Day on Torts

May 19, 2006

Insurance Cycle Continues to Turn

The property and causalty insurance cycle, understood by everyone except some (but not all) Republican lawmakers, continues to turn.

Insurance company profits are swelling and insurance price increases have come to a virtual halt. Last year premiums rose an average of one-half of one percent and net income increased 12%, despite record catastrophe losses. Surpluses (think “net worth”) in the industry now exceed $427 Billion. The average rate of return on surplus was 10.5%.

This article tells us that one expert predicts that premium growth will slow in 2006 and, in fact, may be less than the rate of inflation. Insurers will have cut prices to maintain premium volume, which will cause underwriting losses. Some degree of underwriting losses are ok (last year the companies paid loss and loss adjustment expenses of $100.90 for every $100 in premium) so long as the companies can earn a decent rate of return on their investments. If they don’t, however, they have to raise rates to maintain profitability. Of course, the companies then will blame those increases on GREEDY TRIAL LAWYERS.

May 18, 2006

Settlement Agreement Enforceable

by The Law Offices of John Day, P.C.

OK, so it is a compromise and settlement of a divorce case. The fact remains that the law of compromise and settlement in Tennessee has been in disarray and the Tennessee Supreme Court has taken a step in the right direction to get it fixed.

In Barnes v. Barnes, No. W2004-01426-SC-R11-CV, ( Filed May 17, 2006) the TSC reversed an appellate court opinion which held that an MDA signed by the parties was not an enforceable agreement. The husband admitted executing the agreement but tried to back out of it two weeks after he signed it.

Read the opinion here.

May 17, 2006

USSC Decide ERISA Subrogation Case

by The Law Offices of John Day, P.C.

The SCOTUS has decided the Sereboff v. Mid Atlantic Medical Services, Inc. case – the long awaited case that was to tell us about an ERISA plan’s right to seek reimbursement of medical payments from a tort recovery.

The Court held that the payments were recoverable.

The case was decided on May 15, 2006. The case number is 05-260.

May 16, 2006

Interesting Article on Punitive Damages

by The Law Offices of John Day, P.C.

Professor Anthony Sebok from the Brooklyn Law School has written an interesting paper on punitive damages.

Here is his abstract of the article:

In this article I argue that the current problem with punitive damages in the United States is not, as is popularly believed, that they are out of control and threatening the orderly function of the tort system. Punitive damages suffer from a different sort of crisis – courts now lack an adequate theory to explain to themselves, lawyers, and litigants the purpose of punitive damages. The argument contains the following steps. First, I illustrate that the dominant rationale in recent years for punitive damages has been efficient deterrence. Second, I argue that the current practice of punitive damages is ill-suited to the achievement of efficient deterrence, which explains why it has been so easy for critics of the tort system to characterize punitive damages as a failed branch of civil litigation. Third, I argue that the remaining significant non-deterrence theories of punitive damages (including the theory developed by the United States Supreme Court in a series of recent decisions) fail to provide an adequate theory of punitive damages. Fourth, I argue that the point of punitive damages can be understood as a form of private retribution, and I use the history of punitive damages in England and the United States as well as the work of the philosopher Jean Hampton to illustrate my point. Fifth, I argue that the theory of punitive damages as “private retribution” – which sounds odd to the modern ear – fits surprisingly well with modern theories of the tort system which view tort law as a system of civil recourse for citizens who have suffered wrongs in private law.

May 15, 2006

Causation in a Criminal Act of Third Party Case

by The Law Offices of John Day, P.C.

Here is a great opinion out of California that does a nice job of handling the “causation” issue in a case against a security guard company that is alleged to have failed to provide proper protection to a c-store employee.

The case is Mukthar v. Latin American Security Company, B183968 (Cal App. 2nd Div. 5/8/06).

