, 22 Oct 2011 20:21:00 +0000

On October 1, 2011 a new Maryland law went into effect that requires insurance companies to provide the details of automobile policy limits of coverage under certain circumstances. The new law, codified in Maryland Code Annotated, Court’s and Judicial Proceedings Article, Sections 10-1101 thru 10-1105, require that an insurance company disclose the policy limits within thirty (30) days after a written request has been filed by the injured party in those situation in which the claim involves a death or injuries that result in at least $12,500.00 in bills or loss wages cumulatively. This law requires that the requesting person provide a substantial amount of information including the date of the accident, a copy of any police report that may have been generated, and all lost wage and medical documentation.

Federal Removal on Diversity Jurisdiction: Resident Defendants

noreply@blogger.com (Hartel, Kane, DeSantis & Howie, LLP) — Thu, 18 Aug 2011 18:57:00 +0000

When a plaintiff domiciled in one state files a lawsuit in state court against a defendant domiciled in a different state, the defendant’s lawyer can generally “remove” the case to federal court (pursuant to 28 U.S.C. §§ 1441, 1332 & 1446) if the amount in controversy exceeds $75,000. The federal courts’ jurisdiction over such cases is called “diversity jurisdiction.” Removal to federal court can sometimes be in the interest of the defendant for various reasons. However, the federal courts recognize an important limitation on defendants’ ability to remove cases to federal court based on “diversity jurisdiction” of the federal courts. That limitation is that a state court lawsuit “shall be removable only if none of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought.” Therefore, a defendant in a Maryland state court case cannot remove the case to the federal court if any defendant is domiciled in Maryland. As an illustration, if Bob Badbreak of Pennsylvania sues Ned Negligent of Virginia in the Circuit Court for Baltimore City, Maryland for $500,000, Ned can remove the case to the United States District Court for the District of Maryland. However, were Ned to be domiciled in Maryland rather than in Virginia, Ned could not remove the case to federal court.

Adjusters should also keep in mind that the deadline for a defendant’s attorney to file the “removal” documents necessary to remove a case to federal court is 30 days from the date on which the defendant receives, through service or otherwise, a copy of the initial pleading setting forth the claims on which an action is based (pursuant to 28 U.S.C. § 1446) . This short time frame is another reason why adjusters should be very careful to get new lawsuits into the hands of defense counsel quickly, even in situations in which the insured may not have been served yet.

VIRGINIA: LEO 1858 has been approved.

noreply@blogger.com (Hartel, Kane, DeSantis & Howie, LLP) — Thu, 11 Aug 2011 13:51:00 +0000

On 5-16-11, we blogged about proposed Legal Ethics Opinion 1958. By Committee Opinion dated July 27, 2011, the Virginia State Bar’s Standing Committee on Legal Ethics has approved Legal Ethics Opinion 1858, which answers the following two questions in the negative:

1. May a plaintiff’s lawyer agree to indemnify a defendant and/or his insurer for any third-party lien claim against settlement proceeds received by the plaintiff?

2. May the defendant’s counsel request or demand such an indemnification agreement as a condition of settlement?

With regard to the first question, the Committee opined that “the plaintiff’s lawyer may not agree to indemnify the defendant’s insurer for future claims resulting from the plaintiff’s failure to pay liens which he was obligated to pay from the settlement proceeds.” The Court reasoned any such indemnification would be in violation of Rule 1.8(e) which prohibits a lawyer from paying his client’s debts, and would create a conflict of interest between the plaintiff and his lawyer pursuant to Rule 1.7(a).

With regard to the second question, the Committee opined that a defendant or insurer cannot even request indemnification because “[t]he insurer’s lawyer’s insistence that the plaintiff’s lawyer enter into this indemnification agreement, as a condition to settlement, is an inducement to the plaintiff’s lawyer to violate Rules 1.7(a) and 1.8(e).”

The Committee’s opinion concludes with this sentence: “This opinion is advisory only based upon the facts as presented, and not binding on any Court or tribunal.”

VIRGINIA: Can a Plaintiff’s recovery exceed her ad damnum?

noreply@blogger.com (Hartel, Kane, DeSantis & Howie, LLP) — Wed, 03 Aug 2011 14:54:00 +0000

The Supreme Court of Virginia has agreed to take the appeal of a plaintiff who obtained a jury verdict in excess of her ad damnum. The Plaintiff, Ava Blount, was injured in a fall at a hotel in 2008. She sued, and the jury awarded her a verdict of $3.1 million. Unfortunately for her, she had sued for only $500,000. On post trial motions, the trial judge refused to allow the Plaintiff to increase her ad damnum. She appealed, and the Supreme Court has taken the appeal. Thus, we should soon have guidance regarding the circumstances under which a Plaintiff may be allowed to recover a verdict in excess of her ad damnum.

