Legislature(1995 - 1996)
03/12/1996 01:35 PM Senate L&C
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 158 CIVIL LIABILITY
DANIELLA LOPER, staff to Representative Porter, prime sponsor of HB
158, gave a sectional analysis of the House version. Section 2
creates a time limit for any civil action to 8 years, under the
statute of repose. Section 3 clarifies existing law, which sets
statutory liabilities to two years for particular actions. Section
4 deals with limitations on actions involving injury to personal
property, and is based on an accrual method. Section 5 limits non-
economic damages to $300,000 and for other specified injuries,
$500,000. Claims for wrongful death are also included in Section
5. Section 6 addresses punitive damages and was taken from the
latest Alaska Supreme Court case and defines that decision in
statute. Section 7 contains a formula for the award of punitive
damages, which is three times the amount of non-economic plus
economic damages. There is no ceiling on the amount that can be
awarded for economic damages. Section 8 exempts the state, self-
insured municipalities, and authorized insurers from posting
security for periodic payments.
Number 199
MS. LOPER continued saying that section 9 deals with inflation
adjustments for periodic payments and provides for a floating
interest rate. Section 10 requires the jury be informed of
compensation the plaintiff has received, for example medical
benefits. This requirement does not apply to federally funded
programs which must seek repayment or death benefits under a life
insurance policy or workers' compensation. The apportionment of
fault provision in Section 10 was taken from a Supreme Court Case
called the Brenner Case, and apportions fault to every person
responsible for the party's injuries rather than just those named
in the lawsuit. Section 10 was included to prevent the deep pocket
syndrome for entities that carry large policies. Section 11 is
based on the premise that offers of judgment inhibit the filing of
cases and clog up the court system. This section expands the offer
of judgment provision so that if an offer made is within five
percent of the judgment rendered by the jury, then the person who
denied the offer will have to pay the other party's costs and
attorney's fees. Section 12 sets prejudgment interest at three
percent above the 12th Federal Reserve District discount rate in
effect on January 2. Interest may not be awarded on future
economic, non-economic, or punitive damages. The section (19) on
civil liability of hospitals for non-employees requires those
employees to post notice of whether they carry insurance.
Number 249
MS. LOPER continued saying section 20 prohibits a felon from
recovering damages from civil litigation if those damages resulted
from the commission of the felony. Section 21 pertains to signing
of pleadings, motions, and sanctions, and was not deleted from the
Senate Judiciary Committee version. It provides for sanctions
against the plaintiff's attorney or the person who signed the
pleadings or motions if in summary judgment the case is found to be
frivolous. Section 16 of the House version provides for
arbitration but does not mandate it. Section 17 applies to medical
expert witness qualifications to ensure that any person testifying
against a health care provider be licensed. The House version does
not contain a mandatory rate rollback, and the act takes effect
upon passage. Representative Porter does not support a mandatory
rate rollback because of the numerous court cases in California
resulting from tort reform legislation. The House version
definitions of professional negligence, services, and malpractice
actions are directly related to health care providers.
Number 292
CHUCK ACHBERGER, Senator Judiciary Committee aide, explained the
Senate Judiciary Committee version of HB 158. The statute of
repose was increased to 15 years to bring it in line with existing
rules in the court system. The statute of repose covers not only
physicians, but contractors, architects, and engineers. Because
bank loans are usually for 20 to 30 years on a building, the eight
year statute of repose was not long enough to provide for bank
confidence when making loans. Certain statutory liabilities remain
the same, as well as limitations on actions. Section 5,
noneconomic damages, was deleted from the Senate Judiciary version
because it was difficult to adjust for environmental damages in the
bill. Fishing groups involved in the Exxon Valdez cleanup
questioned whether that section would limit environmental damages
to $300,000. Because there was no way to resolve that problem, the
section was deleted.
MR. ACHBERGER noted an additional change to the statute of repose
on page 3, lines 27 and 28, was the removal of the words
"undiscovered presence" and "that has no therapeutic or diagnostic
purpose or effect...."
MR. ACHBERGER said the award for punitive damages sections in both
versions of the bill is the same, as well as the definition of
punitive damages. Regarding the section that exempted the state,
municipalities , and insurance companies from posting security, that
provision was deleted because the plaintiff would have no
protection if one of those entities filed for bankruptcy.
Additional language in that section did not require payments to be
made when due was also deleted. Inflation adjustments were not
changed in the Senate Judiciary version. The collateral benefits
section was deleted from the Senate Judiciary version because
medical bills and other expenses paid by the injured party or
his/her family during recovery would be subtracted from the amount
of the settlement.
Number 365
MR. ACHBERGER discussed the apportionment of fault provision. In
the Senate version, fault can only be apportioned to those people
within the court's jurisdiction. The offer of judgment provision
requires all defendants to join in an offer, otherwise no offer can
be made. Prejudgment interest is pegged to five year treasury
notes to be more representative of conditions in the marketplace at
the time of the incident. In Section 15, doctors who are not
employed by a hospital must carry $2,500,000 per incident in
liability coverage, otherwise the hospital is responsible for
liability coverage. The amount, per incident was originally set at
$5,000,000, but after taking testimony, was reduced to $2,500,000.
The section covering damages resulting during the commission of a
crime is the same as the House version. Section 17, on pleadings,
motions and sanctions, is also the same as the House version.
MR. ACHBERGER explained that the section requiring mandatory
arbitration, in the Senate version, for cases under $100,000 should
accommodate 90 percent of all tort cases, according to research
statistics and should lower costs and expedite efforts. The expert
witness qualification provision was broadened to apply to all
professionals, not just medical professionals. This would require
an expert testifying against a professional in any field. The
mandatory rate rollback provision is Senator Adams' amendment. The
amount of ten percent has been debated; the intent is to ensure
that insurance companies reduce rates. The definition of
professional negligence was changed to pertain to all professional
services, not just medical services.
Number 380
SENATOR KELLY asked if the House version offer of judgment
provision is designed to prevent a party from holding out on a
settlement to get a larger amount.
MS. LOPER replied that too often the defendant will try to settle
with the plaintiff, and will make an offer, but the offer will be
declined while the plaintiff holds out for more. Also, a wealthy
defendant might refuse to make an offer and continue to pursue
litigation to exhaust the other party. This section would require
the plaintiff to pay for the defendant's attorney's fees if the
jury award is within five percent of the offer.
MR. ACHBERGER noted the Senate version removed the multiple offers
of judgment so that the group would have to agree among themselves
as to the settlement before making the offer.
SENATOR KELLY asked if the word "judgment" implies that the judge
or jury has made a finding of x number of dollars, but the
plaintiff will not accept that amount of money and chooses to
continue the case.
MS. LOPER stated that is correct.
MR. ACHBERGER believed it is in a pretrial situation, where one
party wants to settle beforehand to avoid a trial.
SENATOR KELLY clarified that is when the judgment is determined,
and if the judgment is within five percent of the offer, one party
pays the other's attorney fees.
SENATOR SALO asked how "frivolous" would be determined under the
signings and pleadings section.
MS. LOPER responded the definition of "frivolous" and
"unwarranted" is in the court rules.
SENATOR KELLY announced the bill will be brought up again on
Thursday, in order to move it out, and that the bill has further
referrals to the Senate Finance and Senate Rules Committees. He
adjourned the meeting at 2:07 p.m.
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