Legislature(1995 - 1996)
03/12/1996 01:35 PM Senate L&C
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
SENATE LABOR AND COMMERCE COMMITTEE
March 12, 1996
1:35 p.m.
MEMBERS PRESENT
Senator Tim Kelly, Chair
Senator John Torgerson, Vice Chair
Senator Judy Salo
Senator Jim Duncan
MEMBERS ABSENT
Senator Mike Miller
COMMITTEE CALENDAR
CONFIRMATION HEARINGS:
Alaska State Board of Public Accountancy
Dean W. Nelson and Joanne Stoots
Alcoholic Beverage Control Board
Evelyn Beeter, Bert L. Cottle, Ellen Ganley, Robert J. Klein,
Joseph J. Thomas, Jr.
State Board of Registration for Architects, Engineers, and Land
Surveyors
Byron Haynes, Jr. and Ernie Siemoneit
Board of Clinical Social Work Examiners
Beverly Haywood
Board of Dispensing Opticians
Mary C. Seutter
Alaska Labor Relations Agency
Raymond P. Smith
Board of Marital and Family Therapy
Mercy Dennis, Dixie Hood, Sandra Samaniego
Board of Certified Direct-Entry Midwives
Marilyn Holmes
Board of Nursing
Josephine Malemute
Occupational Safety and Health Review Board
Timothy Sharp
Board of Pharmacy
Chris Coursey
State Physical Therapy and Occupational Therapy Board
Leslie F. Schwartz
Board of Psychologist and Psychological Associate Examiners
Gail Shortell
Real Estate Commission
Ruth Blackwell, Linda Freed, Eleanor Oakley, Clair Ramsey,
Larry Spencer
Alaska Public Utilities Commission
Sam Cotten and G. Nanette Thompson
Alaska Workers' Compensation Board
Harriet Lawlor, Nancy Ridgley, James Williams, Dorothy
Bradshaw, Philip Ulmer
SENATE BILL NO. 186
"An Act relating to partnerships; amending Alaska Rules of Civil
Procedure 20 and 24; and providing for an effective date."
SENATE CS FOR CS FOR HOUSE BILL NO. 158(JUD)
"An Act relating to civil actions; amending Rules 68, 82(b), and
95, Alaska Rules of Civil Procedure, repealing Rule 72.1, Alaska
Rules of Civil Procedure, and amending Rule 601, Alaska Rules of
Evidence; and providing for an effective date."
PREVIOUS SENATE COMMITTEE ACTION
SB 186 - See Labor and Commerce minutes dated 2/8/96, 2/29/96,
and 3/7/96.
HB 158 - See Judiciary minutes dated 5/3/95, 8/21/95, 8/23/95,
8/24/95, 8/25/95, 2/9/96, 2/19/96 and 2/28/96.
WITNESS REGISTER
Sherman Ernouf
Senate Labor & Commerce Committee Aide
Alaska State Capitol
Juneau, Alaska 99801-1182
POSITION STATEMENT: Commented on SB 186.
Peter Denn
Alaska Society of CPAs
%Belloit and Touche
550 W. 7th, Ste. 1500
Anchorage, AK 99501
POSITION STATEMENT: Commented on SB 186.
Daniella Loper
Legislative Aide to Representative Porter
Alaska State Capitol
Juneau, Alaska 99801-1182
POSITION STATEMENT: Commented on HB 158.
Chuck Achberger
Senate Judiciary Committee Aide
Alaska State Capitol
Juneau, Alaska 99801-1182
POSITION STATEMENT: Commented on HB 158.
ACTION NARRATIVE
TAPE 96-18, SIDE A
Number 000
CHAIRMAN TIM KELLY called the Senate Labor and Commerce Committee
to order at 1:35 p.m. and announced the committee would take up the
confirmations as the first order of business.
SHERMAN ERNOUF read the list of confirmation nominees to committee
members. SENATOR KELLY asked if the committee has received any
questions about the nominees. MR. ERNOUF replied it had not.
SENATOR KELLY noted the names had been posted for the past week.
There being no questions from committee members, SENATOR TORGERSON
moved to adopt a letter from the committee in support of the
nominees for confirmation. There being no objection, the motion
carried.
SB 186 LIMITED LIABILITY PARTNERSHIPS
SENATOR KELLY announced SB 186 to be up for consideration and
informed the committee a committee substitute had been prepared.
