Legislature(1997 - 1998)
03/12/1997 01:45 PM Senate JUD
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* first hearing in first committee of referral
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SENATE JUDICIARY COMMITTEE
March 12, 1997
1:45 p.m.
MEMBERS PRESENT
Senator Robin Taylor, Chair
Senator Drue Pearce, Vice-chair
Senator Mike Miller
Senator Johnny Ellis
MEMBERS ABSENT
Senator Sean Parnell
COMMITTEE CALENDAR
SENATE BILL NO. 15
"An Act relating to punitive damages in a civil action for
discrimination related to employment; relating to arbitration in a
civil action; amending Rules 79(b) and 82(b), Alaska Rules of Civil
Procedure, and repealing Rule 72.1, Alaska Rules of Civil
Procedure; and providing for an effective date."
PASSED CSSB 15(JUD) FROM COMMITTEE WITH INDIVIDUAL
RECOMMENDATIONS
PREVIOUS SENATE COMMITTEE ACTION
No previous Senate committee action to report.
WITNESS REGISTER
Mike Ford
Legislative Legal and Research Services
Legislative Affairs Agency
130 Seward St., Ste 409
Juneau, AK 99801-2105
POSITION STATEMENT: Gave a sectional analysis of CSSB 15(JUD)
Jeff Bush
Deputy Commissioner
Department of Commerce & Economic
Development
P.O. Box 110800
Juneau, AK 99811-0800
POSITION STATEMENT: Supports CSSB 15(JUD)
Doug Wooliver
Alaska Court System
820 W. 4th Ave.
Anchorage, AK 99501-2005
POSITION STATEMENT: Discussed fiscal note for SB 15
Phillip Volland
211 H Street
Anchorage, AK
POSITION STATEMENT: Supports CSSB 15(JUD)
Pam Labolle
Alaska State Chamber of Commerce
217 Second St. #201
Juneau, AK 99801
POSITION STATEMENT: Discussed the Chamber's position on tort
reform
Michael Lessmeier
State Farm Insurance
One Sealaska Plaza #303
Juneau, Alaska 99801
POSITION STATEMENT: Commented on SB 15
ACTION NARRATIVE
TAPE 97-20, SIDE A
Number 00
CHAIRMAN ROBIN TAYLOR called the Judiciary Committee meeting to
order at 1:45 p.m. Present were Senators Miller, Pearce, and Chair
Taylor. The committee took up SB 15. Chair Taylor asked Mr. Mike
Ford, legislative drafter of SB 15 to explain the proposed
committee substitute.
SB 15 CIVIL ARBITRATION AND PUNITIVE DAMAGES
SENATOR MILLER moved to adopt CSSB 15(JUD) (version O-LSO169\B,
dated 3/11/97). There being no objection, the motion carried.
MIKE FORD , an attorney with Legislative Legal and Research
Services, gave the following sectional analysis of CSSB 15(JUD).
Section 1 is the purpose section.
CHAIRMAN TAYLOR asked whether Section 1 was from SB 15 or the Task
Force Report. MR. FORD replied Section 1 was in the Governor's
bill which was rolled into SB 15. CHAIRMAN TAYLOR clarified that
was the Task Force version.
MR. FORD continued. Section 2 is a housekeeping provision that was
added to avoid a single subject problem and fixes the interest rate
at the same rate under existing law.
Section 3 deals with the statute of limitations for certain
property actions and provides a six year time limit for bringing an
action for waste or trespass to real property.
Section 4 is a new section of law dealing with contract actions.
It was originally a part of AS 09.10.050 but the Task Force
recommended it be pulled out. The new section provides a three-
year time period to file an action on a contract or liability
except as otherwise provided by AS 09.10.040.
CHAIRMAN TAYLOR asked for clarification of the exceptions. MR.
FORD believed AS 09.10.040 pertains to judgments and sealed
instruments.
067
CHAIRMAN TAYLOR questioned whether Section 4 applies to the statute
of limitations on architects and engineers. MR. FORD replied if
the action is characterized as a contract action, it would be
covered by the three-year time period, assuming no other provision
of law provides a different time period. CHAIRMAN TAYLOR asked if
Section 4 reduces the time period for contract actions from six to
three years. MR. FORD said that is correct.
MR. FORD explained Section 5 applies the statute of limitations for
personal injury to personal property and specific recovery of that
property and reduces the current six-year period to file actions to
a two-year period.
Section 6 raises the standard for recovery of non-economic damages
for personal injury by requiring that severe disfigurement or
severe physical impairment be shown, rather than disfigurement or
severe physical impairment, to be excepted from the limit under AS
09.17.010.
Section 7 repeals and re-enacts the punitive damages provision and
limits recovery in a number of ways. Existing law requires clear
and convincing evidence to support an award of punitive damages.
Section 7 requires clear and convincing evidence of outrageous
conduct, conduct resulting from malicious or hostile feelings
toward the plaintiff, or reckless indifference to the rights or
safety of others be shown. It also creates a two-tiered system and
separates the process of determining whether one is entitled to
punitive damages from the amount of punitive damages to be awarded.
Number 141
CHAIRMAN TAYLOR asked Mr. Ford whether each provision incorporated
into CSSB 15(JUD) was specifically found in the Task Force report,
or whether the Governor or his drafters added other provisions.
MR. FORD could not answer.
MR. FORD emphasized Section 7 is a major rewrite that contains
limitations on the amount of punitive damage awards and changes the
process of awarding punitive damages.
CHAIRMAN TAYLOR stated he included, in SB 15, a provision creating
a specific cap on punitive damages in wrongful discharge cases that
reflects what is provided under federal law. He noted the amounts
in CSSB 15(JUD) are higher. He asked whether the wrongful
discharge provision was incorporated into CSSB 15(JUD), or whether
the bill needs to be amended. MR. FORD said an amendment will be
necessary.
MR. FORD continued. Section 8 adds the word "intentional" to
clarify that fault includes negligent, reckless, or intentional
acts.
CHAIRMAN TAYLOR explained some defenses, argued on behalf of
defendants being sued for negligence or recklessness under existing
statute, are based on intentional actions because those actions are
not illegal.
MR. FORD explained Section 9 amends the offer of judgment statute
to encourage settlements by adjusting the interest rate, depending
on when an offer is made, and who offers it.
Number 201
CHAIRMAN TAYLOR advised Section 9 will not act as a significant
incentive for either side to settle if the amount in question is
$50,000, because the interest penalty is small relative to the
additional discovery and attorney fees required to carry a case
through to trial. He would prefer to require the party who fails
to accept an offer of judgment, after a certain date, to pay actual
attorney fees from that day forward.
MR. FORD advised Section 10 changes the rate of interest on
judgments and decrees from a fixed 10.5 percent per year to a
floating rate comprised of the five-year constant maturity United
States treasury note rate, plus 1.5 percent. By amending this
provision of law, several other provisions of existing law, based
on this same rate, were affected, so language was added to clarify
existing law continues to apply to all other provisions.
CHAIRMAN TAYLOR asked if Section 10 affects Section 2. MR. FORD
noted Section 2 was added because of the changes made in Sections
10 and 11 and maintains existing law for this type of interest
rate.
CHAIRMAN TAYLOR questioned why banks should be allowed to charge an
interest rate of 10.5 percent, when litigants cannot get more than
the floating rate. MR. FORD commented the problem lies in the fact
that if the provision is left alone, things other than civil
actions will be affected, such as interest rates for banking. That
will cause trouble under the single subject rule. This route was
taken to maintain that provision as is, rather than try to match
the change in AS 09.30.070. The problem was: does one violate the
single subject rule of the Constitution, or does one add provisions
that maintain the existing rate in those sections of law.
