03/12/2008 01:00 PM House JUDICIARY
| Audio | Topic |
|---|---|
| Start | |
| HB103 | |
| HB331 | |
| HB103 | |
| HB400 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 103 | TELECONFERENCED | |
| + | HB 331 | TELECONFERENCED | |
| += | HB 400 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE JUDICIARY STANDING COMMITTEE
March 12, 2008
1:17 p.m.
MEMBERS PRESENT
Representative Jay Ramras, Chair
Representative Nancy Dahlstrom, Vice Chair
Representative John Coghill
Representative Ralph Samuels
Representative Max Gruenberg
Representative Lindsey Holmes
MEMBERS ABSENT
Representative Bob Lynn
COMMITTEE CALENDAR
HOUSE BILL NO. 103
"An Act amending Rule 62, Alaska Rules of Civil Procedure, to
limit the amount of the bond required to stay execution of a
judgment in a civil litigation during an appeal or review; and
amending Rules 204 and 205, Alaska Rules of Appellate Procedure,
to limit the amount of the bond required to stay execution of a
judgment in a civil litigation during an appeal."
- HEARD AND HELD
HOUSE BILL NO. 331
"An Act relating to mandatory motor vehicle insurance, license
suspensions, mandatory impoundments of vehicles used in certain
offenses, and notices relating to motor vehicles and driver's
licenses."
- MOVED CSHB 331(L&C) OUT OF COMMITTEE
HOUSE BILL NO. 400
"An Act relating to a person who seeks medical assistance for a
person experiencing a drug overdose."
- MOVED HB 400 OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: HB 103
SHORT TITLE: BOND REQUIREMENT ON APPEAL
SPONSOR(S): REPRESENTATIVE(S) COGHILL
01/22/07 (H) READ THE FIRST TIME - REFERRALS
01/22/07 (H) JUD
03/12/08 (H) JUD AT 1:00 PM CAPITOL 120
BILL: HB 331
SHORT TITLE: MOTOR VEHICLES:INS/LICENSES/IMPOUNDMENTS
SPONSOR(S): REPRESENTATIVE(S) ROSES
01/18/08 (H) READ THE FIRST TIME - REFERRALS
01/18/08 (H) L&C, JUD
02/20/08 (H) L&C AT 3:00 PM CAPITOL 17
02/20/08 (H) Moved CSHB 331(L&C) Out of Committee
02/20/08 (H) MINUTE(L&C)
02/21/08 (H) L&C RPT CS(L&C) NT 1DP 3NR 3AM
02/21/08 (H) DP: GARDNER
02/21/08 (H) NR: LEDOUX, RAMRAS, OLSON
02/21/08 (H) AM: BUCH, NEUMAN, GATTO
03/12/08 (H) JUD AT 1:00 PM CAPITOL 120
BILL: HB 400
SHORT TITLE: MITIGATING FACTOR: CARE FOR DRUG OVERDOSE
SPONSOR(S): REPRESENTATIVE(S) KERTTULA
02/19/08 (H) READ THE FIRST TIME - REFERRALS
02/19/08 (H) JUD, FIN
02/25/08 (H) JUD AT 1:00 PM CAPITOL 120
02/25/08 (H) Heard & Held
02/25/08 (H) MINUTE(JUD)
03/12/08 (H) JUD AT 1:00 PM CAPITOL 120
WITNESS REGISTER
CRYSTAL KOENEMAN, Staff
to Representative Bob Roses
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 331 on behalf of the sponsor,
Representative Roses.
KERRY HENNINGS, Driver Licensing
Director's Office
Division of Motor Vehicles (DMV)
Department of Administration (DOA)
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 331.
VICTOR SCHWARTZ, Attorney at Law, Co-Chair
Civil Justice Task Force
American Legislative Exchange Council (ALEC)
Washington D.C.
POSITION STATEMENT: Testified on HB 103.
MICHAEL WILSON, Coastal Helicopters
The National Federation of Independent Business (NFIB)
Juneau, Alaska
POSITION STATEMENT: Testified on HB 103.
WAYNE STEVENS, President
Alaska State Chamber of Commerce (ASCC)
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 103.
ANNE JOHNSON, Assistant Attorney General
Oil, Gas & Mining Section
Civil Division (Juneau)
Department of Law (DOL)
Juneau, Alaska
POSITION STATEMENT: Answered questions on HB 103.
AURORA HAUKE, Staff
to Representative Beth Kerttula
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 400 on behalf of the sponsor,
Representative Beth Kerttula.