MR. ERNOUF explained the proposed committee substitute contains the
suggested amendments from the Division of Banking. The amendments
are administrative to keep filing procedures consistent with the
procedures for corporations, limited liability partnerships, and
limited liability companies. One additional technical change
needed to be made, but otherwise, all interested parties agreed
with the changes made.
PETER DENN stated on page 8, lines 13 and 14, of the work draft,
the phrase, "unless the context indicates otherwise" was not
removed from the bill, as was the intent expressed at the committee
meeting with members of the banking industry and CPAs.
SENATOR SALO asked if it should read, "partnership includes a
registered limited liability partnership;." MR. DENN replied it
should.
SENATOR TORGERSON moved the committee adopt CSSB 186(L&C). There
being no objection, the motion carried.
SENATOR KELLY asked if there was any opposition to CSSB 186(L&C).
MR. ERNOUF believed former problems were corrected in the committee
substitute.
SENATOR KELLY clarified that the removal of line 14 was
incorporated into the committee substitute as an amendment.
SENATOR TORGERSON moved CSSB 186(L&C) as amended out of committee
with individual recommendations. There being no objection, the
motion carried.
SB 253 INSURANCE FOR PROSTATE CANCER TESTING
SENATOR SALO moved SB 253 out of committee with individual
recommendations. There being no objection, the motion carried.
HB 158 CIVIL LIABILITY
DANIELLA LOPER, staff to Representative Porter, prime sponsor of HB
158, gave a sectional analysis of the House version. Section 2
creates a time limit for any civil action to 8 years, under the
statute of repose. Section 3 clarifies existing law, which sets
statutory liabilities to two years for particular actions. Section
4 deals with limitations on actions involving injury to personal
property, and is based on an accrual method. Section 5 limits non-
economic damages to $300,000 and for other specified injuries,
$500,000. Claims for wrongful death are also included in Section
5. Section 6 addresses punitive damages and was taken from the
latest Alaska Supreme Court case and defines that decision in
statute. Section 7 contains a formula for the award of punitive
damages, which is three times the amount of non-economic plus
economic damages. There is no ceiling on the amount that can be
awarded for economic damages. Section 8 exempts the state, self-
insured municipalities, and authorized insurers from posting
security for periodic payments.
Number 199
MS. LOPER continued saying that section 9 deals with inflation
adjustments for periodic payments and provides for a floating
interest rate. Section 10 requires the jury be informed of
compensation the plaintiff has received, for example medical
benefits. This requirement does not apply to federally funded
programs which must seek repayment or death benefits under a life
insurance policy or workers' compensation. The apportionment of
fault provision in Section 10 was taken from a Supreme Court Case
called the Brenner Case, and apportions fault to every person
responsible for the party's injuries rather than just those named
in the lawsuit. Section 10 was included to prevent the deep pocket
syndrome for entities that carry large policies. Section 11 is
based on the premise that offers of judgment inhibit the filing of
cases and clog up the court system. This section expands the offer
of judgment provision so that if an offer made is within five
percent of the judgment rendered by the jury, then the person who
denied the offer will have to pay the other party's costs and
attorney's fees. Section 12 sets prejudgment interest at three
percent above the 12th Federal Reserve District discount rate in
effect on January 2. Interest may not be awarded on future
economic, non-economic, or punitive damages. The section (19) on
civil liability of hospitals for non-employees requires those
employees to post notice of whether they carry insurance.
Number 249
MS. LOPER continued saying section 20 prohibits a felon from
recovering damages from civil litigation if those damages resulted
from the commission of the felony. Section 21 pertains to signing
of pleadings, motions, and sanctions, and was not deleted from the
Senate Judiciary Committee version. It provides for sanctions
against the plaintiff's attorney or the person who signed the
pleadings or motions if in summary judgment the case is found to be
frivolous. Section 16 of the House version provides for
arbitration but does not mandate it. Section 17 applies to medical
expert witness qualifications to ensure that any person testifying
against a health care provider be licensed. The House version does
not contain a mandatory rate rollback, and the act takes effect
upon passage. Representative Porter does not support a mandatory
rate rollback because of the numerous court cases in California
resulting from tort reform legislation. The House version
definitions of professional negligence, services, and malpractice
actions are directly related to health care providers.