Number 247
CHAIRMAN TAYLOR inquired whether a bank will get 10.5 percent when
it forecloses while the other litigants are stuck with the floating
rate. MR. FORD answered Section 10 applies to a rate of interest
on a judgment or decree.
MR. FORD explained Section 12 establishes a pilot project intended
to determine the effectiveness of an alternative dispute resolution
system. Beginning in January of 1998, certain kinds of cases filed
in Superior Court in the Third Judicial District will be funneled
through the alternative dispute system. The project will operate
for at least five years. Section 12 requires the Supreme Court to
determine criteria to screen cases and to establish minimum
qualifications for individuals who conduct the dispute resolution
procedure. Section 12 also requires mutual agreement on the choice
of a mediator; that fees and costs be equally shared among the
parties; and project evaluation methods.
Number 296
CHAIRMAN TAYLOR asked how Section 12 meshes with the mandatory
arbitration provision (Section 15) in the bill. MR. FORD thought
the concepts were similar but that Section 12 is narrower in scope
because it only applies to the Third Judicial District and will
operate for a minimum of five years. He commented the committee
might want to choose either one or the other provision.
CHAIRMAN TAYLOR asked whether Section 12 has the same penalty and
fee aspects as the arbitration provision. MR. FORD answered
Section 12 replaces existing law which allows arbitration but does
not require it. Both Sections 12 and 15 require arbitration in
certain instances but Section 12 contains a number of ways to avoid
alternative dispute resolution.
CHAIRMAN TAYLOR asked if a person can opt in or out of alternative
dispute resolution. MR. FORD advised Section 12 includes a
screening structure for cases but he was unsure whether a party has
the right to choose not to use that system. CHAIRMAN TAYLOR noted
Section 12 allows the Court to decide who will use it, while
Section 15 requires mandatory arbitration.
CHAIRMAN TAYLOR thought the very selective alternative dispute
resolution program sets up a dual system because it only applies to
certain cases in Anchorage, while cases under $100,000 elsewhere
will be required to use binding arbitration. MR. FORD repeated the
alternative dispute resolution system is a pilot project, and
although the sections do set up a dual system, they do not conflict
with each other. He repeated it might be to the committee's
benefit to review both sections and choose one.
Number 344
MR. FORD described Section 13 as a provision that tags the interest
rate to the floating rate in AS 09.30.070 and is consistent with
Sections 10 and 11. If judgment is due from the State, it would
include the floating interest rate. CHAIRMAN TAYLOR commented
Section 13 only changes the interest rate, not punitive damage
awards.
MR. FORD explained Section 14 fixes the interest rate at 10.5
percent per year, whereas it was previously by reference to the
fixed rate in AS 09.30.070(a). Section 14 was added to maintain
the status quo without amending the rate to be a floating rate.
CHAIRMAN TAYLOR remarked the section provides an incentive hammer
on condemnation awards. MR. FORD noted this section will avoid a
single subject problem.
MR. FORD explained Section 15 is a mandatory arbitration provision
that applies statewide. Subsection (b) contains exclusions. To
prevent any overlap, an action can be excluded if it falls under
the alternative dispute resolution procedure.
CHAIRMAN TAYLOR asked if Section 15 provides for costs and
penalties if one fails to accept the arbitrator's award. MR. FORD
said Section 15 provides that actual attorneys' fees and costs are
awarded if one rejects an arbitrator's decision, litigates, and
loses (page 11, lines 5-7). He pointed out the pilot project does
not contain a similar provision. CHAIRMAN TAYLOR noted parties
could go through alternative dispute resolution then start over in
Superior Court; but that will merely add another layer of
litigation to the system, rather than slow it down.
MR. FORD indicated Section 16 prohibits recovery of personal injury
damages if one was engaged in conduct that constitutes a felony.
This language is narrower than previous provisions in that if one
is engaged in the commission of a felony and convicted, and the
felony substantially contributed to the personal injury or death,
no damages can be recovered. In addition, if one has not been
convicted, but the conduct constitutes either an unclassified class
A or class B felony, one could also be barred from recovery if
substantial contribution to the injury or death is shown by clear
and convincing evidence. The same applies if one is fleeing after
the commission of an unclassified A or B felony. CHAIRMAN TAYLOR
questioned how that would apply to a bankrobber who, two days after
the robbery, is in a car accident while en route to a bank to
deposit the stolen cash. MR. FORD said the court would have to
decide whether the definition of "fleeing" would apply.
MR. FORD continued. Section 17 requires the Alaska Judicial
Council to collect and evaluate specific information and contains
an exception for certain kinds of cases. The information is
considered confidential but disclosure of summaries and statistics
is allowable.
Number 420
CHAIRMAN TAYLOR asked why this information will not be sent
directly to the Division of Insurance. MR. FORD replied the
Division of Insurance is not equipped to handle this kind of
process; the Alaska Judicial Council has some experience in this
area. CHAIRMAN TAYLOR asked if the information, once compiled,
will be provided to the Division of Insurance. MR. FORD said the
bill does not contain a specific requirement to do so. CHAIRMAN
TAYLOR questioned whether the Division of Insurance currently
receives information about confidential settlements. MR. FORD did
not believe it does.
CHAIRMAN TAYLOR asked whether the Division of Insurance is notified
by the insurance company of claims filed against the company during
a specific year for tax deduction purposes, and of the actual
settlement amount that may occur several years later. MR. FORD
thought the insurance company might have to report allocated
amounts that need to be reserved for particular claims, but did not
know whether the insurance company informs the Division of the
actual settlement amount. CHAIRMAN TAYLOR expressed concern that
if information is compiled, it be distributed to those agencies
that need it.
MR. FORD noted Section 18 requires the director of the Division of
Insurance to compile and report information on the effects of CSSB
15(JUD) on the availability and costs of insurance, and the
financial health and profitability of insurance carriers. The
information is supposed to be compiled in a way that protects the
identity of individual insureds, and then distributed to all
insurers. Section 18 also requires an annual report be provided to
the Governor and the Legislature, and allows the Division of
Insurance to consult with the Alaska Judicial Council as necessary.
Mr. Ford said Section 19 remained in the committee substitute
inadvertently and is unnecessary because AS 18.80.220 was deleted.
Section 20 raises the District Court jurisdiction level from
$50,000 to $100,000. Section 21 amends Civil Rule 16.1, which
establishes procedures for motions to set trials and requires a
meeting of the parties before the scheduling order has been issued.
Section 22 requires that parties, after initial exchange of
disclosure, meet to discuss the nature and basis of their claims in
an effort to settle. There is a proposed discovery plan,
indicating the parties' views and proposals.
Section 23 amends Civil Rule 41 and adds a new paragraph regarding
settlement information consistent with other provisions about
collection of information by the Alaska Judicial Council. It
requires the parties to provide information required under AS
09.68.130. Section 24 amends Civil Rule 68 and requires
adjustments to the rate of interest to be consistent with the
change to the statutory offer of judgment.
Section 25 changes the discovery rule that currently prohibits
discovery from the date the report of the panel has been filed or
80 days have lapsed from the date the case is at issue to 60 days
after selection of the mediation panel. CHAIRMAN TAYLOR asked if
this section applies to medical malpractice cases. MR. FORD said
it does.
Section 26 amends Rule 95(b) and raises the fine amount the court
may impose against an attorney for contempt from $1,000 to $10,000.