ACTION NARRATIVE
CHAIR JAY RAMRAS called the House Judiciary Standing Committee
meeting to order at 1:17:21 PM. Representatives Gruenberg,
Coghill, Samuels, Holmes, and Ramras were present at the call to
order. Representative Dahlstrom arrived as the meeting was in
progress. Representative Lynn was excused.
HB 103 - BOND REQUIREMENT ON APPEAL
1:17:34 PM
CHAIR RAMRAS announced that the first order of business would be
HOUSE BILL NO. 103, "An Act amending Rule 62, Alaska Rules of
Civil Procedure, to limit the amount of the bond required to
stay execution of a judgment in a civil litigation during an
appeal or review; and amending Rules 204 and 205, Alaska Rules
of Appellate Procedure, to limit the amount of the bond required
to stay execution of a judgment in a civil litigation during an
appeal."
1:17:45 PM
REPRESENTATIVE HOLMES moved to adopt the proposed committee
substitute (CS) for HB 103, Version E, labeled 25-LS0401\E,
Bailey, 5/2/07 as the working draft. There being no objection,
Version E was before the committee.
1:17:58 PM
REPRESENTATIVE COGHILL, speaking as the sponsor of HB 103,
explained that the bill would place a cap on the amount of an
appeals bond to $5 million or 10 percent of the appellant's net
worth in a civil lawsuit. Currently, an appellant is required
to post a bond equal to the amount of the judgment plus appeal
costs and interest. However, this limitation would not apply to
awards resulting from the injury, loss, or destruction of
natural resources caused by an environmental disaster, or to
awards in actions or proceedings in which the state or another
governmental entity is a party. He said that his intent is to
allow companies the ability to appeal with a reasonable bond
posting without putting them out of business. Representative
Coghill opined that a defendant's right to appeal shouldn't be
precluded by an inability to post a bond.
The committee took an at-ease from 1:21 p.m. to 1:30 p.m.
CHAIR RAMRAS relayed that HB 103 [Version E] would be set aside
until later in the meeting.
HB 331 - MOTOR VEHICLES:INS/LICENSES/IMPOUNDMENTS
1:30:59 PM
CHAIR RAMRAS announced that the next order of business would be
HOUSE BILL NO. 331, "An Act relating to mandatory motor vehicle
insurance, license suspensions, mandatory impoundments of
vehicles used in certain offenses, and notices relating to motor
vehicles and driver's licenses." [Before the committee was
CSHB 331(L&C).]
1:31:10 PM
CRYSTAL KOENEMAN, Staff to Representative Bob Roses, Alaska
State Legislature, relayed on behalf of Representative Roses,
sponsor, that HB 331 pertains to motor vehicle insurance,
license suspensions, and notices relating to motor vehicles.
She explained that HB 331 reduces the penalty for failure to
report to the Division of Motor Vehicles (DMV) a name change or
address change from a class B misdemeanor to a fine not to
exceed $25. She stated that Section 2 of the bill provides an
affirmative defense clause to allow a person to provide proof of
automobile insurance in the event that a person's automobile
insurance was suspended for failure to provide prove of current
insurance within 30 days of the required notice. The insurance
must be in place at the time of the offense and not purchased
after the offense, she noted. Currently, conviction of driving
without vehicle insurance would result is a license suspension
between 90 days and one year, she stated. Ms. Koeneman
explained that proposed Section 3 would add a new subsection in
AS 28.22.019 that would impose a class B misdemeanor and a fine
of at least $500 on a person convicted of not possessing the
required vehicle insurance. She offered that Section 4 would
change the notification process to send notification to the
current address on file or else to the address provided on the
accident report.
1:34:50 PM
KERRY HENNINGS, Driver Licensing, Director's Office, Division of
Motor Vehicles (DMV), Department of Administration (DOA), in
response to Representative Dahlstrom, related that the division
is "very happy" with HB 331. She stated that the changes
contained in HB 331 will assist the DMV with its customer
service and make it easier for people who have had vehicle
accidents to prove they hold vehicle insurance.
REPRESENTATIVE COGHILL offered his recollection that language
contained in the bill passed the body last year in HB 184,
sponsored by Representative Roses, although the provision was
later removed in the other body. Thus, HB 184 passed the
legislature last session without the driver's address of record
issue addressed, he stated. Representative Coghill
characterized HB 331 as a "very good" piece of legislation.
CHAIR RAMRAS characterized HB 331 as a great "fix it bill."
