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Victory Against
St. Luke’s Affirmed
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Litigation Matters
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Featured Litigation Matters:
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Noneconomic
Damages Cap
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M A R C H ,
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TREASURE VALLEY HOSPITAL, ST. ALPHONSUS,
AND GOVERNMENT PLAINTIFFS PREVAIL:
NINTH CIRCUIT SUPPORTS UNWINDING OF
ST. LUKE’S/SALTZER MERGER
On February 10, 2015, the Ninth Circuit Court of Appeals
affirmed that St. Luke’s and Saltzer Medical Group must unwind
their 2012 merger because it violated anti-trust laws.
—and—
Accounting for
Health Insurer
Adjustments
Avoiding Exposure
to Attorney Fees in
T
V O L U M E
INSIDE THIS
ISSUE:
Applying the
P
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First-Party Claims
Idaho’s New
Seatbelt Defense
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Nicole L. Cannon
Named Shareholder
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Raymond D. Powers
Ray Powers represented Treasure Valley Hospital in the highly
publicized case against St. Luke’s in 2013. In a six-week trial, Mr.
Powers and attorneys for St. Alphonsus Regional Medical Center, the
State of Idaho, and the Federal Trade Commission persuaded Judge
B. Lynn Winmill that St. Luke’s acquisition of Saltzer Medical Group
violated anti-trust laws by diminishing competition in the Nampa
primary care market, likely resulting in increased healthcare costs.
In January 2014, Judge Winmill ordered St. Luke’s and Saltzer to
unwind the merger. St. Luke’s and Saltzer appealed, arguing that
there was insufficient evidence of anti-trust violations and that St.
Luke’s should not have to divest itself of Saltzer.
Affirming Judge Winmill’s decision, the Ninth Circuit Court of
Appeals found that the plaintiffs met their burden of proof, and that
St. Luke’s failed to prove its defense that the merged entity would
deliver such efficient care that it would enhance competition, rather
than hinder it. The Court rejected St. Luke’s argument that
anticipated improvements in patient services counteracted the
merger’s anticompetitive effects, stating that anti-trust laws do not
“excuse mergers that lessen competition or create monopolies simply
because the merged entity can improve its operations.” Importantly,
the Court found that divestiture was the appropriate remedy,
meaning that St. Luke’s and Saltzer will be required to comply with
Judge Winmill’s order to unwind the merger.
This publication is intended for general information purposes only and does not constitute legal advice. Readers may consult with any of the
attorneys at Powers Tolman Farley, PLLC, to determine how laws, suggestions, and illustrations apply to specific situations.
POWERS
TOLMAN
FARLEY,
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POWERS TOLMAN FARLEY, PLLC
LITIGATION MATTERS
Zachary J. Thompson
2014 – Ray Powers recently defended an insured in a jury trial on the issues of liability and damages related to a motor
vehicle accident. In a case of admitted liability by the defendant, the jury assessed 25 percent negligence to the plaintiff
for being distracted through the use of her cell phone at the time of the accident and not being able to avoid the accident-
Steven K. Tolman
Nicole L. Cannon
Donald J. Farley
Mark J. Orler
March 2014 — Steve Tolman and Nikki Cannon obtained a directed verdict
for their client, an emergency room physician, in a medical malpractice case
involving a suspected carotid dissection in a patient who subsequently had
several strokes. The plaintiffs made a seven-figure pre-trial settlement demand. At trial, the plaintiffs attempted to prove causation through a circumstantial chain of events, and failed to present expert witness testimony on the
issue of causation. At the close of the plaintiffs’ case-in-chief, the defense
moved for a directed verdict on the basis that determining causation involved
medical questions outside the scope of the lay jury’s knowledge or understanding and, therefore, the plaintiffs were required to offer expert witness
testimony on causation to prove their case. The court agreed, granting a directed verdict for the defense and awarding costs and attorney fees.
April 2014 — At the trial of a personal injury claim, in which the defendant
admitted negligently changing lanes on the freeway, Ray Powers successfully
defended the case on the issues of causation and damages. The plaintiff
claimed that trauma from the accident caused her to undergo spine surgery.
