Vested Interest - Tort Briefs - September 2000 Issue

$1.2 million awarded in case where township failed to maintain visibility of sign

Sarah Sage, 15, was a passenger in a vehicle driven by John Dragos, a licensed driver for two weeks. Dragos, Sage and two back seat passengers were driving westbound in Erienna Township, Illinois when the driver failed to negotiate a curve. The vehicle struck a tree and broke apart. Sage was ejected from the vehicle, sustained severe brain and spinal trauma and died three days later without regaining consciousness. Sages father sued the driver and Erienna Township, alleging the township failed to maintain the visibility of the curve sign as required by the Illinois Vehicle Code and the Manual on Uniform Traffic Control Devices. Plaintiff settled with the driver for his policy limit of $50,000 in 1997. Prior to trial, Plaintiff demanded $960,000 to settle. The jury awarded $1.2 million to the estate ($500,000 to each parent and $100,000 to each sibling of the deceased). The jury found the driver 75% at fault and the Township 25% at fault. (Press Release)

State offers way for consumers to check up on their doctor

The Illinois Department of Professional Regulation (IDPR) has updated its Web site (www.idfpr.com) so patients can type in their doctors names and find out license information, including disciplinary actions. If the doctor has been disciplined, the site will provide the reason, the punishment and the status of the doctors license. Patients can find information on disciplinary actions against doctors and chiropractors for the past 10 years. Information on dentists can be obtained for the past seven years. The site also offers a record of all other licensed professionals and businesses disciplined since January 1998. (AP - August 22, 2000)

House votes to ease collection of judgment against terrorists

The United States House of Representatives voted July 25 to make it easier for victims of international terrorists to collect judgments they win against nations that sponsor the acts. The measure is now before the Senate. A law passed in 1996 gives victims of terrorism the right to sue a state that the government has found to be a sponsor of terrorism. Courts thus far have awarded $341 million to former AP reporter Terry Anderson, who was held hostage in Lebanon by an Iran-sponsored group, and a total of $327 million to the families of two young Americans killed in a bus bombing in Israel also traced back to Iran. Families of three Americans shot down by Cuban jets were awarded $187 million. None of these judgments have been collected, however, because President Clinton has issued waivers under the law, citing national security, so plaintiffs have been unable to seize the defendant nations assets in this country. This legislation would restrict the presidents authority to issue the waivers. Diplomatic property would still be protected from claims, but commercial property, cash accounts and assets such as rental money could be used to satisfy court judgments. (Liability & Insurance Week - July 31, 2000)

State sues Amoco over leaking tanks

The Illinois Attorney General charged in a suit filed in Cook County Circuit Court on August 2, that Amoco failed to quickly clean up soil and groundwater contamination from leaking underground storage tanks across Illinois. Amoco Oil Co., now BP Amoco PLC, is responsible for 73 incidents of gasoline leaking from underground storage tanks at 61 service stations it owned or operated from June 1991 through October 1997. Once the leaks were discovered, Amoco was late in submitting required written reports to the Illinois Environmental Protection Agency. In addition, the complaint charges, numerous follow-up monitoring reports were not filed in a timely manner. (State Journal Register -August 3, 2000)

Tort deformers and their effort to take away consumer rights

The Center for Justice & Democracy and Public Citizen, released a report July 26 called The CALA Files: The Secret Campaign by Big Tobacco and Other Major Industries to Take Away Your Rights. It provides new detail on the extent of the tobacco industrys past support for locally based, grass roots tort reform groups, most often known as Citizens Against Lawsuit Abuse (CALA). The report refers to a 1993 memo to R.J. Reynolds Tobacco executives from their Washington, DC, law firm which says the budget includes $200,000 contribution to ATRA. This money will be used by ATRA to help underwrite the activities in Texas and California ($100,000 for each state).On tort reform issues, the coalition Philip Morris helped organize Louisiana Citizens Against Lawsuit Abuse led the effort to defeat all trial lawyer-advocated tort proposals in the 1992 regular session, says an interoffice Philip Morris memo from 1992. A 1995 memo listed contributions of $22,000 to Alabama Voters Against Lawsuit Abuse, $34,100 to three similar organizations in Louisiana and lesser amounts to similar groups in other states. Illinois has also been a target with a group called Illinois Lawsuit Abuse Watch being formed recently to augment the efforts of the Illinois Civil Justice League. (Liability & Insurance Week - July 31, 2000)

Philip Morris wont show lawsuit losses right away

When Philip Morris reports its third-quarter results later this year, experts don't expect to see its share of the largest punitive award in history sullying the company's bottom line. The New York-based food and tobacco conglomerate lost the biggest share of the $145 billion smokers punitive damage award, $73.96 billion, but wont show any loss from the verdict on its books, at least for now. Investors so far have not shied away from Philip Morris, pushing shares up 8 percent to $30.62 since the July 14 verdict. (AP - August 7, 2000)