1:36:00 PM
MS. KOENEMAN, in response to a request by Representative
Gruenberg, reiterated her explanation of HB 331.
CHAIR RAMRAS, after first determining no one else wished to
testify, closed public testimony on HB 331.
REPRESENTATIVE GRUENBERG referred to Section 3 and inquired as
to what the current penalty is for driving an uninsured vehicle.
MS. KOENEMAN answered that the current penalty is a license
suspension of 90 days to up to one year. She referred to a
handout in the committee packet labeled, "State of Alaska -
Division of Motor Vehicles, Certificate of Insurance" adding
that the second to the last paragraph states the mandatory
insurance. In response to Representative Gruenberg, Ms.
Koeneman answered that the offense would be a class B
misdemeanor. She pointed out that other states have imposed
stronger penalties, such as Massachusetts whose penalty is up to
$5,000 in fines and up to one year in jail.
1:39:51 PM
REPRESENTATIVE GRUENBERG relayed his understanding that the
penalty imposed would be a minimum fine of $500 and a class B
misdemeanor.
MS. HENNINGS answered she did not know, nor was she aware of
whether it would be a civil penalty plus the fine. She stated
that the DMV executes an administrative license suspension.
REPRESENTATIVE GRUENBERG surmised, then, that the DMV would
assess a reinstatement fee of $100-$500, plus a fine of $500,
and the cost of insurance.
MS. HENNINGS answered that DMV does not collect any fines.
However, the court system would collect the fine. In response
to Representative Gruenberg, Ms. Hennings answered that a
reinstatement fee would apply to any license suspension, and
depending on the person's driving record would be required to
pay a fee ranging between $100- $500 for a revocation.
1:41:54 PM
REPRESENTATIVE GRUENBERG surmised that if HB 331 is adopted that
a person could be subject to 90 days in jail, $2,000 fine, a
$500 reinstatement fee, plus the cost of insurance. He
expressed concern that these fines could be imposed in
situations in which the mail is delayed.
REPRESENTATIVE DAHLSTROM offered her understanding that it is
the individual's responsibility to keep the vehicle insurance
current.
REPRESENTATIVE GRUENBERG inquired as to whether the vehicle
would also be impounded if proof of insurance is not in the
vehicle.
MS. KOENEMAN surmised that it would be up the individual
municipalities to impose [impound fees.]
REPRESENTATIVE GRUENBERG recalled that in the Municipality of
Anchorage (MOA) the companies also charge a towing fee. He
pointed out that in his district some people are on the fiscal
margin. He expressed concern that the proposed penalties would
harm many people.
1:43:55 PM
REPRESENTATIVE DAHLSTROM recalled her own experiences and
confirmed that the MOA have the ability to impound. She opined
that HB 103 isn't strict enough.
REPRESENTATIVE GRUENBERG argued that this bill would take away
from the court the ability to suspend imposition of the $500
fee. He recapped the fees imposed under HB 103 would adversely
impact some of his constituents to the extent that some might
not be able to afford to get to work or would ignore the law.
CHAIR RAMRAS offered his understanding that Representative Gara,
co-sponsor of HB 103, previously spoke eloquently on the bill
such that it would remedy the problem of the public facing the
same charges administratively and that this bill was introduced
to address similar concerns.
MS. KOENEMAN explained that Section 4 was voted on by this body
during the last legislative session.
REPRESENTATIVE COGHILL offered his understanding that better
notification is necessary since the notices are sometimes sent
to the wrong address and the parties are unaware of the DMV
requirement for proof of insurance as a result of a vehicle
accident. Thus, this bill requires better notification and
establishes an affirmative defense.
1:48:59 PM
MS. KOENEMAN, in response to Representative Gruenberg, answered
that she did not recall the details of the prior legislature's
bill in terms of the fines imposed for each section.
1:50:01 PM
REPRESENTATIVE DAHLSTROM moved to report CSHB 331(L&C) out of
committee with individual recommendations and the accompanying
fiscal notes. There being no objection, CSHB 331(L&C) was
reported from the House Judiciary Standing Committee.
HB 103 - BOND REQUIREMENT ON APPEAL
1:50:24 PM
CHAIR RAMRAS announced that the committee would next return to
the hearing on HOUSE BILL NO. 103, "An Act amending Rule 62,
Alaska Rules of Civil Procedure, to limit the amount of the bond
required to stay execution of a judgment in a civil litigation
during an appeal or review; and amending Rules 204 and 205,
Alaska Rules of Appellate Procedure, to limit the amount of the
bond required to stay execution of a judgment in a civil
litigation during an appeal." [Before the committee was the
proposed committee substitute (CS) for HB 103, Version 25-
LS0401\E, Bailey, 5/2/07, which had been adopted as the work
draft earlier in the meeting.]