Section 27 amends District Court Rules and requires, unless agreed
by the parties or permitted by the court, discovery be limited to
disclosures required under Civil Rule 26(a).
Section 28 adds a new subsection to District Court Rule 4, and
requires that all parties file a joint memorandum to set the case
for trial no later than 180 days after service of the complaint.
It also requires the court to set the trial to commence within
certain time periods. The intent of this section is to reduce time
delays in proceedings in District Court.
Section 29 is an effort to supply settlement information at the
appellate level. This section is consistent with prior sections of
the bill that pertain to collection of information by the Alaska
Judicial Council.
Section 30 contains repealers. A number of the repeals deal with
the change from voluntary to mandatory arbitration. The Title 8
provisions apply to the loss of one's occupational license for
using arbitration as a threat. The provisions under AS 09.55.
pertain to voluntary arbitration and are no longer necessary.
Section 31 repeals conflicting provisions of the Alaska Rules of
Civil Procedure. Sections 32 through 36 are required sections
setting out the amendment of Civil Rules. The first subsection
relates to punitive damages, the remainder inform the court system
that the Legislature intends to change the rules and how that will
be done. Section 37 is the applicability section which allows for
a smooth transition for the incorporation of new provisions.
Section 38 is the severability provision. Section 39 is a
revisor's instruction to make corresponding changes necessary by
the addition of the new provisions in Section 12. Section 40
requires that the Civil Rule changes be adopted by a two-thirds
majority vote of the Legislature for enactment. Section 41 delays
the effective date for Sections 17, 23, and 29 to allow some lead
time. Section 42 contains the generic effective date for all other
provisions.
Number 519
CHAIRMAN TAYLOR asked Mr. Ford to elaborate on the amendment being
prepared that originated in his bill. MR. FORD explained Section
2 of SB 15 is being prepared as an amendment to CSSB 15(JUD), and
limits the amount of punitive damages that can be recovered in an
unlawful employment practice case. The amendment creates a tiered
system for the amount of punitive damages that can be awarded
depending on the number of employees working for the employer.
That provision is in contrast to Section 7(h) of CSSB 15(JUD),
which is the Task Force's idea of how to limit punitive damages in
an employment-related civil action.
TAPE 97-20, SIDE B
CHAIRMAN TAYLOR clarified Section 7(h) of CSSB 15(JUD) provides a
limitation of three times the amount of compensatory damages or the
sum of $500,000, whichever is greater. His proposed amendment
contains a scale from $50,000 to $300,000 maximum.
CHAIRMAN TAYLOR moved to adopt his proposed amendment (#1) to
delete Section 7(h) of CSSB 15(JUD) and insert Section 2 from SB
15. There being no objection, Amendment 1 was adopted.
Number 566
PHILLIP VOLLAND , a private attorney in Anchorage, testified in
general support of CSSB 15(JUD). He clarified he does not agree
with everything in the bill, and does not believe everything will
work, but supports it because he believes it is the obligation of
the Legislature to pass legislation that promotes and protects the
welfare of common citizens in Alaska, not legislation that hurts
them. He believes the best legislation is based on fact, not
rhetoric, perception, or fear, and that if something is not broken,
it does not need to be fixed. He also noted successes in life are
built on compromise and compromise is needed on tort reform. Many
years ago he worked on the sentencing commission. The group
represented individuals from opposite sides of the courtroom with
divergent opinions and was asked to deliberate on a problem and
make recommendations. Those recommendations reflected compromise
based on fact. The Legislature did not adopt those recommendations
but sits at the same crossroad with tort reform. The individuals
who sat on the Governor's Task Force on Civil Justice Reform often
litigated against each other and took radically different views as
to the necessity of tort reform. That group studied the problem,
and based on facts, understood no explosion in tort cases with out-
of-control juries and outrageous punitive damage awards has taken
place in Alaska. The Task Force's recommendations are moderate
and, in large part, tinker with the system in an effort to improve
it. Those recommendations are embodied in CSSB 15(JUD).
In response to Chair Taylor's question about whether CSSB 15(JUD)
contains only the Task Force's recommendations, MR. VOLLAND said it
does with the exceptions of Sections 12 and 15, and the changes to
Section 12 are not conceptual. He repeated that although he does
not agree with all of the Task Force recommendations, those
recommendations are moderate, thoughtful, based on fact and hurt no
one.
Number 519
CHAIRMAN TAYLOR asked Mr. Volland if he served on the Task Force.
MR. VOLLAND said he did not.
DOUG WOOLIVER , administrative attorney to the Alaska Court System,
commented on the Court System's fiscal note which is based on SB
15. Last year when a similar provision was added to HB 158, the
Court System asked for a specific exception for small claims cases
so that those cases are not sent to mandatory arbitration. The
Court System's fiscal note reflects the fact that those small
claims cases are not intended to be covered under SB 15, now
Section 15 of CSSB 15(JUD). There were approximately 10,000 small
claims cases filed last year, and although a lot of those are not
tort cases, many of them are.
CHAIRMAN TAYLOR stated he did not intend to put small claims under
mandatory arbitration, and asked Mr. Wooliver to submit further
clarifying language to be deliberated by the Finance Committee.
MR. FORD noted he prepared an amendment on that subject last
session that he could incorporate into the bill.
CHAIRMAN TAYLOR asked if any committee member objected to adopting
the conceptual amendment (#2), the substance being to make certain
that those cases classed as small claims, whatever that
jurisdiction is now or in the future, will not be required to go
through mandatory arbitration. There being no objection to
Amendment 2, it was adopted.
Number 483
MR. WOOLIVER requested the committee delete the immediate effective
date in CSSB 15(JUD) on all the court rule changes, because the
court system will need additional time to implement those changes.
He asked for either no effective date, giving the court 90 days
after signed by the Governor, or a later effective date. CHAIRMAN
TAYLOR asked if there was any objection to delete the effective
dates for the court rules (Amendment 3). There being no objection,
Amendment 3 was adopted.
CHAIRMAN TAYLOR asked Mr. Wooliver why the Court System submitted
a fiscal note with additional costs for services it currently
provides. MR. WOOLIVER stated the Court System does not provide
arbitration services. CHAIRMAN TAYLOR countered the Court System
provides courtroom services, and the Legislature funds district
attorneys, public defenders, and other personnel for civil cases.
MR. WOOLIVER replied about 95 percent of civil cases are settled.
If CSSB 15(JUD) is enacted, all cases will have to go to
arbitration, regardless of whether they would have been settled.
CHAIRMAN TAYLOR disagreed because those parties could settle before
they are forced to go into the arbitration hearing and believed
there is no reason to assume that a higher number will be forced to
go into a full arbitration hearing. This bill will only force
settlement to occur faster.
MR. WOOLIVER said the court will have to pay the cost for indigents
to go to arbitration, and the fiscal note analysis points out there
are over 1,000 cases per year that would fall under the mandatory
arbitration provision. CHAIRMAN TAYLOR reiterated 95 percent of
those cases will settle, according to court statistics. MR.
WOOLIVER remarked most cases do not settle within the first month
of filing. CHAIRMAN TAYLOR commented that is because the Court
System provides no incentive to settle during that period of time.
Under CSSB 15(JUD) the hammer falls within a short period of time,
and the parties' attention will be focussed on an earlier date for
settlement. He noted the Court System is assuming every case will
go to trial. MR. WOOLIVER clarified the Court System is assuming
every case will go to arbitration, but not to trial.
CHAIRMAN TAYLOR asked what costs are associated with arbitration.
