Summer 2008 - Swift Currie

The
Timeless Values.
Progressive Solutions.
Tort Report
An Update on Liability Issues
Summer 2008
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Changes to Georgia’s
Uninsured Motorist Law
By Ashley W. Broach
Starting January 1, 2009, a change to
O.C.G.A. § 33-7-11, Georgia’s uninsured
motorist statute, will allow a driver
additional coverage for damages caused
by uninsured or underinsured (“UM/
UIM”) motorists.
SB 276, recently signed by Governor
Perdue, introduces a “stacking provision”
to O.C.G.A. § 33-7-11 which will allow an insured to stack his own
uninsured motorist coverage on top of any insurance proceeds he
received from a tortfeasor with no offset for payment by the tortfeasor’s
insurance. Under SB 276, this new stacking policy would be the default
unless an insured affirmatively, and in writing, rejected stacking. Under
previous law, the at-fault driver’s liability coverage was deducted from
the total amount of UM/UIM coverage. The following example illustrates how this new “stacking” will work. In a simple scenario, insured
driver A is struck by driver B and suffers $50,000 in bodily injuries.
Driver B has $25,000 in liability coverage and after the full limits of
his policy are paid he is “underinsured” by $25,000. Defendant A has
uninsured/underinsured motorist coverage worth $25,000. Under
Georgia’s old law, driver A’s uninsured motorist carrier is entitled to
an offset of the $25,000 paid by driver B’s insurance carrier and driver
A would not be entitled to receive any compensation from his insurer.
Under SB 276, if driver A has stacking UM/UIM coverage, he would
be able to recover the $25,000 from driver B’s insurance company and
$25,000 from his own insurance company.
SB 276 also addresses two adverse judicial decisions that expanded the
possible recovery under UM/UIM motorist coverage. Under the new
law, unless an umbrella or excess liability policy affirmatively provides
for UM coverage, such coverage is not included in the umbrella or
excess policy. The legislature included this provision in response to
Abrohams v. Atlantic Mutual Insurance, 282 Ga. App. 176 (2006),
in which the Georgia Court of Appeals held that unless an insured
expressly rejected uninsured motorist coverage in an umbrella or excess
liability insurance policy, the policy included UM/UIM coverage in
an amount equal to the liability limit. According to the court, language
in the policy which expressly excluded uninsured motorist coverage
was not sufficient under O.C.G.A. § 33-7-11 (2001) to exclude UM
coverage. SB 276 also overrules Dees v. Logan, 282 Ga. 815 (2007)
and clarifies O.C.G.A. § 33-7-11(i) to provide that an insurance
policy may contain provisions excluding any liability of the insurer
for amounts already compensated pursuant to “medical payments
coverage,” or workers’ compensation. The Georgia Supreme Court
had held in Dees that an insurer providing UM coverage was not entitled
to a setoff for workers’ compensation or other similar benefits paid to
the insured and that if the legislature had intended a setoff it should
amend the statute. The Georgia Legislature took the Supreme Court’s
suggestion and amended the statute.
The new default stacking coverage is likely to involve UM carriers in
many more auto injury claims and increase the recovery of people
injured in motor vehicle accidents. Insurers writing policies in Georgia
will be required to give their insureds additional information on the
types of uninsured motorist coverage available and will need to make
sure they have any selections or rejections memorialized in writing.
Electronic Notifications:
Technology’s Effect on the
Practice of Law
By Ariel B. Denbo
In a recent Sixth Circuit opinion, the
appellate court offered a cautionary tale
to attorneys and their clients in the age
of electronic filing and dockets. The court
held the district court did not abuse its
discretion in that holding parties have
an affirmative duty to monitor the court’s
electronic docket. Kuhn v. Sulzer Orthopedics, 498 F.3d 365 (6th Cir. 2007).
Plaintiffs retained Texas attorney Tommy Jacks to represent them in
a suit against Sulzer Orthopedics. Numerous suits were filed against
Sulzer alleging hip implants manufactured by the company were
defective. The suits were centralized in the Northern District of Ohio
by order of the Multi-District Litigation (“MDL”) panel. The court
approved a negotiated settlement, which the Kuhns, on the advice of
attorney Jacks, elected to receive as part of the class. However, attorney
Jacks failed to timely file Mrs. Kuhn’s claim for the settlement’s
“Extraordinary Injury Fund” (“EIF”), for which she was eligible.
Thereafter, the Kuhns retained Texas attorney James Harris and filed
a legal malpractice suit against attorney Jacks in a Texas state court.