An excerpt: “We disagree with the trial court that it is conjectural whether a “security guard could have prevented the attack on the Plaintiff.” The issue is whether it is a question of fact whether the woman would have struck Mukthar in the face, if an armed, uniformed security guard, equipped with a baton and handcuffs, would have stood next to Mukthar. (There is no dispute about the fact that the guard’s station was at the door, where Mukthar was standing when he was struck.) We think the inferences are not evenly balanced on this issue. It is more likely than not that the woman would not have hit Mukthar in the face in the close proximity of an armed guard who had the ready means at hand to respond physically to violence. Be that as it may, it is not for us to decide this question of fact, which is consigned to the trier of fact.”

May 12, 2006

Changes to the Federal Rules of Civil Procedure

by The Law Offices of John Day, P.C.

Yesterday I posted changes to the Federal Rules of Evidence.

Below, in the language of US Courts, are the changes to the Federal Rules of Civil Procedure. Absent action by Congress, the changes are effective December 1, 2006.

Civil Rule 9 (Pleading Special Matters) (conforming amendment pertaining to Supplemental Rule G)

May 11, 2006

Changes to Federal Rules of Evidence

by The Law Offices of John Day, P.C.

The United States Supreme Court has approved changes to several rules of the Federal Rules of Evidence. The changes become effective December 1, 2006 unless Congress votes to overturn them.

Here is the language of the rule changes from the US Courts website:

Evidence Rule 404 (Character Evidence Not Admissible to Prove Conduct; Exceptions; Other Crimes) (clarifies that evidence of a person’s character is never admissible to prove conduct in a civil case)

May 10, 2006

Displinary History of Surgeon Not Admissible at Trial

by The Law Offices of John Day, P.C.

The Nebraska Supreme Court has ruled that plaintiffs could not argue that a surgeon should have disclosed his displinary history unless there was proof that the standard of care required disclosure.

The Court held that plaintiffs “never established that the standard of care required such disclosures. Rather, they ask us to adopt a different standard of care for a narrow class of plaintiffs. Not only is their approach unprecedented, it contravenes the Legislature’s adoption of the professional theory by supplanting, in a single narrow context, the Legislature’s judgment.”

The Court also held that the evidence was not admissible to impeach the defendant.

May 9, 2006

USSC Rules on Medicaid Subrogation Case

by The Law Offices of John Day, P.C.

The USSC has ruled that a state may not enforce its Medicaid lien out of money paid to the plaintiff for losses other than medical expenses. The case is Arkansas Department of Health and Human Services v. Ahlborn, No. 04-1506 (decided May 1, 2006).

Arkansas had a statute that permitted it to have its Medicaid subrogation interest paid out of a tort recovery by the plaintiff. Arkansas took the position that it was paid “off the top,” without regard to whether the money was paid for medical bills or some other compensable loss. That statute was held to be in violation of federal law.

The USSC addressed the issue of the parties potentially setting up an artifical allocation of settlement monies for medical expenses fopr the purposes of defeating Medicaid subrogation. The Court said “[e]ven in the absence of such a post-settlement agreement [about what portion of the settlement proceeds should be allocated to medical expenses], though, the risk that parties to a tort suit will allocate away the State’s interest can be avoided either by obtaining the State’s advance agreement to an allocation or, if necessary, by submitting the matter to a court for decision. For just as there are risks in underestimating the value of readily calculable damages in settlement negotiations, so also is there a countervailing concern that a rule of absolute priority might preclude settlement in a large number of cases, and be unfair to the recipient in others.”

May 8, 2006

Med Mal Fight in Senate Today

by The Law Offices of John Day, P.C.

Senator Frist and his friends are back with another bill to restrict the rights of medical malpractice victims. Here is the bill, known as S.B. 22.

Expect a vote on cloture today or tomorrow.

The legislation includes caps on noneconomic damages, uniform statutes of limitations (except in states that have more pro-provider limits), expert witness rules, collateral source changes, and caps on attorneys’ fees. The bill also enhances Rule 11 sanctions in medical malpractice cases.