MR. WOOLIVER said the cost of arbitration services is $150 to $175
per hour. CHAIRMAN TAYLOR asked what services would be required if
the parties settle, other than the court services now required.
MR. WOOLIVER replied if a party settles, the court has no expenses.
CHAIRMAN TAYLOR stated someone had to file the complaint and the
case had to be calendared and monitored. MR. WOOLIVER admitted the
court has some costs but the majority of the costs associated with
civil litigation is the litigation.
CHAIRMAN TAYLOR asked why the fiscal note does not reflect a
reduction in costs. MR. WOOLIVER replied the Court System does not
foresee a significant reduction in costs. CHAIRMAN TAYLOR noted
the mandatory arbitration requirement in the State of Washington
eliminated 50 percent of the civil litigation. He asked why the
Court System will not see any savings if 50 percent of its civil
calendar is eliminated. MR. WOOLIVER said the bill will not
eliminate 50 percent of the cases that go to trial, which is only
five percent anyway. The trials are where the bulk of the Court
System's expenses come from. CHAIRMAN TAYLOR commented Mr.
Wooliver cited filings, not cases. MR. WOOLIVER replied that is
because all filings will be required to go to arbitration.
Number 424
PAM LABOLLE , President of the Alaska State Chamber of Commerce,
stated she cannot speak to the committee substitute or amendments,
but would like to address the provisions the business community in
Alaska believes will create tort reform. Some of those provisions
are contained in CSSB 15(JUD); the following are not.
The business community wants an eight year statute of repose.
CHAIRMAN TAYLOR noted that provision pertains to architects and
engineers and was unanimously rejected by the Task Force. MS.
LABOLLE asserted the Alaska State Chamber has not accepted the Task
Force Report as its position. CHAIRMAN TAYLOR said he was not
suggesting it had, rather that the State Chamber had specific
members, including Representative Porter, sitting on that
committee, who found no objection to removing that provision. MS.
LABOLLE replied to her knowledge, Representative Porter is not a
member of the Alaska State Chamber of Commerce. CHAIRMAN TAYLOR
asked if anyone on the Task Force represented the Chamber's views.
MS. LABOLLE said in some cases, apparently not.
MS. LABOLLE continued discussing the State Chamber's position.
Regarding the limitation of actions against health care providers,
the claim should occur before the age of six unless the action is
commenced before the person's eighth birthday. A cap on non-
economic damages should be set at $300,000 or three times the
amount of compensatory damages.
MS. LABOLLE announced all of the provisions supported by the State
Chamber of Commerce are contained in the initiative on tort reform
it is filing. CHAIRMAN TAYLOR questioned why the Legislature is
wasting its time, since every issue can be decided via initiative.
MS. LABOLLE said the Chamber would prefer legislation. CHAIRMAN
TAYLOR said legislation requires compromise.
MS. LABOLLE explained the initiative establishes that 75 percent of
punitive damages would revert to the State. CHAIRMAN TAYLOR asked
if that was discussed by the Task Force. SENATOR ELLIS replied it
was discussed extensively and rejected unanimously. He explained
that although some members of the Task Force are members of the
State Chamber of Commerce, they were not appointed as official
representatives of that organization.
MS. LABOLLE stated the Chamber also supports the inclusion of
collateral benefits, allocation of damages, civil liability of
hospitals for non-employees, and damages resulting from the
commission of a felony or while under the influence of alcohol or
drugs. Regarding the latter, CHAIRMAN TAYLOR said that would
permit one to run over any and all drunks and not be liable. MS.
LABOLLE noted the Chamber's intent is to prevent a person who is
drunk and hurts him/herself from suing another party. SENATOR
ELLIS advised that idea was rejected by the Task Force on an 8 to
5 vote.
Number 309
MS. LABOLLE asked if, among the Task Force votes on the provisions,
the worst case scenario was two dissenting opinions in one
instance. CHAIRMAN TAYLOR said it was 8-5-1, and that vote was on
the alcohol and drug impairment provision.
MIKE LESSMEIER , representing State Farm Insurance, addressed SB 15,
because he was unfamiliar with the committee substitute. He noted
although he and Chair Taylor take different positions on tort
reform, there are some areas they agree upon. One of those things
is a meaningful offer of judgment provision about loser pay. He
believes the offer of judgment provision in the committee
substitute is no better than what currently exists.
He expressed the following concerns about the arbitration
provision. The first concern is who will pay for the arbitrator.
Arbitration can be more expensive than a court proceeding because
the parties have to hire an attorney and a half. Also, there is no
offer of judgment provision in the arbitration language. The third
concern is the admissibility of the arbitrator's report in court.
In the event a party is dissatisfied with an arbitrator's decision,
and the sanction is actual costs and attorneys' fees if one loses
at the jury trial, the deck ends up being stacked. There is no
reason to further stack the deck with the admissibility of an
arbitrator's report. A jury is more capable than a single
individual of crafting a quality decision. The arbitration
provision does not contain a method for challenging the
arbitrator's decision, or does not require that the arbitrator have
no connection to either party.
Number 221
CHAIRMAN TAYLOR asked Mr. Lessmeier if he ever tried a case on
behalf of State Farm before a judge. MR. LESSMEIER said he had.
CHAIRMAN TAYLOR stated it is probably rare to not utilize a jury.
MR. LESSMEIER felt the challenge is to create an efficient
alternative to a system that is heavily dependent upon discovery,
takes too long, and is too expensive. He believed the problem with
arbitration thus far is its lack of structure. He spent a lot of
time last session drafting an arbitration provision that was
modelled on the Washington provision that addresses these concerns.
In regard to the current medical malpractice law, he said one can
conduct discovery, regardless of whether one receives a panel
report, within 80 days of the filing of an answer. The Supreme
Court determined the stay on discovery only lasts 80 days from the
filing of an answer.
CHAIRMAN TAYLOR asked Mr. Lessmeier if he is opposed to the 60 day
time limit in the bill. MR. LESSMEIER said it does not matter,
since the Supreme Court has ruled, as a matter of constitutional
law, that the parties may conduct discovery regardless of when that
report is issued.
MR. LESSMEIER discussed the issue of punitive damages. He sees
punitive damage claims awarded in a substantial portion of the
cases he handles in Southeast Alaska. A research study, named The
Role of the Punitive Damages in Civil Litigation; New Evidence from
Lawsuit Filings, determined that anyone who focusses solely on the
actual awards is missing the boat. Each claim is expensive to
defend, takes on average one-third longer, and gives the party
making the claim significant leverage in the settlement process. He
supports efforts to place a reasonable limit on punitive damages
and asked that the limit be meaningful.
CHAIRMAN TAYLOR asked Mr. Lessmeier if he supports Ms. LaBolle's
proposal. MR. LESSMEIER responded he would support a proposal that
limits punitive damages to three times economic damages or
$300,000. CSSB 15(JUD) contains a cap that is not a cap: the
reason being the exception could be said to swallow the rule.
CHAIRMAN TAYLOR explained the amendment narrowly applies to
punitive damages for cases involving people suing for wrongful
termination and an unlawful employment practice. MR. LESSMEIER
commented State Farm supports a cap of $300,000 for all cases.
MR. FORD clarified CSSB 15(JUD) contains a cap of three times
compensatory damages or $500,000, whichever is greater, however
there are exceptions. Subsection (g) provides an exception for
conduct motivated by financial gain.
Number 103
CHAIRMAN TAYLOR asked Mr. Lessmeier if he believes the jury should
not be allowed to take into consideration that a person was engaged
in criminal conduct with the intent to make a profit and did so.