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The Tort Report | Summer 2008
During the course of the state court action, the Kuhns sought discovery
from non-party Sulzer regarding the negotiation and implementation
of the class-action settlement. Sulzer, believing the discovery sought
implicated questions exclusively in the continuing jurisdiction of the
MDL, filed an emergency motion to enjoin discovery. The MDL
court issued its ruling orally that the Kuhns could pursue their legal
malpractice claim, but could not pursue various other claims. On
October 6, 2005, the Kuhns filed a motion with the court requesting
it issue a written order so the Kuhns could proceed with their appeal.
On October 18, 2005, the court issued such a written order.
The Kuhns had 30 days to file their notice of appeal of the MDL
court’s order. However, Harris, did not receive notice of the entry of
the order; thus, the deadline passed with no action. On January 6,
2006, a paralegal in Harris’ office discovered the order when reviewing
the district court’s docket. On January 10, 2006, the Kuhns filed a
motion to reopen the time to file an appeal under Federal Rule of
Appellate Procedure 4(a)(6), which was denied by the district court.
The district court held Harris had a duty to register his email address
with the court’s CM/ECF system and to monitor the docket, especially
where he had taken the affirmative step of filing a motion requesting
the court promptly issue a ruling.
The Sixth Circuit Court of Appeals agreed and held the district court
did not abuse its discretion in denying the motion. Although the
Kuhns met all of the requirements of Rule 4(a)(6), the rule allows the
trial court discretion in determining whether to grant a motion to
reopen time to file an appeal. The Sixth Circuit sustained the district
court’s exercise of discretion in denying the Kuhns’ motion based on
the district court’s second reason, the affirmative duty of parties to
monitor the court docket.
The Sixth Circuit reasoned that in “bygone days of hiring ‘runners’ to
physically go to the courthouse to check the docket,” a party’s failure
to learn about the issuance of an appealable order may be excusable
neglect. However, since all Harris had to do was register his email
address with the court’s CM/ECF system, or at the very least, periodically scan the electronic docket for recent activity, the failure to
learn about the order was inexcusable. Indeed, the sticking point for
the Kuhns was that ultimately Harris learned about the district court’s
Injunction Order in precisely the way noted by the court: his paralegal checked the online docket and discovered the order. Finally, the
court noted, the Kuhns had specifically requested the district court
enter a written order so that they could file their appeal, and had their
counsel been diligent in regularly checking the docket, he would have
noticed the court had responded to the request.
This case piques an interest in the present age of electronic filing and
technology. Scenarios which might involve “excusable neglect” are
dwindling as courts move toward an electronic system. Electronic
filing provides an efficient and accurate way of monitoring dockets,
filing pleadings and retrieving copies which might have taken greater
time and expense (and a lot more paper) in an earlier day but also
requires that attorneys and parties maintain a vigilant and constant
watch over these electronic dockets.
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Medicare Secondary
Payor Statute, A Two-Sided
Coin for Insurers
By C. Whitfield Caughman
Medicare is a fully federally funded
and administered program to provide
health insurance for older and/or disabled
Americans. Individuals contribute to
Medicare throughout their working lives
just as they do to Social Security. Because
Medicare is an exclusively federal program,
every state has essentially the same eligibility guidelines and services. People
eligible for Medicare include most persons over the age of 65, persons
with disability status and persons with irreversible kidney failure. The
program is administered by the Center for Medicare and Medicaid
Services (“CMS”).
In 2005, Medicare covered 42.5 million people, to the tune of $330
billion in benefits. Heather K. Kelly, Johnathan Allan Klein, Annmarie
M. Liermann and James M. Meseck, Medicare Reimbursement Problems,
Medical Liability: Making the Possible Impossible, Feb. 2008 at 9.
An estimated 30 million claims are filed each year involving an injury
component. Mathew L. Garretson, One More thing to Worry About
in Your Settlements: The Medicare, Medicaid, and SCHIP Extension
Act of 2007 Seminar (March 11, 2008). Since so much taxpayer money
is at stake, the law has long required that where the need for Medicarepaid services is caused by a tort, Medicare is entitled to be reimbursed
by the tortfeasor or its insurer. The federal statute which provides for
Medicare’s claim on any recovery made in a tort claim is called the
Medicare Secondary Payor (“MSP”) statute. The agency’s right of
recovery arises by operation of law, and no specific notice to the
tortfeasor or insurer is required. The current MSP statute provides
that when a tortfeasor/insurer ignores Medicare’s right of recovery, the
consequences of non-compliance include exposure for double the
amount of benefits paid by Medicare, plus interest.