At trial, the jury flatly rejected the plaintiff's treating surgeon’s opinion that
the accident caused the need for spine surgery. The jury also found the
plaintiff was distracted by use of her cell phone and was 25% at fault for the
accident. The jury’s verdict awarded the plaintiff only $7,000 in economic
damages, and awarded no general damages. After accounting for the defendant’s offer of judgment of $50,000 and costs, the court entered judgment for
only $144.
June 2014 — Don Farley and Mark Orler won a number of pretrial motions
in the defense of a trucking accident case, preventing the plaintiffs from asserting a claim for punitive damages. The plaintiffs moved to amend their
complaint to assert a punitive damages claim against the motor carrier defendant. On a defense motion, the court struck several key opinions of the
plaintiffs’ “safety expert,” upon which the plaintiffs’ motion relied in an attempt to show that the motor carrier’s hiring, training, and supervision of the
truck driver involved in the accident violated the motor carrier’s policies and
demonstrated a wanton disregard for public safety. The plaintiffs also sought
to assert a punitive damages claim against the truck driver based upon allegations that the truck driver: (1) was chronically fatigued at the time of the
accident as a result of undiagnosed “obstructive sleep apnea”; (2) dishonestly
and fraudulently withheld pertinent medical history to obtain a medical certificate; (3) falsified log books; and (4) misled law enforcement about how the
accident occurred. The court ultimately denied both of the plaintiffs’ motions
to amend, agreeing with the defense that the plaintiffs could not meet the
burden of proof required to assert a claim for punitive damages, i.e., the
plaintiffs could not prove, by clear and convincing evidence, that the motor
carrier or truck driver acted in an extreme deviation from reasonable standards of conduct, with knowledge of the likely consequences and an extremely
harmful state of mind.
as less than the pre-trial offer made by the defense. After post-trial adjustments for costs as a matter of right as the prevailing party, Judgment was entered for $144. ION MATTERS
POWERS
TOLMAN
FARLEY,
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POWERS TOLMAN FARLEY, PLLC
LITIGATION MATTERS
July 2014 — Jennifer Brizee and Zach Thompson obtained dismissal of
claims against a county hospital for alleged negligence of an independent contractor physician. The court agreed with Ms. Brizee’s position, that “apparent
authority,” a doctrine used to hold hospitals liable for independent contractors’ actions, does not apply to county hospitals because government entities
have sovereign immunity unless a statute allows for imposition of liability.
The court found the Idaho Tort Claims Act, which allows a government entity
to be held liable for employees’ negligence, does not allow liability of a government entity for actions of independent contractors or other non-employees.
Jennifer K. Brizee
Zachary J. Thompson
Portia L. Rauer
August 2014 — Steve Tolman and Nikki Cannon obtained a defense verdict
for an emergency room physician in a three-week jury trial of a wrongful
death claim. A patient reported three recent episodes of chest pain, but his
emergency room exam detected no myocardial infarction. Even so, the emergency room physician advised him to see a cardiologist. The patient promptly
set a cardiology appointment for about three weeks later, but died from a
heart attack before the visit. Plaintiffs claimed the physician failed to ensure
the patient timely saw a cardiologist. The defense showed the heart attack
was unpredictable, and the physician adequately conveyed a need for follow
up to the patient and reasonably expected him to see a cardiologist in a timely fashion. After just one hour of deliberation, the jury found the physician
did not violate the standard of care.
Date of Injury Determines Cap On Noneconomic Damages
Portia Rauer obtained a favorable ruling that the statutory cap on noneconomic damages must be based upon the date of injury, rather than the date
of a verdict or judgment. This distinction is important because a case may be
tried three or four years after an injury, and the cap increases each year. For
example, the cap was $306,451.61 in 2011 and $324,478.18 in 2014. Applying the cap based upon the date of injury makes a significant difference in
awardable damages, especially in multi-plaintiff cases.