1:50:51 PM
VICTOR SCHWARTZ, Attorney at Law, Co-Chair, Civil Justice Task
Force, stated that he serves as the private sector co-chair,
along with U.S. Senator Kirk Dillard, Illinois, for ALEC's Civil
Justice Task Force. He explained that he coauthored a case book
often used in law schools, and offered a brief history of his
work, including that for the past twenty years he has worked on
the defense side. He stated that the views he is presenting
today are on behalf of ALEC, but basically he shares the same
views. He stated that he became interested in appeal bonds
about 15 years ago because the laws were arcane. He related
that typically, a person would sue a landlord, win the case, an
appeal would be filed, and the landlord would intentionally
dissipate the assets or place the assets in a "bogus" account
and the person could not execute the judgment. He stated its
purpose was legitimate. However, in some instances in which
large judgments are awarded, the party may not be financially
able to post the appeal bond.
MR. SCHWARTZ offered historical information on several cases,
including one in which the Valdez Fisheries Department
Association (VFDA), a nonprofit operated a fish hatchery in
Valdez and filed for bankruptcy when it faced a $2.1 million
judgment from a failed real estate transaction. The bankruptcy
court found that the defendant had pursued all options in lieu
of bankruptcy. Although judges can exercise some discretion
with appeal bonds, the court didn't in that case. He offered
his understanding that the appeal bond in Alaska is equal to the
amount of the judgment. He mentioned another case, in which
Nome Commercial Company and two individuals declared bankruptcy
after two judgments were filed against them totaling $1.5
million. The bankruptcy court noted that there was
"uncontradicted evidence" that the debtors lacked the ability to
post a supersedeas bond, which would have forced the demise of
their business while the cases were pending appeal before the
Alaska Supreme Court. Finally, Askinuk Corporation, a Native
village corporation, whose shareholders consisted of several
hundred Native Alaskans declared bankruptcy when it could not
obtain a bond on a judgment of $231,000. Due to the size of the
judgment and the corporation's lack of liquidity, the court
wrote that Askinuk was in no position to rely on Rule 204(d),
which grants courts the discretion to reduce a required appeal
bond, he stated.
[Chair Ramras turned the gavel over to Vice Chair Dahlstrom.]
MR. SCHWARTZ opined that some version of ALEC's appeal bond
reform is currently law in 37 states, although he noted that 6
states do not have an appeal bond requirement. He related that
not many states remain that do not put some form of limit on
appeal bonds.
MR. SCHWARTZ stated that provisions in HB 103 would allow the
judge discretion to impose a cap of $5 million or 10 percent of
all appellants' net worth, whichever is lower, on the amount of
a supersedeas bond. The purpose of supersedeas bonds is to
secure the prevailing party's judgment in a lawsuit as the case
goes up on appeal. He pointed out that an exception was placed
in ALEC's model legislation which would allow the defendant to
show by a preponderance of evidence that the assets might be
dissipated to avoid paying the judgment. He said that he is not
aware of any situation in which a plaintiff has been
disappointed. In cases with high verdicts, the defendant has a
right to appeal, whether the defendant is popular or not.
[Vice Chair Dahlstrom returned the gavel to Chair Ramras.]
MR. SCHWARTZ characterized HB 103 as "sound." He posited that
it has worked well in other states and that other states have
not repealed any appeal bond reform. Thus, Alaska can benefit
from the 37 other states that have appeal bond reform. He
characterized the legislation as "fair legislation." He
highlighted that HB 103 does not place any caps on damages or
limit damages. This bill would help to ensure that economic
obstacles will not impede a person's right to appeal.
1:57:36 PM
REPRESENTATIVE HOLMES referred to a printout in members' packets
from the American Tort Reform Association, labeled "Appeal Bond
Reform" that which lists other states' reforms. She stated that
the caps range from $25-$100 million. She pointed out that
seems to create a discrepancy and it appears to her that the
language in the bill would take the state from being one of the
most lax to one of the most restrictive in terms of bond reform.
MR. SCHWARTZ concurred that most of other bond limits are
higher. A lower bond limit gives more people an opportunity to
appeal such as the instance of the $231,000 appeal mentioned
earlier. He stated that on the one hand, this bill would set an
appeal bond limit that would be lower than most states.