DC: Supplement to the Zone of Danger: Relationship-Undertaking in Emotional Harm Cases

noreply@blogger.com (Hartel, Kane, DeSantis & Howie, LLP) — Fri, 29 Jul 2011 04:15:00 +0000

Recently the District of Columbia Court of Appeals issued the decision in Hedgepeth v. Whitman Walker Clinic, et al., which greatly departed from the District of Columbia’s long standing “zone of danger” analysis for negligent infliction of emotional distress cases.

In Hedgepeth, the Plaintiff was tested for AIDS at a local clinic. The testing staff member erroneously noted that his tests were HIV positive, and the blood work was sent for an independent test. Due to another error by the independent laboratory, the blood was reported as HIV positive. The Plaintiff was asymptomatic and was told that he did not need medications, but over the next 5 years he began to suffer from severe depression, lost his job, and eventually began using illegal drugs. After beginning a physical relationship with a woman who actually had AIDS, he was tested again and it was confirmed that he did not have HIV.

The trial court granted summary judgment on behalf of the Defendants because the underlying facts could not satisfy the established “zone of danger” standard. Ironically, due to the fact that the Plaintiff was never actually in danger of physical harm, because he did not have AIDs or HIV, his claim failed as a matter of law. The Plaintiff appealed and explicitly requested that the Court either abandon the “zone of danger” standard or create a major exception to it.

In the Court of Appeals’ en banc review of the affirmation of the trial Court’s holding, the Court acknowledged that the “zone of danger” analysis did not fit the underlying facts, but also agreed that this sort of injury was compensable. Adopting the Plaintiff’s proposed standard, the Court held that recovery in negligence should also be permitted where the Defendant “has a relationship or has committed to an undertaking the plaintiff of such nature that the negligent performance of a legal obligation to the plaintiff is very likely to cause serious harm, and, in fact, does so.” The Court elaborated that the undertaking must be of the type that makes serious emotional injury especially likely, not just foreseeable. The Court also provided examples of the type of relationships where the Court could foresee this supplemental rule being applied: surgeon-patient; hospital-patient; therapist-patient; mortuary-client; restaurant-patron; business-invitee; employer-employee (discrimination/sexual harassment); defamer-victim; tortfeasor-spouse (loss of consortium); guardian-ward; and more generally relationships in which one person is in a position of power or authority over the other and therefore has a greater potential to inflict emotional harm. In determining whether there was a breach of the duty, the Court noted that consideration should be given to numerous factors, including the statutory, professional, and ethical standards applicable to the defendant’s activities.

VIRGINIA: Civil Jury Trials Are On The Decline:

noreply@blogger.com (Hartel, Kane, DeSantis & Howie, LLP) — Wed, 27 Jul 2011 19:15:00 +0000

In 2000, there were 1,514 civil jury trials in Virginia. In 2009, that number declined 61 percent to only 592. Now that the jurisdictional limit of the General District Courts has been increased from $15,000 to $25,000, there will probably be even fewer Virginia civil jury trials in the future. Query whether the plaintiffs are settling for too little, the defendants are settling for too much, or something else is causing litigants to resolve their cases short of jury selection.

New U.S. Senate Bill to Curb Warrantless GPS Tracking

noreply@blogger.com (Hartel, Kane, DeSantis & Howie, LLP) — Sun, 26 Jun 2011 15:31:00 +0000

Currently, the courts throughout the country of divided on the legality of a regularly conducted police practice: tracking people through their GPS devices without a warrant. Many modern devices, including phones, tablet computers, and the dashboard GPS systems, can provide geo-location data to those who know how to obtain it. This information can provide police with near constant location data for an individual.

A new Bill (EAS11417), co-sponsored by Senator Ron Wyden, an Oregon Democrat, and Representative Jason Chaffetz, a Utah Republican, would require that police obtain a warrant prior to obtaining tracking information. The bill would also prohibit any individual or corporation from divulging such information without court order, and would criminalize the development of apps that secretly track a GPS user.

The bill is supported by many communication organizations, but is opposed by some law enforcement organizations. The bill is in its early stages, and will likely be modified before being voted upon.