MR. LESSMEIER replied a persons' conduct does not have to be
criminal for punitive damages to be awarded and the language in the
bill is much broader than that. Every business is in business to
make a profit so one could make the argument that every business
activity is designed to make a profit. This bill could create
endless litigation over whether this exception should apply. In
his view, the exception will swallow the rule, resulting in a cap
that is not a cap.
CHAIRMAN TAYLOR questioned how one could come up with a cap that
encompasses the most outrageous conduct that could be contemplated.
MR. LESSMEIER said with any tort rule, one can find a situation
that does not fit. He believes society is better off in general,
if some outer limits are applied. The State of Washington's
arbitration provision is very effective. That state does not have
punitive damages. He repeated the cap must be meaningful.
MR. LESSMEIER'S final comment was in regard to the fact that
insurance rates will change as a result of legislation that is
passed because State Farm determines statewide rates by its loss
experience in Alaska.
CHAIRMAN TAYLOR asked Mr. Lessmeier if he disagrees with the
definition of what constitutes punitive conduct on page 3. MR.
LESSMEIER replied he thinks that was an intent, on the part of the
drafter, to codify existing law, and he does not disagree with it.
CHAIRMAN TAYLOR said he agrees with Mr. Lessmeier that more
complaints contain punitive damage claims and that the punitive
damage claim is used to leverage other aspects of the case for
discovery purposes. He noted Mr. Lessmeier has not informed the
committee of any cases he has had in which punitive damages were
awarded against State Farm.
TAPE 97-21, SIDE A
Number 000
JEFF BUSH , Deputy Commissioner of the Department of Commerce and
Economic Development, and a member of the Governor's Task Force on
Civil Justice Reform, testified on behalf of the Administration.
He expressed support for the committee substitute since much of it
incorporates sections from the Task Force's recommendations. He
commented the procedures committee of the Task Force spent a great
deal of time on the issue of collection of information by the
Alaska Judicial Council. The language in the bill was crafted
after a great deal of work, mostly by the Judicial Council in
consultation with the Division of Insurance. He assured the
committee the Task Force recommendations were discussed thoroughly.
Mr. Bush stated the Administration's basic premise on the issue of
tort reform, is that the problem lies in the fact that for every
dollar paid by an insurance company into the system for claims,
about 40 cents ends up in the victim's pocket. The goal was not
how to reduce the amount the insurance company pays, but how to
reduce the 60 percent siphoned off by the system and place it back
into either the insurance company's pocket or the victim's pocket.
CSSB 15(JUD) addresses the issues of how to speed up the settlement
process and make it less expensive to the parties.
MR. BUSH discussed specific provisions in CSSB 15(JUD). The
Administration disagrees with the Chamber of Commerce on the
statute of repose, because the victim, who is at no fault, would
lose his or her right to recover for injuries simply because of the
passage of time. If a house collapsed after the eight year statute
of repose was up, the victim would have no remedy to recover for
injuries. The caps on punitive damages provision in the committee
substitute is a compromise among almost everyone who has worked on
this issue. Caps on non-economic damages are more problematic
because they hurt people with severe injuries because if one does
not have over $300,000 in non-economic damages or pain and
suffering, the cap will not apply anyway. That approach does not
deal with inefficiencies in the system, and merely takes money out
of the pocket of an injured party and puts it back in the pocket of
an insurance company.
Regarding the mandatory arbitration section, MR. BUSH said he
raised the same questions with the Court System regarding the cost
of implementing alternative dispute resolution. He stated he does
not understand why the Court System recognizes the cost of such a
program but refuses to recognize the savings. Every empirical
study available says that court costs almost break even using
alternative dispute resolution. He suggested the problem with the
section, as written, is that it creates some potential
inconsistencies when meshed with the rest of the bill. The Task
Force essentially rejected mandatory arbitration, and in exchange,
adopted the proposed alternative dispute resolutions (early neutral
evaluation and mediation), and for the $100,000 or less cases, an
expedited District Court case process which requires District Court
cases to go to trial within 270 days. Instead of setting up a
mandatory arbitration system for $100,000 cases, the Task Force
decided to create a quick, expedited process run through the
District Court. The committee substitute now has a District Court
provision with a 270 day process that will apply to the identical
cases subject to mandatory arbitration. He was unsure how those
two provisions will interplay.
CHAIRMAN TAYLOR said his fear is that nobody will go to District
Court because parties can get an automatic appeal to Supreme Court.
MR. BUSH replied that is why no one goes to District Court today,
but the incentive to use it, provided in alternative dispute
resolution, is that one will get a decision within 270 days, rather
than four or five years, and the amount of discovery is restricted
which will lower costs. This new approach was an attempt to create
a process that would fit between small claims and a full-blown
Superior Court trial by making the District Court a useful civil
court. He thought the mandatory arbitration is a reasonable
approach, and believed providing multiple processes in the bill
could be advantageous, because there will be more places to fit
cases, and a comparison of the different approaches can be made to
determine which works best.
Number 238
CHAIRMAN TAYLOR asked Mr. Bush to comment on the Task Force's
deliberation of the statute of repose for architects/engineers.
MR. BUSH replied the current statute of repose only applies to
architects, the proposal in HB 58 applies to everyone and limits
the time period for bringing an action to eight years. HB 58 does
contain minor exceptions, for example, for long-term exposure to
hazardous waste, or leaving a sponge in a body during surgery.
CHAIRMAN TAYLOR stated some cases still fall under the two year
limit; the eight year statute of repose will now apply to those
cases that had no previous limit. MR. BUSH disagreed, and said
the two year limit still applies but Alaska has a discovery rule,
so the two year time clock starts ticking when one becomes aware of
an injury. The time frame is two years that can be extended up to
eight. The Task Force changed the proposal to a ten year statute
of repose that would not apply to children, so it tolled during
minority. It also tolled for incapacitated people. The Task Force
vote on that provision was 10-7 in favor, but a total of 14 votes
was required to pass anything out of the Task Force, so it did not
go forward. Other than the "under the influence of alcohol or
drugs" provision discussed earlier, it was the only vote that ended
up with a majority vote but not the required two-thirds.
Number 238
CHAIRMAN TAYLOR asked about the Jackson v. Powers provision. MR.
BUSH said that was withdrawn from consideration by unanimous
consent, after debate. CHAIRMAN TAYLOR asked about the provision
allowing children to sue doctors until age eight. MR. BUSH replied
the first time he saw that provision was in HB 58, last fall. It
has been viewed as a statute of limitations change; it is not, it
is a statute of repose for children that is more restrictive than
the eight years. He advised if a child is injured by a doctor at
age five but the injury does not become apparent for several years,
the child loses his/her cause of action at age eight. If the same
thing happened to a 25 year old adult, that adult could bring a
cause of action until age 33.
CHAIRMAN TAYLOR asked about the Task Force's deliberation of the
non-economic damage cap of $300,000 as opposed to $500,000. MR.
BUSH answered that provision never came to the Task Force; the
committee that considered it recommended the change incorporated
into CSSB 15(JUD), which changes it to apply only to severe
disfigurement, and that provision passed.
CHAIRMAN TAYLOR inquired about collateral benefits. MR. BUSH said
that was debated during several of the meetings but did not come to
a vote because it was not a recommendation that made it out of
committee.
CHAIRMAN TAYLOR asked about allocation of damages. MR. BUSH
replied allocation of fault was rejected on an 8-9 vote (the
provisions as proposed in the initiative). CHAIRMAN TAYLOR
questioned the provision for damages resulting during the
commission of a felony, or while under the influence of alcohol or
drugs. MR. BUSH explained the felony provisions are contained in
the committee substitute, that provision was adopted by the Task
Force.