However, on the other hand more people can benefit with a lower
limit, he opined.
2:00:35 PM
REPRESENTATIVE SAMUELS recalled past legislation in which
government was one of the parties in an appeal. He further
recalled that the tobacco companies attempted to limit the
appeal bonds. However, the legislature did not do so, he
stated.
MR. SCHWARTZ acknowledged the cases. He stated that appeals
bond reform is currently of interest to small and large
businesses. He opined that government is excluded from HB 103,
as are environmental situations and circumstances that are
important to the state. He explained that ALEC establishes
model legislation. However, it is up to individual state
legislatures to decide the limits that will work best in their
state, he offered.
2:02:26 PM
REPRESENTATIVE GRUENBERG inquired as to whether Mr. Schwartz was
familiar with these types of cases in question. He offered that
plaintiffs often have fewer resources available to them than
defendants. He further inquired as to the rate of bankruptcy
for plaintiffs in appeals cases.
MR. SCHWARTZ stated that plaintiffs are not subject to appeal
bonds, and surmised that plaintiffs might encounter
circumstances in which problems arise. Mr. Schwartz offered his
understanding, at least in cases in which he has been involved,
that when cases have some value and the plaintiffs lose, that
the plaintiff discusses this with their attorney who is on a
contingency fee. He related that in his own 14 years of
plaintiff's work, that if he felt that the verdict was
absolutely wrong, he would make his best judgment if the case
could result in recovery and if so, the case was then appealed.
REPRESENTATIVE GRUENBERG noted that Alaska has a unique court
rule, Alaska Civil Rule 82, which provides that the losing party
bears a portion of the winner's attorney fees. Thus, if a
plaintiff loses, generally the standard is that the plaintiff
must pay 30 percent of the defendant's actual attorney's fees,
which can be substantial, plus all of their costs. He related
that a judgment is entered against that plaintiff and unless the
plaintiff acquires a supersedeas bond, pending the appeal the
defendants execute on the plaintiff and regularly cause
plaintiffs in Alaska to go into bankruptcy or forego their
appeals. He inquired as to whether that changes Mr. Schwartz's
testimony.
MR. SCHWARTZ opined that with problem with unfairness to
plaintiffs, that the state can decide those issues. He offered
that knowledge of the court rule does not change his testimony.
2:06:24 PM
MR. SCHWARTZ, in response to Representative Gruenberg, surmised
that if tort reform is doing harm or causing serious problems
that the committee could address those issues. He offered that
his testimony is based on HB 103 and on ALEC's model
legislation.
2:07:05 PM
REPRESENTATIVE GRUENBERG inquired as to whether he was aware of
a change in insurance industry practice such that the industry
reviews cases in a macro basis rather than an a micro basis. He
surmised that it is a far greater likelihood, particularly in
the insurance industry that the defendants prefer to litigate an
appeal to draw the cases out and dissuade the plaintiffs from
litigating, which would lead them to settle.
MR. SCHWARTZ opined that doesn't occur in the areas of the
country that he is aware of in Virginia and Maryland. He said
that he does not know whether that practice occurs elsewhere in
the country, but that would be willing to research that
information should the committee wish it.
REPRESENTATIVE GRUENBERG referred to the three cases previously
mentioned. He related his understanding that none of the
appellants challenged the court rule and indicated that this
would cause him problems. He further stated that the courts
ordered, but the orders were not challenged. He stated that in
Alaska, one can appeal the ruling on a bond and that would take
place in the context of the appeal such that he/she would appear
before the judge and ask for a bond. If the bond is denied, a
motion can be taken to a single justice on the court, which can
be appealed to the five members of the Alaska Supreme Court.
REPRESENTATIVE GRUENBERG inquired as to whether Mr. Schwartz was
aware that in Alaska one can challenge the ruling on a bond.
MR. SCHWARTZ inquired as to whether the judge has to
automatically stay that, because in other states in which
problems have arisen, one can actually appeal an excessive
appeal bond when there is some room for that, of the failure of
the judge to exercise discretion. He stated that there isn't an
automatic stay; one can appeal, but the bond must be posted,
pending the appeal. He surmised that the person is still in the
same situation.
2:11:47 PM
REPRESENTATIVE GRUENBERG surmised, then, that there would need
to be a motion for a stay of that until the bond issue could be
appealed.
MR. SCHWARTZ noted his agreement.
REPRESENTATIVE GRUENBERG further surmised that the courts may
treat people differently than in other states.