Damages — Accounting For Health Insurer Adjustments
Adjustments to medical bills applied by health insurers pursuant to contracts
with medical care providers can be significant, and are not costs actually incurred by patients. Yet, until recently, personal injury plaintiffs were allowed
to ask juries to award damages based upon the full billed amounts. Trial
courts would then apply the “collateral source” statute to subtract adjustments from a verdict before entering the final judgment. However, as a result
of a 2011 Supreme Court ruling that adjustments are not “collateral sources,”
trial courts no longer have a means to account for health insurer adjustments
after a verdict is rendered. In response to this shift, we have successfully
persuaded courts to order that plaintiffs must account for adjustments when
they present evidence of medical expenses to the jury. This can have a profound impact upon the amount of damages ultimately awarded to a plaintiff.
POWERS
TOLMAN
FARLEY,
PLLC
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AVOIDING EXPOSURE TO ATTORNEY FEES
WHEN RESPONDING TO FIRST-PARTY CLAIMS
It has been nearly two years since the Idaho Supreme Court issued its
decision in Holland v. Metro. Property & Casualty Ins. Co., 279 P.3d 80 (2012),
offering some clarification of what an insurer must do in response to a proof of
loss in a first-party insurance claim in order to avoid exposure to attorney fees
under Idaho Code § 41-1839. Yet, we continue to see some insurers, in UM and
UIM claims particularly, making settlement offers to insureds, rather than
actually paying what is determined to be the reasonable value of the claim.
Idaho Code § 41-1839 states:
(1) Any insurer issuing any policy, certificate or contract of insurance,
surety, guaranty or indemnity of any kind or nature whatsoever that fails
to pay a person entitled thereto within thirty (30) days after proof of loss
has been furnished as provided in such policy, certificate or contract, or to
pay to the person entitled thereto within sixty (60) days if the proof of loss
pertains to uninsured motorist or underinsured motorist coverage benefits,
the amount that person is justly due under such policy, certificate or
contract shall in any action thereafter commenced against the insurer in
any court in this state, or in any arbitration for recovery under the terms
of the policy, certificate or contract, pay such further amount as the court
shall adjudge reasonable as attorney's fees in such action or arbitration.
(2) In any such action or arbitration, if it is alleged that before the
commencement thereof, a tender of the full amount justly due was made to
the person entitled thereto, and such amount is thereupon deposited in
the court, and if the allegation is found to be true, or if it is determined in
such action or arbitration that no amount is justly due, then no such
attorney's fees may be recovered.
James S. Thomson
One of the issues in the Holland case concerned the insurer’s conveyance
of a settlement offer in response to a UIM claim. The Holland court reiterated
that there is no requirement that the insurer act unreasonably or unjustly in
order to be required to pay attorney fees under § 41-1839, nor is there any
requirement that the insured be compelled to bring a lawsuit. An insured is
entitled to an award of attorney fees under § 41-1839 if two requirements are
met: (1) the insured must provide a proof of loss as required by the insurance
policy; and (2) the insurer must fail to pay the amount justly due within the
statutory time period after receiving the proof of loss. A proof of loss is
sufficient when the insured provides enough information to allow the insurer a
reasonable opportunity to investigate and determine its liability. It must also
mention a specific sum, or provide a basis for calculating the amount of the
loss, so that a tender can be made. Importantly, to avoid liability for attorney
fees, the insurer must: (1) pay the amount justly due within the statutory time
period; or (2) tender the amount justly due and thereupon deposit the funds in
court prior to the insured filing suit. The Holland court stated merely offering
the amount justly due “does not constitute either paying it to the person
entitled thereto or depositing it in the court.” Thus, in first-party claims,
including UM and UIM claims, the insurer should evaluate and determine the
claim’s undisputed value in response to a proof of loss, and then issue an
unconditional payment of that amount to the insured within the statutory
period (60 days for UM/UIM claims; 30 days for all other claims).
POWERS
TOLMAN
FARLEY,
PLLC
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IDAHO’S NEW SEATBELT DEFENSE
A man, not wearing his seatbelt, hits his head on the roof of a pickup
truck in a rollover accident and claims a traumatic brain injury. An
unbelted front seat passenger anticipates a collision, braces for impact by
hanging onto the overhead grab handle, and dislocates his elbow on
impact. A woman, sleeping on a rear bench seat, is thrown forward in a Tbone collision and strikes her hip on the center console, requiring surgery.