Number 269
SENATOR PEARCE asked whether a recommendation that did not come
from a subcommittee was allowed to go before the entire Task Force
for a vote. MR. BUSH explained the following rules were
established at the first meeting: a two-thirds vote (14) was
required to adopt anything by the Task Force; to get a proposal
recommended by a committee required three or four votes; and any
member could propose any provision to the full Task Force even if
the provision was rejected by a committee.
CHAIRMAN TAYLOR noted a Task Force committee voted unanimously to
not report changes to collateral benefits, as proposed by the
Alaska Chamber of Commerce. He asked about the provision
pertaining to changes to periodic payments. MR. BUSH said that was
not taken up by the full Task Force as that provision was
unanimously rejected in committee.
Number 300
(A COPY OF AMENDMENTS 4 - 10 ARE ATTACHED TO THIS DOCUMENT.)
CHAIRMAN TAYLOR discussed Amendment 4, and explained it inserts a
new bill section that would apply to bodily injury, sickness,
disease, or death of an insured, or damage or destruction of
property of an uninsured, even if the limits of liability bonds and
policies that apply have not been used up by payments or judgments
or settlements.
MR. LESSMEIER encourage the committee to not adopt Amendment 4 in
the context of tort reform because the issue of
uninsured/underinsured motorist coverage is complicated. Two
federal district court judges have ruled differently on this issue,
and the cases are on appeal to the Ninth Circuit Court of Appeals.
The question has been certified to the Alaska Supreme Court. State
Farm believes there is a problem that needs to be solved, but the
problem needs to be treated in separate legislation. One of the
policy calls the legislature will need to make is whether to return
to a pure difference in limits coverage, or a coverage which is
pure excess. If uninsured/underinsured motorist coverage remains
as excess coverage, whenever a person buys that coverage, he/she
will not know exactly what coverage he/she has because the amount
of coverage owned by the uninsured or underinsured motorist is
unknown. The excess coverage will become very costly because the
possible payout is unknown. State Farm advocates returning to a
pure difference of limits coverage and that language be adopted in
statute about the mandate offers, so that State Farm clearly
understands what the form of the offer is.
CHAIRMAN TAYLOR asked if Amendment 4 will resolve the stacking
question. He noted if two motorists are insured, the total of both
policies would be used to pay for total damages. MR. LESSMEIER
said he has not had time to study this proposal but repeated State
Farm would like clarification of what it is supposed to do, since
two federal judges have ruled differently on this issue. He
cautioned the committee to not act on this amendment in a hasty
manner because it may create more litigation.
CHAIRMAN TAYLOR said he thinks stacking policies to pay for damages
to be good public policy. MR. LESSMEIER said insurance companies
can sell more coverage under difference in limits. That coverage,
for a $100,000 policy, would be cheaper than pure excess coverage
of $50,000. In a difference in limits situation, an insured will
always know what their total amount of recovery is going to be.
The policyholder will not know the amount of recovery under a pure
excess policy. He explained if a person has $50,000 in pure excess
coverage, and the other motorist is uninsured, the maximum amount
the policyholder can collect is $50,000. CHAIRMAN TAYLOR countered
if the other motorist was insured for $100,000, and the
policyholder had damages of $200,000, the policyholder would
collect $150,000, if the policies were stacked. MR. LESSMEIER
responded that pure excess coverage is more expensive, which
creates the risk of depriving consumers of choice at a certain
level. State Farm believes it is better to give the consumer
choice at the low end of coverage.
CHAIRMAN TAYLOR said since this bill will receive an extensive
review by the Finance Committee, Mr. Lessmeier will have an
opportunity to take up the issue at that time. There being no
objection to the adoption of Amendment 4, it was so ordered.
Number 410
CHAIRMAN TAYLOR proposed Amendment 5 regarding civil action for
claim settlement practices. MR. FORD explained Amendment 5 allows
a person who claims a violation of the insurance trade practice law
to file a civil action and provides qualifications on how to file.
CHAIRMAN TAYLOR offered Amendment 5. There being no objection,
Amendment 5 was adopted.
CHAIRMAN TAYLOR proposed Amendment 6. MR. FORD explained it adds
a new provision to the motor vehicle statutes that requires motor
vehicle liability policies to pay penalties if the insurer denies
coverage for medical treatment, and the claim is later determined
to be covered. The penalties are listed in paragraphs 1 and 2, and
include actual costs plus interest from the date the claim is
received by the insurer, and attorneys' fees, or 50 percent of the
claim, whichever is greater.
CHAIRMAN TAYLOR said some carriers routinely deny small medical
claims and wait for the insured to sue. The State of Oregon has
enacted provisions to double the award, in such situations. There
being no objection to Amendment 6, it was adopted.
CHAIRMAN TAYLOR expressed concern about Amendment 7 because it may
reverse a policy set out in the Van Been case and asked committee
members to study the amendment further.
Regarding the rate rollback requirement in Amendment 8, CHAIRMAN
TAYLOR announced that amendment may be offered in the Finance
Committee, as well as Amendment 9.
CHAIRMAN TAYLOR noted Amendment 10 pertains to punitive damages for
unlawful practices and was previously adopted.
There being no further amendments, SENATOR MILLER moved CSSB
15(JUD) as amended and accompanying fiscal notes out of committee
with individual recommendations. There being no objection, the
motion carried. CHAIRMAN TAYLOR adjourned the meeting at 3:55 p.m.
¶0-LS0169\B.1
A M E N D M E N T 4
OFFERED IN THE SENATE¶
TO: Draft CSSB 15(JUD) ("B" Version, Dated 3/11/97)
Page 1, line 1, following " actions; ":
Insert " relating to uninsured and underinsured motor vehicle insuran
bonds; "
Page 14, following line 29:
Insert a new bill section to read:
" * Sec. 21. AS 28.22.201(a) is amended to read:
(a) The uninsured and underinsured motorists coverage required unde
chapter
(1) applies [DOES NOT APPLY] to bodily injury, sickness, disea
or death of an insured or damage to or destruction of property of an i
[UNTIL] the limits of liability bonds and policies that apply have n
by payments or judgments or settlements; however, the insurer shall,
instance, receive a credit against the insured's total damages for amo
received by the insured for covered claims from other sources, includi
bonds, other insurance policies, judgments, or settlements;
(2) must be a single combined coverage; and
(3) may be rejected by the insured in writing; if the insured has
rejected uninsured or underinsured coverage, the coverage may not be i
supplemental, renewal , or replacement policy unless the insured su
uninsured or underinsured coverage in writing."
Page 19, following line 26:
Insert a new bill section to read:
" * Sec. 32. AS 28.20.445(c), 28.20.445(h); AS 28.22.211; and AS
repealed."