2:13:19 PM
REPRESENTATIVE COGHILL offered his understanding that in the
cases in which appeals could be considered, that the cost was
likely to be so high that the challenge of a court rule would
even "ratchet it up" further. He said that he thought the
reason for a court rule change is evident in that discussion.
REPRESENTATIVE HOLMES inquired as to the mechanics of
determining an appellant's "net worth" under HB 103.
MR. SCHWARTZ answered that materials are presented to the court
to show assets and liabilities. He opined that the court can
require financial statements and then determines the company's
"net worth" and offered that is how it has worked in other
states.
REPRESENTATIVE COGHILL referred to the definition of
"policyholder surplus" in AS 21.90.900(34)(C), and opined that
that definition might be helpful to the committee.
REPRESENTATIVE HOLMES inquired as to whether the opposing party
has an opportunity to question the net worth.
MR. SCHWARTZ answered that it is his understanding that the
opposing party has an opportunity in other states to question
the net worth.
REPRESENTATIVE HOLMES posed a scenario in which insurance
policies are involved. She inquired as to whether the limit
should be set, at the very least, to the limits in the insurance
policy.
MR. SCHWARTZ answered that it depends on the local rules as to
whether the insurance limit information is available.
2:15:57 PM
REPRESENTATIVE GRUENBERG advised that under the rules of
discovery in Alaska, that information would need to be
disclosed.
REPRESENTATIVE HOLMES related her understanding that at least
one of the other states requires the parties against whom the
judgment has been entered to prove hardship. She highlighted
that some judgments are huge and would bankrupt a company. She
posed a scenario in which a person might have a good job, but
that the person might also have a huge debt load such that
his/her actual net worth is very low. She stated that under HB
103, that person would not be required to post a bond.
MR. SCHWARTZ offered that in such situations of that type, the
greatest concern is that the person won't have assets to satisfy
the judgment or the person may take actions, which the bill
protects against. He related his understanding that in other
states since when the appeal bond statutes "kick in" it is with
companies such as dry cleaners, hair salons, or big businesses
such as pharmaceutical companies.
REPRESENTATIVE HOLMES inquired as to whether that amount would
be set at zero.
MR. SCHWARTZ concurred that in instances in which a person had a
zero net worth that the bond would be set at zero.
REPRESENTATIVE HOLMES argued that the person could have a good
income stream and the ability to pay. However, the bill bases
the calculation on the net worth of the person.
2:21:11 PM
REPRESENTATIVE GRUENBERG recalled a California case, in which a
fleet of yellow cabs had incorporated each one separately.
Thus, in the event of an accident in which the cab company was
sued, the party could only receive the value of the one cab. He
inquired as to whether that would be the case under HB 103, that
the plaintiff could only receive the value of one cab.
MR. SCHWARTZ offered to research that issue, if that type of
practice were used. He said that the goal is to ensure that the
net worth of the company as a whole would be what would be
considered.
2:22:51 PM
REPRESENTATIVE HOLMES inquired as to whether the term "net
worth" is defined.
REPRESENTATIVE GRUENBERG noted that AS 21.90.900(34)(C) reads:
(C) for an insurer other than a stock or mutual
insurer, the net worth of the insurer, calculated as
its recorded assets less its liabilities, as
determined by the accounting criteria set out in this
title;
REPRESENTATIVE GRUENBERG related his understanding that "net
worth" is the concept of assets less any liabilities.
2:27:34 PM
MICHAEL WILSON, Coastal Helicopters, the National Federation of
Independent Business (NFIB), stated that his company is Coastal
Helicopters and that he also represents the NFIB. He explained
if he were to attempt to get a bond for what he considered to be
a wrongful judgment that it could put him out of business. He
offered that his company employs 20 to 25 employees and seasonal
employees. He further stated that people that people often view
the aviation companies as "deep pockets." He opined that to
obtain a large bond to appeal a judgment would be detrimental to
his company.
MR. WILSON, in response to Chair Ramras, offered a hypothetical
example in which something were to cause damage to someone's
property. He noted that besides the property damages, the
person could seek huge civil damages, and that would require him
to layoff employees and liquidate assets in order to defend the
appeal for damages. He stated that he could realistically be
placed into bankruptcy.
2:31:42 PM
MR. WILSON, in response to Representative Gruenberg, answered
that he does have insurance and that he would be defended by the
insurance company in the event of property damage. In further
response to Representative Gruenberg, Mr. Wilson stated he would
not object to providing his "net worth."