US Appeals Court sets new time limit for ERISA lawsuits

Overturning an earlier decision by the same court, the Ninth U.S. Circuit Court of Appeals has redefined the statute of limitations for bringing suit against an insurer under ERISA. ERISA itself doesn't contain a specific statute of limitations for claims to benefits, leading to various court interpretations. Although a July 26 decision by the full court in Wetzel v. Lou Ehlers Cadillac Group applies directly only to California cases, the provisions of the state insurance code that it interpreted is identical or virtually identical to that of 41 other states. Charles Wetzel was an employee of Lou Ehlers Cadillac in August 1991 when he submitted a claim for long-term disability benefits under a policy from Reliance Standard Life Insurance Co. He said he was totally disabled as a result of stomach pain, diarrhea, headaches, hand tremors and insomnia. Reliance began to pay the benefits, but in August 1992 it informed Wetzel it viewed his claim as psychiatric in nature and thus limited to 24 months of benefits. In August 1993, it discontinued the benefits. Wetzel sued in May 1997, more than three years after it actually did so. A federal judge dismissed the claim on grounds he had exceeded the statute of limitations. Subsequent arguments before the Ninth Circuit, both to a three-judge panel and to an 11-member en banc court, centered on which statute of limitations applied and when it began to run. Discarding a rule it had set forth in 1994 in Nikaido v. Centennial Life Insurance Co., the Ninth Circuit finally decided that ERISA itself says the time began to run from the final denial in 1993 and that he filed suit within the four-year time limit set by the California Code of Civil Procedure. At the same time, it said California Insurance Code Section 10350 generally sets a three-year statute of limitations for claims under disability insurance policies while allowing contracts to set more generous periods with the approval of the insurance commissioner. By this statutory device, California has taken the limitation off the law library shelves and made it a matter of contract, available in the policy itself for review by the insured, the beneficiaries and the insurers claims administrators, Judge Thomas G. Nelson wrote for the court. Because the lower court hadn't heard arguments about whether Wetzel's claim was contractually time-barred, the appellate panel sent the case back. (Liability & Insurance Week - July 31, 2000)

Supreme Court rules in favor of willful and wanton misconduct against units of local government

The Illinois Supreme Court ruled in Kazmierowski v. City of Chicago, that paramedics can be held liable for damages if they fail to locate a patient who calls for help. The court received a lawsuit against the City of Chicago and two paramedics, which alleges a women stricken by an asthma attack called 911 but died after the paramedics sent to her apartment left without treating her. The suit claims her front door was unlocked and that paramedics failed to even try and open it. Previous courts held that the long-standing state immunity provisions granted public agencies protected the paramedics from liability. The Supreme Court has upheld the immunity in most cases, but ruled conduct, defined as intentional or committed as intentional or committed under circumstances that exhibit a reckless disregard for the safety of others, is not protected by immunity. (Chicago Tribune - August 11, 2000)

California says its OK to say your sorry, if your careful

California Governor Gray Davis signed legislation saying that an expression of sympathy for someone who has been injured cannot be used as an admission of liability in a lawsuit, if it is carefully worded and addressed to the right person. Assemblyman Lou Papan, the bills sponsor, said the measure is needed because apologies or other benevolent gestures of sympathy are perceived as tantamount to an admission of guilt. The Democratic Chairman of the Assemblys Banking and Finance Committee, further said lawyers and insurers regularly advise parties to accidents not to express regret or convey an apology, statement of compassion or contrition for fear it will be used against them. As a result, he says, matters that could be settled by an apology and mediation instead wind up in court from motives of revenge. This legislation resembles recently enacted laws and court decisions in Massachusetts and Vermont. (Liability & Insurance Week - July 31, 2000)

Doctors accused of malpractice aid juror who fainted

Three doctors who were defendants in an Ohio medical malpractice case revived a juror who fainted during the trial, leading the judge to declare a mistrial. The judge declared the mistrial, saying the doctors reaction may have led jurors to be prejudiced toward the doctors The judge further said They had seen them act in a very humane way in a situation where they did not have to act at all legally. (AP - August 11, 2000)

Physicians ask Illinois Supreme Court to overturn anomalous med-mal ruling

Physicians sued for professional negligence have asked the Supreme Court to decide whether the jury which ruled in their favor should have been instructed on both contributory negligence and mitigation for the same conduct. In a petition for leave to appeal, the doctors argue that an appeals court decision that a jury should have heard both instructions invites jury confusion, runs contrary to well established law and conflicts with the lower courts own precedent. (Chicago Daily Law Bulletin - August 8, 2000)

California woman's lawsuit reinstated by Appeals Court

The Ninth U.S. Circuit Court of Appeals has reinstated a civil rights lawsuit brought by the family of a woman who was killed by her estranged husband against officers of the county sheriffs department for allegedly failing to enforce restraining orders intended to keep him away from her. Plaintiffs lawyers sued under 42 U.S. Code Sections 1983, which makes those acting under color of law liable for depriving others of their rights. They claimed the Sonoma County officials deprived the plaintiff of her right to equal protection by providing her with inferior protection because of her status as a woman, a latino and a victim of domestic violence. She had complained several times about her husband, who stalked her to houses where she was providing cleaning services before killing her and himself. The Ninth Circuit panel ruled, It is well established that there is no constitutional right to be protected by the state against being murdered by criminals or madmen However, There is a constitutional right to have police services administered in a nondiscriminatory manner a right that is violated when a state actor denies such protection to disfavored persons. (Liability & Insurance Week - July 24, 2000)

State Farm faces state & federal inquiries into paper reviews stemming from Dateline NBC report

Forged doctors names, pre-written medical opinions, a bogus database these elements are among the practices reported by Dateline NBC after a 15-month investigation of Bloomington, Illinois based State Farm Insurance Company. The report by the NBC news newsmagazine focused on the use of independent doctors reports, a key component used by the company to deny medical claims. To compile the report Dateline NBC interviewed more than 250 people, reviewed more than 70,000 pages of documents and examined two companies that State Farm engaged in business. State Farm, the nations largest auto insurer, now faces state and federal investigations into whether outside firms hired to review some of the medical claims filed by State Farms auto insurance policyholders systematically denied or ratcheted down claims payments. State Farm has already paid $1 million to 500 policyholders who may have been adversely affected by utilization reviews. (Liability & Insurance Week - July 31, 2000