Page 20, line 19:
Delete "20 - 22, 24 - 28, 30, and 31"
Insert "20, 22, 23, 25 - 29, 31, and 33"
Page 20, line 26:
Delete "23, and 29"
Insert "24, and 30"
Page 21, line 6:
Delete "sec. 32"
Insert "sec. 34"
Page 21, line 9:
Delete "sec. 34"
Insert "sec. 36"
Page 21, line 14:
Delete "sec. 21"
Insert "sec. 22"
Page 21, line 16:
Delete "sec. 22"
Insert "sec. 23"
Page 21, line 18:
Delete "sec. 31"
Insert "sec. 33"
Page 21, lines 20 - 21:
Delete "secs. 23 and 29"
Insert "secs. 24 and 30"
Page 21, line 23:
Delete "23, and 29"
Insert "24, and 30"
Page 21, line 24:
Delete "sec. 41"
Insert "sec. 43"
¶0-LS0169\B.2
A M E N D M E N T 5
OFFERED IN THE SENATE¶
TO: Draft CSSB 15(JUD) ("B" Version)
Page 13, following line 17:
Insert a new bill section to read:
" * Sec. 19. AS 21.36 is amended by adding a new section to read:
Sec. 21.36.128. Civil action for claim settlement practices. (a)
who alleges a violation of AS 21.36.125 or a violation of a trade prac
settlement regulation adopted by the director may bring a civil action
Notwithstanding any other provision of law, a person bringing an actio
section may not be required to prove that the violation occurred with
indicates a general business practice.
(b) Before filing a civil action under (a) of this section, the per
action shall give at least 60 days written notice to the person who co
violation. Notice required under this subsection must include
(1) a copy of the statute or regulation that the person is claimed
have violated;
(2) the facts and circumstances giving rise to the violation;
(3) the name of any individual involved in the violation;
(4) reference to any policy that is relevant to the violation; thi
paragraph does not apply if the person bringing the civil action is a
claimant unless the insurer has provided the person bringing the civil
copy of the policy; and
(5) a statement that the notice is given in compliance with this
subsection.
(c) If, within 60 days after notice required under (b) of this sect
by the insurer, the insurer pays the damages claimed by the person bri
or corrects the settlement practice giving rise to the action, a perso
action under (a) of this section.
(d) If an insurer receives a notice described under (b) of this sec
an alleged violation as provided under (c) of this section, the insure
copy of the notice to the director or notify the director of the settl
days after receiving the notice or settling the matter.
(e) Upon mailing or delivering the notice required under (b) of thi
the applicable time limit for commencing an action under (a) of this s
tolled for 65 days.
(f) If the person filing an action under (a) of this section is a p
the person may recover
(1) costs and reasonable attorney fees; and
(2) damages that are foreseeable as a result of the violation, inc
damages in excess of applicable insurance policy limits.
(g) Notwithstanding any other provision of law, a person filing an
under (a) of this section may recover punitive damages if the act or o
rise to the violation is
(1) wilful, wanton, or malicious; or
(2) in reckless disregard of the rights of the person filing the c
action.
(h) The rights provided under this section are in addition to other
provided by law."
Renumber the following bill sections accordingly.
Page 20, line 19:
Delete "20 - 22, 24 - 28, 30, and 31"
Insert "21 - 23, 25 - 29, 31, and 32"
Page 20, line 21:
Delete "and 19"
Insert "19, and 20"
Page 20, line 26:
Delete "23, and 29"
Insert "24, and 30"
Page 21, line 6:
Delete "sec. 32"
Insert "sec. 33"
Page 21, line 9:
Delete "sec. 34"
Insert "sec. 35"
Page 21, line 14:
Delete "sec. 21"
Insert "sec. 22"
Page 21, line 16:
Delete "sec. 22"
Insert "sec. 23"
Page 21, line 18:
Delete "sec. 31"
Insert "sec. 32"
Page 21, lines 20 - 21:
Delete "secs. 23 and 29"
Insert "secs. 24 and 30"
Page 21, line 23:
Delete "23, and 29"
Insert "24, and 30"
Page 21, line 24:
Delete "sec. 41"
Insert "sec. 42"
¶0-LS0169\B.3
A M E N D M E N T 6
OFFERED IN THE SENATE¶
TO: Draft CSSB 15(JUD) ("B" Version)
Page 1, line 1, following " actions ;":
Insert " relating to motor vehicle liability insurance; "
Page 14, following line 29:
Insert a new bill section to read:
" * Sec. 21. AS28.22 is amended by adding a new section to read:
Sec. 28.22.150. Required medical payment policy provision. (a)
insurance carrier denies coverage for a claim for medical treatment by
under a motor vehicle liability policy that contains medical coverage
later determined to be covered under the policy, the insurance carrier
insured's
(1) actual costs, plus interest from the date the claim is receive
insurer; and
(2) actual attorney fees or an amount equal to 50 percent of the
disputed claim, whichever is greater; actual attorney fees awarded und
may not exceed $250 per hour of work performed."
Renumber the following bill sections accordingly.
Page 20, following line 18:
Insert a new bill section to read:
" * Sec. 38. AS28.22.150(2), enacted by sec. 21 of this Act, amen
Rules of Civil Procedure, by providing for attorney fee awards in cert
from those awarded under Rule 82(b)."
Renumber the following bill sections accordingly.
Page 20, line 19:
Delete "20 - 22, 24 - 28, 30, and 31"
Insert "20, 22, 23, 25 - 29, 31, and 32"
Page 20, line 21:
Delete "and 19"
Insert "19, and 21"
Page 20, line 26:
Delete "23, and 29"
Insert "24, and 30"
Page 21, line 6:
Delete "sec. 32"
Insert "sec. 33"
Page 21, line 9:
Delete "sec. 34"
Insert "sec. 35"
Page 21, line 14:
Delete "sec. 21"
Insert "sec. 22"
Page 21, line 16:
Delete "sec. 22"
Insert "sec. 23"
Page 21, line 18:
Delete "sec. 31"
Insert "sec. 32"
Page 21, lines 20 - 21:
Delete "secs. 23 and 29"
Insert "secs. 24 and 30"
Page 21, line 23:
Delete "23, and 29"
Insert "24, and 30"
Page 21, line 24:
Delete "sec. 41"
Insert "sec. 43"
¶0-LS0169\B.4
A M E N D M E N T 7
OFFERED IN THE SENATE¶
TO: Draft CSSB 15(JUD) ("B" Version)
Page 1, line 1, following " actions; ":
Insert " relating to workers' compensation insurance; "
Page 14, following line 29:
Insert new bill sections to read:
" * Sec. 21. AS23.30.015(e) is amended to read:
(e) Except for actual costs and attorney fees, an employer shall
to the employee all amounts recovered under a third-party assignment i
violation of an applicable provision of law or contractual provision r
employee safety was a substantial factor in causing the employee's inj
which compensation was paid. In all other cases an [AN] amount reco
employer under an assignment, whether by action or compromise, shall b
as follows:
(1) the employer shall retain an amount equal to
(A) the expenses incurred by the employer in respect to the
action or compromise, including a reasonable attorney fee determined b
board;
(B) the cost of all benefits actually furnished by the employer
under this chapter;
(C) all amounts paid as compensation and second-injury fund
payments;
(D) the present value of all amounts payable later as
compensation (present value to be computed from a schedule prepared by
board), and the present value of the cost of all benefits to be furnis
under AS23.30.095 (as estimated by the board), the amounts so computed
estimated to be retained by the employer as a trust fund to pay compen
and the cost of benefits as they become due and to pay any finally rem
excess sum to the person entitled to compensation or to the representa
(2) the employer shall pay any excess to the person entitled to
compensation or to the representative of that person.
* Sec. 22. AS23.30.015(g) is amended to read:
(g) All amounts recovered by an employee or a representative of a
employee from a third party shall be retained by the employee if a vio
an applicable provision of law or contractual provision relating to em
safety was a substantial factor in causing the employee's injury for w
compensation was paid. In all other cases, if [IF] the employee or
representative recovers damages from the third person, the employee or
shall promptly pay to the employer the total amounts paid by the emplo
(C) [(e)(1)(A), (B), AND (C)] of this section, insofar as the recov
after deducting all litigation costs and expenses. Any excess recover
employee or representative shall be credited against any amount payabl
employer thereafter."