REPRESENTATIVE GRUENBERG pointed out that HB 103 stipulates that
the amount of the bond is the lesser of $5 million or 10
percent. He stated that in the event of an appeal, his assets
and liabilities would be filed and made public. He stated that
currently the bond is based on the amount of the judgment and is
posted by the insurance company.
MR. WILSON responded that he did not think that it would make
any difference. His competitors would have an idea regarding
his assets and he did not think that his competitors would gain
an advantage by knowing his net worth.
REPRESENTATIVE GRUENBERG referred to page 2, lines 2-3, and
inquired as to whether Mr. Wilson would want the information
disclosed as a condition of appeal.
2:34:53 PM
MR. SCHWARTZ answered that in some states the information is
provided to the courts under seal in the same manner as
information on trade secrets would be given to the court.
REPRESENTATIVE GRUENBERG argued that is not a provision in
HB 103.
2:35:43 PM
WAYNE STEVENS, President, Alaska State Chamber of Commerce
(ASCC), referred to a letter of support for HB 103 from the ASCC
that is in committee members' packets. He stated that the ASCC
supports HB 103, which limits the size of appeal bonds as both
sides work through the court process. He stated that tort
reform has long been a priority of the ASCC. He offered his
belief that HB 103 is the "right step" in creating a better
appeal process for keeping businesses whole while ensuring that
plaintiffs who obtain judgments will have solvent defendants
from whom they can collect damages.
REPRESENTATIVE GRUENBERG noted that Version E contains an
additional provision that was not in the original bill. He
referred to page 2, lines 11-12, which would exempt actions or
proceedings in which the state or another governmental entity is
a party. He surmised that is to provide protection to the state
and other governmental agencies when they prevail. Thus, it
would enable "the state's sword to pierce through" this rather
than to use a shield. He inquired as to whether other people
should be given the same status as the state.
2:38:10 PM
ANNE JOHNSON, Assistant Attorney General, Oil, Gas & Mining
Section, Civil Division (Juneau), Department of Law (DOL),
concurred that the state would be exempt.
REPRESENTATIVE GRUENBERG noted that if the state were to
prevail, as an appellant, that it could require the normal bond
to be posted.
MS. JOHNSON answered that the state favors the language listed
on page 2, lines 11-12 of the bill. In further response to
Representative Gruenberg, Ms. Johnson acknowledged that she has
been a party to some limited discussions regarding the language
and that she supports it.
2:39:34 PM
REPRESENTATIVE HOLMES inquired as to whether "net worth" is
defined.
MS. JOHNSON answered that "net worth" is not defined in this
statute. She offered to research whether "net worth" is defined
in other statutes.
REPRESENTATIVE HOLMES said that she did not know how "net worth"
would be calculated.
2:40:20 PM
REPRESENTATIVE COGHILL said that assets and liabilities are part
of the formula for defining "net worth." He maintained his view
that arriving at net worth is attainable.
MS. JOHNSON pointed out that "net worth" is not defined in the
statutes. However, common ways to determine net worth exist,
she opined.
REPRESENTATIVE HOLMES stressed that that the committee is not
aware of how "net worth" is defined at this point.
REPRESENTATIVE COGHILL objected to the concept that "net worth"
could not be defined and related to his personal experiences in
business that routinely require "net worth" determinations.
REPRESENTATIVE HOLMES maintained her concern that for purposes
of HB 103, she would like to know [how "net worth" will be
determined]. She stated that the court rules are being revised
in several places in the bill. She noted that the bond is
posted in the amount of the judgment plus appeals cost and
interest, which she opined is limited to $5 million or 10
percent of the net worth with exceptions such as in cases of
dissipating assets. She referred to page 2, lines 7-8, which
requires the appellant to post a bond in an amount up to the
full amount of the judgment. However, this does not allow the
appeals cost and interest to be added back in, she stated. She
noted the language is also found on page 4, line 10, in the
proposed changes to Rule 205. Thus, if the goal is to reinstate
the full bond in instances in which the appellant is dissipating
assets, this bill does not really institute the full bond.
MS. JOHNSON answered that it is not intended to do so.
2:43:50 PM
REPRESENTATIVE GRUENBERG surmised that if the question is
whether $5 million is more or less than the appellant's net
worth, that would involve a trial within a trial to make that
determination.
MS. JOHNSON said it would depend on how "net worth" is defined.
REPRESENTATIVE GRUENBERG questioned whether even if the term
were defined, that would involve considerable proof.