On December 29, 2007, Congress amended the MSP statute to
affirmatively require that insurers submit information to Medicare
regarding personal injury and workers’ compensation claimants. Mark
your calendars because the new requirements go into effect on July 1,
2009, and, under this statute in particular, time is money.
Congress created a two-step process for compliance. First, the
insurer must determine whether a claimant is entitled to benefits
under Medicare for any reason. If the answer is yes, the insurer must
submit certain information to Medicare in a form and manner to be
specified by the Secretary of Health and Human Services (“HHS”).
Congress left the exact information insurers must submit and the
timing of such submission for future determination through regulations
yet to be promulgated by the Secretary. At this time, Congress’ only
guidelines state the insurer will have to include the identity of the
claimant as well as nebulously-defined other information “in order to
The Tort Report | Summer 2008
enable the Secretary to make an appropriate determination concerning
coordination of benefits, including any applicable recovery claim.”
The insurer should do so “within a time specified by the Secretary”
after the claim is resolved. Resolution of a claim happens in any way
that settles that claim: through a (1) settlement, (2) judgment, (3)
award or (4) other payment – regardless of a determination or
admission of liability.
Congress included new penalties for failure to meet this obligation.
A non-compliant insurer may be required to pay $1,000 for each day
it fails to notify Medicare. This $1,000 fine is multiplied by each
recipient whose claim is “resolved.” Thus, to minimize this unnecessary
consequence, insurers must embrace these new procedures on the
front-end to minimize liability on the back end. Unfortunately, most
of the practical knowledge needed for compliance is still undetermined.
The Secretary of Health and Human Services has over a year to decide
the details. The Secretary has indicated he is interested in feedback
from those affected by the MSP statute. One news article reported
the Secretary intends to seek the dialogue of insurers and attorneys
prior to releasing the standards.
Experts in Georgia — Now What?
By Molly J. Prodgers
Georgia’s Legislature passed O.C.G.A. §
24-9-67.1, the expert witness admissibility statute, in February 2005, and it
survived its first significant challenge in
the Georgia Supreme Court’s recent
decision Mason v. Home Depot U.S.A.,
Inc., 283 Ga. 271, 658 S.E.2d 603 (2008).
This decision upheld the constitutionality
of O.C.G.A. § 24-9-67.1 and further
provides litigants with a more definite framework for admitting or
challenging an expert in Georgia courts.
February 2005 are susceptible to a Daubert challenge pursuant
to O.C.G.A. § 24-9-67.1.
• An expert may rely upon facts or data not admissible at trial if the
facts and data are of the type usually relied upon by experts in that
particular field. This means an expert can rely upon hearsay, for
example, in reaching his opinion. However, the trial court is
required to balance whether the probative value of the inadmissible
testimony outweighs the prejudicial effect in deciding whether
the jury can hear the inadmissible testimony to evaluate the
expert’s opinion.
• The proffered expert must be qualified by knowledge, skill, experience, training or education. As in federal court, an expert
need not be in a scientific field. However, he still must have an
adequate foundation to testify in the particular area.
• The testimony must be the product of reliable principles and
methods and not based merely upon formulae or protocol of his
own design that no one else in the field uses. This is one of the
most significant elements of O.C.G.A. § 24-9-67.1. In other words,
there must be some external support for an expert’s testimony.
• In addition, the proffered expert must have applied the principles
and methods reliably to the facts of the case.
Of course, this new standard in Georgia makes it a necessity for
parties to adequately vet their own experts. Important questions to
ask your own expert include: Has he tried to disprove his own
conclusions? Does he have sufficient foundation in experience, education or training to reach these opinions? Has anyone else in his field
used the same principles and methods he used to reach his conclusion?
Does he rely upon inadmissible evidence to reach his conclusions?
Because O.C.G.A. § 24-9-67.1 is based upon the Federal Rules of
Evidence and Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S.
579 (1993), Georgia trial courts may rely upon the federal law when
deciding whether to admit or exclude an expert in Georgia state courts.
This is helpful to litigants who can rely upon 15 years of federal case
law when briefing their arguments for a Georgia court.
The Supreme Court’s decision was a victory for the use of expert
testimony by upholding the reliability standard as a threshold of
admissible expert testimony in Georgia courts. This decision brings
the Georgia standard in line with the admissibility standards in federal
courts and other state courts and specifically relies on Daubert v.
Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993). All experts
proffered in Georgia must now meet these heightened requirements
before their testimony can be heard by a jury.
Expert admissibility in Georgia will no doubt continue to be honed
through the years. In the meantime, the federal standard and years
of case law will help Georgia courts and litigants navigate the new
standards in Georgia.