Renumber the following bill sections accordingly.
Page 20, line 19:
Delete "20 - 22, 24 - 28, 30, and 31"
Insert "20, 23, 24, 26 - 30, 32, and 33"
Page 20, line 21:
Delete "and 19"
Insert "19, 21, and 22"
Page 20, line 26:
Delete "23, and 29"
Insert "25, and 31"
Page 21, line 6:
Delete "sec. 32"
Insert "sec. 34"
Page 21, line 9:
Delete "sec. 34"
Insert "sec. 36"
Page 21, line 14:
Delete "sec. 21"
Insert "sec. 23"
Page 21, line 16:
Delete "sec. 22"
Insert "sec. 24"
Page 21, line 18:
Delete "sec. 31"
Insert "sec. 33"
Page 21, lines 20 - 21:
Delete "secs. 23 and 29"
Insert "secs. 25 and 31"
Page 21, line 23:
Delete "23, and 29"
Insert "25, and 31"
Page 21, line 24:
Delete "sec. 41"
Insert "sec. 43"
¶0-LS0169\B.5
A M E N D M E N T 8
OFFERED IN THE SENATE
¶
TO: Draft CSSB 15(JUD) ("B" Version)
Page 1, line 1, following " actions; ":
Insert " relating to insurance premium rates; "
Page 13, following line 17:
Insert a new bill section to read:
" * Sec. 19. AS21.39.040 is amended by adding new subsections to
(l) Notwithstanding the other provisions of this section, a rate fi
imposes a higher premium rate may not take effect until after the dire
a public hearing on the proposed rate increase. The director shall pr
the hearing required under this subsection by publication in at least
general circulation and by publication in the periodical published by
Association. Notice must be published at least 60 days prior to the s
must contain the date, place, and time of the hearing, and shall summa
filing request. The director may require the insurer filing the rate
costs of conducting the hearing.
(m) Upon request, the director shall allow a person to intervene in
review process. The director may order discovery as allowed under Ala
Civil Procedure. A hearing required under (l) of this section may not
discovery is complete.
(n) The director shall disapprove a rate filing that imposes a high
rate if the director determines that the rate filing is not in the pub
burden of proof that a rate filing is in the public interest rests wit
files the rate. If the rate filing results in the insurer earning a r
equals or exceeds the prejudgment interest rate under AS09.30.070(a),
shall be presumed not to be in the public interest.
(o) A person who intervenes in a rate proceeding under (m) of this
shall be considered a public interest litigant. If the intervenor is
opposing the rate increase, the intervenor shall receive actual reason
and costs incurred in the rate proceeding from the insurer. If the in
the rate increase and the director determines that the efforts of the
good faith, not frivolous, or substantially advanced the public intere
shall receive actual reasonable attorney fees and costs incurred in th
Renumber the following bill sections accordingly.
Page 20, following line 18:
Insert a new bill section to read:
" * Sec. 38. REQUIRED INSURANCE RATE REDUCTION. Except for wet m
insurance rates, all insurance rates filed with the division of insura
percent from those filed on January 1, 1997."
Renumber the following bill sections accordingly.
Page 20, line 19:
Delete "20 - 22, 24 - 28, 30, and 31"
Insert "21- 23, 25 - 29, 31, and 32"
Page 20, line 21:
Delete "19"
Insert "20"
Page 20, line 26:
Delete "23, and 29"
Insert "24, and 30"
Page 21, line 6:
Delete "sec. 32"
Insert "sec. 33"
Page 21, line 9:
Delete "sec. 34"
Insert "sec. 35"
Page 21, line 14:
Delete "sec. 21"
Insert "sec. 22"
Page 21, line 16:
Delete "sec. 22"
Insert "sec. 23"
Page 21, line 18:
Delete "sec. 31"
Insert "sec. 32"
Page 22, lines 20 - 21:
Delete "secs. 23 and 29"
Insert "secs. 24 and 30"
Page 21, line 23:
Delete "23, and 29"
Insert "24, and 30"
Page 21, line 24:
Delete "sec. 41"
Insert "sec. 43"
¶0-LS0169\B.6
A M E N D M E N T 9
OFFERED IN THE HOUSE¶
TO: CSSB 15(JUD) ("B" Version, Dated 3/11/97)
Page 1, line 1, following " actions; ":
Insert " relating to interest in a contract or loan; "
Page 14, following line 29:
Insert a new bill section to read:
" * Sec. 21. AS 45.45.010(b) is amended to read:
(b) Interest may not be charged by express agreement of the parties
contract or loan commitment that is more than five percentage points a
rate charged member banks for advances by the 12th Federal Reserve Dis
day on which the contract or loan commitment is made. A contract or l
commitment in which the principal amount exceeds $250,000 [$25,000
from the limitation of this subsection."
Renumber the following bill sections accordingly.
Page 20, line 19:
Delete "20 - 22, 24 - 28, 30, and 31"
Insert "20, 22, 23, 25 - 29, 31, and 32"
Page 20, line 26:
Delete "23, and 29"
Insert "24, and 30"
Page 21, line 6:
Delete "32"
Insert "33"
Page 21, line 9:
Delete "34"
Insert "35"
Page 21, line 14:
Delete "21"
Insert "22"
Page 21, line 16:
Delete "22"
Insert "23"
Page 21, line 18:
Delete "31"
Insert "32"
Page 21, lines 20 - 21:
Delete "secs. 23 and 29"
Insert "secs. 24 and 30"
Page 21, line 23:
Delete "23, and 29"
Insert "24, and 30"
Page 21, line 24:
Delete "41"
Insert "42"
¶0-LS0169\B.7
A M E N D M E N T
OFFERED IN THE SENATE¶
TO: CSSB 15(JUD) ("B" Version, Dated 3/11/97)
Page 12, following line 27:
Insert a new bill section to read:
" * Sec. 18. AS18.80 is amended by adding a new section to read:
Sec. 18.80.225. Punitive damages for unlawful employment practices
In an action against an employer to recover damages for an unlawful em
practice prohibited by AS18.80.220, the amount of punitive damages awa
court or jury may not exceed
(1) $50,000 if the employer has less than 101 employees;
(2) $100,000 if the employer has more than 100 but less than 201
employees;
(3) $200,000 if the employer has more than 200 but less than 501
employees;
(4) $300,000 if the employer has more than 500 employees.
(b) This section may not be construed to allow an award of punitive
against the state.
(c) In this section, "employees" means persons employed in each of
more calendar weeks in the current or preceding calendar year."
Renumber the following bill sections accordingly.
Page 20, line 19:
Delete "20 - 22, 24 - 28, 30, and 31"
Insert "21 - 23, 25 - 29, 31, and 32"
Page 20, line 21:
Delete "and 19"
Insert "18, and 20"
Page 20, line 26:
Delete "23, and 29"
Insert "24, and 30"
Page 20, line 28:
Delete "18"
Insert "19"
Page 21, line 6:
Delete "32"
Insert "33"
Page 21, line 9:
Delete "34"
Insert "35"
Page 21, line 14:
Delete "21"
Insert "22"
Page 21, line 16:
Delete "22"
Insert "23"
Page 21, line 18:
Delete "31"
Insert "32"
Page 21, lines 20 - 21:
Delete "secs. 23 and 29"
Insert "secs. 24 and 30"
Page 21, line 23:
Delete "23, and 29"
Insert "24, and 30"
Page 21, line 24:
Delete "41"
Insert "42"
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