MS. JOHNSON acknowledged that it could, and it possibly could
lead to a dispute of which amount is greater.
REPRESENTATIVE GRUENBERG related that the court would have to
make a fairly complicated factual finding as to the appellant's
net worth.
MS. JOHNSON acknowledged that point.
REPRESENTATIVE HOLMES inquired as to how the appellee would
prove that the appellant was dissipating assets. She inquired
as to whether rights of subpoena would be allowed to obtain the
required evidence.
MS. JOHNSON said that she did not yet know since that is not
part of current law. She surmised, however, that a hearing
would be conducted that would probably include discovery of the
income statements and balance sheets. However, she stated she
could not speak from experience.
REPRESENTATIVE HOLMES referred to page 2, line 5, and asked if
the language "proves by a preponderance of the evidence" in
HB 103 is sufficient or if the evidence should be stipulated,
since currently that language doesn't provide much guidance.
MS. JOHNSON offered that [the proof of dissipating evidence]
could possibly be made clearer by adoption of regulations. She
stated that the court rule change does provide the burden of
proof, but it doesn't discuss what type of forum the issue would
be held in, such as if the evidence will be submitted at a
hearing before the same judge. Thus, she agreed there is a lack
of clarity in this matter.
2:48:43 PM
REPRESENTATIVE COGHILL stated that the court rule stipulates
that on appeal the court will consider the petitioner's views.
Thus, the court already has this matter under consideration, he
argued. He opined that the [net worth] would be decided at a
further hearing or a separate hearing based on the appeal.
MS. JOHNSON noted her agreement that it would be determined at
"some type of" hearing.
REPRESENTATIVE COGHILL stated that it did not seem unreasonable
to him that the court would assign another hearing for the
discovery.
MS. JOHNSON answered that it is quite possible the court would
do so.
REPRESENTATIVE HOLMES referred to page 4, lines 23-24, asked
which cases this would apply to and whether bonds that have
already been posted could be reduced.
MS. JOHNSON offered her understanding that the language is
straightforward, that HB 103 would apply to cases pending on or
filed on or after the date it becomes law. Thus, if an action
is pending in the court system, the provisions in HB 103 would
apply to it.
REPRESENTATIVE HOLMES asked whether something in the middle of
an appeal would result in the recalculation of bonds and if
persons could ask to have the bonds raised.
MS. JOHNSON answered, "Possibly."
2:51:53 PM
REPRESENTATIVE GRUENBERG offered a hypothetical example in which
three parties in different courts filed on basically the same
subject. The language of HB 103 says the amount of the bond
collectively of all appellants may not exceed the lesser of $5
million or 10 percent of all appellants. He inquired as to how
the court would sort through the three separate cases.
MS. JOHNSON explained that when the matter is appealed, the
issue of whether to combine the cases would need to be decided.
She surmised that in Representative Gruenberg's hypothetical
example, the three separate cases would probably be kept
separate.
REPRESENTATIVE GRUENBERG pointed out that if the cases were
consolidated, it could be characterized as a tangled web due to
the multiple parties.
MS. JOHNSON noted her agreement.
[HB 103, Version E, was held over.]
HB 400 - MITIGATING FACTOR: CARE FOR DRUG OVERDOSE
2:54:23 PM
CHAIR RAMRAS announced that the final order of business would be
HOUSE BILL NO. 400, "An Act relating to a person who seeks
medical assistance for a person experiencing a drug overdose."
2:55:28 PM
AURORA HAUKE, Staff to Representative Beth Kerttula, Alaska
State Legislature, relayed that Representative Kerttula, sponsor
of HB 400, introduced the bill to allow for a mitigating factor
for calling "911" to obtain emergency help for someone
experiencing a drug overdose. In response to Representative
Samuels, she explained that the way HB 400 was drafted does not
require the person in need of help to actually have overdosed on
drugs. The bill allows for consideration of factors during
sentencing if the person who called "911" thought that the
person had overdosed on drugs.
CHAIR RAMRAS relayed that from his experience as a hotel owner,
drug overdoses happen and some people can be saved with the
provisions in HB 400.
2:59:17 PM
REPRESENTATIVE DAHLSTROM moved to report HB 400 out of committee
with individual recommendations and the accompanying fiscal
notes. There being no objection, HB 400 was reported from the
House Judiciary Standing Committee.
ADJOURNMENT
There being no further business before the committee, the House
Judiciary Standing Committee meeting was adjourned at 2:59 p.m.
| Document Name | Date/Time | Subjects |
|---|