Joyce A. Hemmer
These are just a few of the personal injury scenarios we have
encountered in recent years involving non-use of seatbelts. Even though,
at the time of these accidents, Idaho Code § 49-673 required the claimants
to wear properly fastened seatbelts, another statute forbid the defendants
from offering evidence that failure to wear seatbelts contributed to the
claimants’ injuries. The rationale for excluding the seatbelt evidence was
that there was no connection between seatbelt non-use and the cause of
the accident.
Encouragingly, the rules have recently changed. In a policy-making
about-face, the 2014 Legislature eliminated the exclusionary rule and
created a new affirmative defense based upon a claimant's failure to wear a
seatbelt. Effective July 1, 2014, the new seatbelt defense allows a
defendant to introduce evidence of seatbelt non-use in order to reduce the
damages awardable to a claimant. See I.C. § 6-1608. Notably, seatbelt
evidence still cannot be used to prove comparative fault, meaning that,
even if a claimant’s failure to use a seatbelt accounts for a larger portion of
the damages than a defendant's negligence, the comparative negligence
statute (I.C. § 6-801) will not bar the claimant’s recovery. Instead, if the
jury finds that non-use of a seatbelt caused some of the injuries, the jury
can consider that factor when awarding damages.
The seatbelt defense cannot be raised in the initial pleading. A
defendant must file a motion to amend the answer, and must show a
reasonable likelihood of proving facts sufficient to support a jury’s finding
that failure to wear a seatbelt caused a portion of the claimant’s damages.
If the court allows the defense to be raised in an amended answer, the
defendant has an elevated evidentiary burden at trial to show, by clear and
convincing evidence, that non-use of a seatbelt was a proximate cause of
an injury.
Medical and/or biomechanical expert testimony is likely
necessary to establish the causal link between the injury and non-use of a
seatbelt at both the motion and trial stages.
Notably, the seatbelt defense does not apply to UM/UIM cases and
seatbelt evidence should not be considered in evaluating an insured's UM/
UIM claim. The defense is also inapplicable to claims of minors who are too
young to qualify for driver training. Evidence of a minor's seatbelt non-use
is admissible, however, in an action for a minor’s wrongful death if the
claimant was responsible to ensure the minor was wearing a seatbelt.
Although relatively untested in the courts, this new affirmative
defense is a positive step toward accounting for damages caused by a
claimant’s failure to wear a seatbelt.
POWERS
TOLMAN
FARLEY,
PLLC
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NICOLE L. CANNON
NAMED SHAREHOLDER
Powers Tolman Farley is pleased to announce that Nikki
Cannon recently became a shareholder in the firm, joining
Steve Tolman and Jennifer Brizee as shareholders based in the
firm’s Twin Falls office.
Nicole L. Cannon
Ms. Cannon graduated, cum laude, from Utah State
University with a degree in political science and minor in
philosophy, and earned her law degree at the University of
Utah in 1996. She has developed extensive courtroom and
trial experience since becoming licensed to practice in Idaho in
1998. For more than 11 years, she was a deputy prosecuting
attorney, then Prosecuting Attorney, in Minidoka County,
Idaho. She prosecuted criminal cases and was heavily involved
in civil work for the county, including planning and zoning,
personnel issues, administration, and providing legal advice to
the county commissioners and other elected officials. After
leaving public office, Ms. Cannon joined Tolman & Brizee, PC,
as an associate in January 2009.
Ms. Cannon’s practice with the firm focuses on medical
malpractice defense, product liability, commercial liability, and
general liability (casualty and personal injury) matters. She is
admitted to practice in all courts of the State of Idaho and the
United States District Court for the District of Idaho, and
handles cases throughout the State.
Contact Us:
Powers Tolman Farley
♦
Boise Office
Phone: 208.577.5100
Fax: 208.577.5101
345 Bobwhite Court, Suite 150
Boise, Idaho 83706
♦
Twin Falls Office
Phone: 208.733.5566
Fax: 208.733.5444
132 Third Avenue East
Twin Falls, Idaho 83301
www.powerstolman.com
POWERS
TOLMAN
FARLEY,
PLLC