Number 292
CHUCK ACHBERGER, Senator Judiciary Committee aide, explained the
Senate Judiciary Committee version of HB 158. The statute of
repose was increased to 15 years to bring it in line with existing
rules in the court system. The statute of repose covers not only
physicians, but contractors, architects, and engineers. Because
bank loans are usually for 20 to 30 years on a building, the eight
year statute of repose was not long enough to provide for bank
confidence when making loans. Certain statutory liabilities remain
the same, as well as limitations on actions. Section 5,
noneconomic damages, was deleted from the Senate Judiciary version
because it was difficult to adjust for environmental damages in the
bill. Fishing groups involved in the Exxon Valdez cleanup
questioned whether that section would limit environmental damages
to $300,000. Because there was no way to resolve that problem, the
section was deleted.
MR. ACHBERGER noted an additional change to the statute of repose
on page 3, lines 27 and 28, was the removal of the words
"undiscovered presence" and "that has no therapeutic or diagnostic
purpose or effect...."
MR. ACHBERGER said the award for punitive damages sections in both
versions of the bill is the same, as well as the definition of
punitive damages. Regarding the section that exempted the state,
municipalities , and insurance companies from posting security, that
provision was deleted because the plaintiff would have no
protection if one of those entities filed for bankruptcy.
Additional language in that section did not require payments to be
made when due was also deleted. Inflation adjustments were not
changed in the Senate Judiciary version. The collateral benefits
section was deleted from the Senate Judiciary version because
medical bills and other expenses paid by the injured party or
his/her family during recovery would be subtracted from the amount
of the settlement.
Number 365
MR. ACHBERGER discussed the apportionment of fault provision. In
the Senate version, fault can only be apportioned to those people
within the court's jurisdiction. The offer of judgment provision
requires all defendants to join in an offer, otherwise no offer can
be made. Prejudgment interest is pegged to five year treasury
notes to be more representative of conditions in the marketplace at
the time of the incident. In Section 15, doctors who are not
employed by a hospital must carry $2,500,000 per incident in
liability coverage, otherwise the hospital is responsible for
liability coverage. The amount, per incident was originally set at
$5,000,000, but after taking testimony, was reduced to $2,500,000.
The section covering damages resulting during the commission of a
crime is the same as the House version. Section 17, on pleadings,
motions and sanctions, is also the same as the House version.
MR. ACHBERGER explained that the section requiring mandatory
arbitration, in the Senate version, for cases under $100,000 should
accommodate 90 percent of all tort cases, according to research
statistics and should lower costs and expedite efforts. The expert
witness qualification provision was broadened to apply to all
professionals, not just medical professionals. This would require
an expert testifying against a professional in any field. The
mandatory rate rollback provision is Senator Adams' amendment. The
amount of ten percent has been debated; the intent is to ensure
that insurance companies reduce rates. The definition of
professional negligence was changed to pertain to all professional
services, not just medical services.
Number 380
SENATOR KELLY asked if the House version offer of judgment
provision is designed to prevent a party from holding out on a
settlement to get a larger amount.
MS. LOPER replied that too often the defendant will try to settle
with the plaintiff, and will make an offer, but the offer will be
declined while the plaintiff holds out for more. Also, a wealthy
defendant might refuse to make an offer and continue to pursue
litigation to exhaust the other party. This section would require
the plaintiff to pay for the defendant's attorney's fees if the
jury award is within five percent of the offer.
MR. ACHBERGER noted the Senate version removed the multiple offers
of judgment so that the group would have to agree among themselves
as to the settlement before making the offer.
SENATOR KELLY asked if the word "judgment" implies that the judge
or jury has made a finding of x number of dollars, but the
plaintiff will not accept that amount of money and chooses to
continue the case.
MS. LOPER stated that is correct.
MR. ACHBERGER believed it is in a pretrial situation, where one
party wants to settle beforehand to avoid a trial.
SENATOR KELLY clarified that is when the judgment is determined,
and if the judgment is within five percent of the offer, one party
pays the other's attorney fees.
SENATOR SALO asked how "frivolous" would be determined under the
signings and pleadings section.
MS. LOPER responded the definition of "frivolous" and
"unwarranted" is in the court rules.
SENATOR KELLY announced the bill will be brought up again on
Thursday, in order to move it out, and that the bill has further
referrals to the Senate Finance and Senate Rules Committees. He
adjourned the meeting at 2:07 p.m.
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