So what are the basics in Georgia now for admitting or challenging
an expert? Based on Mason v. Home Depot and other recent case law
interpreting O.C.G.A. § 24-9-67.1, we can ascertain the following:
Lynn M. Roberson received a favorable ruling in La Quinta Inns,
Inc. v. Leech, 289 Ga. App. 812 (January 25, 2008). The Georgia
Court of Appeals held that the trial court erred in denying La Quinta’s
motion for summary judgment as to the negligence of La Quinta
because the evidence demonstrated that the sole proximate cause of
Mr. Leech’s death was his act of suicide. The court further upheld the
trial court’s grant of La Quinta’s summary judgment as to the plain-
• O.C.G.A. § 24-9-67.1 applies to all experts in civil cases, even if
the case was filed before February 2005, when the statute was
passed. This means parties proposing experts relying on the more
relaxed standards of expert admissibility in cases filed before
Recent Appellate Decisions
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The Tort Report | Summer 2008
tiff’s alternative theory holding that La Quinta did not have superior
knowledge of the hazard alleged by the plaintiff.
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Terry O. Brantley and Yoon J. Ettinger won a dismissal for their client
in Montague v. Godfrey, 289 Ga. App. 552 (February 8, 2008). The
Georgia Court of Appeals upheld the lower court’s dismissal of the
plaintiff’s Complaint for failure of the plaintiff to exercise the greatest
possible diligence to ensure proper and timely service of the defendant.
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Bradley S. Wolff received a favorable ruling for his client Walter Blase
in McLeod v. Blase, 290 Ga. App. 337 (March 18, 2008). The Georgia
Court of Appeals held that Mr. Blase, the Atlanta Hawks’ head athletic trainer, is entitled, under the Georgia Workers’ Compensation
Act, to immunity from malpractice claims of a former Hawks player.
The court declined to expand the limited exception to the exclusive
remedy provision which exists for medical malpractice suits against
a co-employee physician.
Lynn M. Roberson won a victory for her client, Gateway Insurance
Company in Turner v. Gateway Insurance Company, 290 Ga. App.
737 (April 3, 2008). The Georgia Court of Appeals upheld the denial
of the plaintiff’s motion for partial summary judgment, holding that
public policy did not require a commercial insurance policy to be
reformed to increase the liability coverage the plaintiff argued was
required under federal law. Further, the Court held that no authority
or policy requires insurers “to provide ex post facto coverage in
amounts that exceed what was actually contracted for and purchased
by their insured.”
John W. Campbell and Valerie E. Pinkett won a victory for State Farm
Mutual Insurance Company when the Georgia Court of Appeals
upheld a grant of summary judgment in Zilka v. State Farm Mutual
Insurance Company, 2008 Ga. App. LEXIS 603 (May 23, 2008).
The court held that State Farm did not breach the insurance contract
or act in bad faith when it refused to pay the Zilka’s claim because
on the date Mrs. Zilka was involved in a motor vehicle collision the
Zilka’s insurance coverage had lapsed due to non-payment.
James T. McDonald, Jr. won a victory for his client Harrell Insurance
Agency, Inc. when the Georgia Court of Appeals upheld the lower
court’s grant of summary judgment in Spellman v. Harrell Ins. Agency
Inc., 2008 Ga. App. LEXIS 731 (June 25, 2008). The court held that
the plaintiffs’ claims of negligent misrepresentation against Harrell
Insurance Agency for failing to provide the correct insurance coverage
information to a rental car agency failed as a matter law because the
plaintiffs, the victims of an accident, were unaware of the misrepresentation that permitted the responsible driver to rent a vehicle and
could provide no evidence that they relied on any information concerning the insurance coverage of the driver that struck their vehicle.
In the Next Issue of the Tort Report:
Stephen L. Cotter writes about the Fifth Amendment, sexual misconduct and coverage under a homeowner’s policy.
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Friday
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Save the Date
Swift Currie’s Annual Workers’
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Swift Currie’s Annual Property
and Liability Seminar
November 7, 2008
9:30 AM - 3:30 PM
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September 12, 2008
9:30 AM - 3:00 PM
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Swift, Currie, McGhee & Hiers, LLP, offers these articles for informational
purposes only. These articles are not intended as legal advice or as an
opinion that these cases will be applicable to any particular factual issue
or type of litigation. If you have a specific legal problem, please contact a
Swift Currie attorney.
The Tort Report is edited by Bradley S. Wolff and Alicia A. Timm. If you
have any comments or suggestions for our next newsletter, please contact
Brad at [email protected] or Alicia at [email protected].