SCS CSHB 158(FIN): "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."
00SENATE CS FOR CS FOR HOUSE BILL NO. 158(FIN) 01 "An Act relating to civil actions; amending Rules 68, 82(b), and 95, Alaska 02 Rules of Civil Procedure, repealing Rule 72.1, Alaska Rules of Civil Procedure, 03 and amending Rule 601, Alaska Rules of Evidence." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05 * Section 1. PURPOSE. It is the purpose of this Act to 06 (1) enact further reforms that create a more equitable distribution of the cost 07 and risk of injury; 08 (2) reduce costs associated with the civil justice system, while ensuring that 09 adequate and appropriate compensation for persons injured through the fault of others is 10 available; 11 (3) help match losses with compensation by helping to 12 (A) ensure that money paid to an injured person is available when 13 anticipated expenses or losses occur; 14 (B) ensure that a claimant with substantial injury requiring long-term
01 treatment will have money available for future medical care; 02 (C) reduce reparation system costs by eliminating those portions of 03 awards that are not needed to compensate the claimant; 04 (D) eliminate duplicate recoveries; 05 (E) reduce the costs of litigation; 06 (F) establish appropriate thresholds for a damage award in order to 07 allow predictability of liability exposure; and 08 (G) reduce the ultimate costs to the state and to local governments of 09 providing medical services to those who cannot otherwise afford those services; 10 (4) reduce the amount of litigation proceeding to trial by modifying the 11 allocation of attorney fees and court costs based on the offer of judgment and the final court 12 award thereby providing a financial incentive to both parties to settle the dispute; 13 (5) enact a statute of repose that meets the tests set out in Turner Construction 14 Co., Inc. v. Scales, 752 P.2d 467 (Alaska 1988); 15 (6) clarify the circumstances in which hospitals are held directly liable for the 16 actions of health care providers not employed by the hospital; 17 (7) encourage health care providers to provide quality medical care in all areas 18 of this state at a cost that is affordable; 19 (8) stabilize the rapidly escalating costs of health care by curtailing the rapid 20 escalation in malpractice premiums and thereby make broader based health care available to 21 more residents of the state; 22 (9) require that 90 percent of punitive damages awarded by a court be 23 deposited into the general fund for the benefit of the public welfare and to deter future harm 24 to the public. 25 * Sec. 2. AS 09.10.055 is repealed and reenacted to read: 26 Sec. 09.10.055. STATUTE OF REPOSE OF 15 YEARS. (a) Notwithstanding 27 the disability of minority described under AS 09.10.140(a), a person may not bring an 28 action for personal injury, death, or property damage based on a defect in the design, 29 planning, supervision, construction, or observation of an improvement to real property 30 unless commenced within 15 years of the earlier of the date of 31 (1) substantial completion of the construction alleged to have caused
01 the personal injury, death, or property damage; however, the limitation of this 02 paragraph does not apply to a claim resulting from an intentional or reckless disregard 03 of specific project design plans and specifications, construction standards prevailing 04 at the time of construction, or building codes; or 05 (2) the last act alleged to have caused the personal injury, death, or 06 property damage. 07 (b) This section does not apply if 08 (1) the personal injury, death, or property damage resulted from 09 (A) exposure to a hazardous substance; in this subparagraph, 10 "hazardous substance" means an element or compound that, when it enters into 11 the air or on the surface or subsurface land or water of the state, presents an 12 imminent and substantial danger to public or individual health and welfare; 13 (B) an intentional act or gross negligence; 14 (C) fraud or fraudulent misrepresentation; 15 (D) breach of an express warranty or guarantee; or 16 (E) a defective product; in this subparagraph, "product" means 17 an object that has intrinsic value, is capable of delivery as an assembled whole 18 or as a component part, and is introduced into trade or commerce; "product" 19 includes an element or compound that if ingested by humans or if humans are 20 exposed to, or are in contact with the element compound or product, poses a 21 threat to human health; 22 (2) facts that would give notice of a potential cause of action are 23 intentionally concealed; 24 (3) a shorter period of time for bringing the action is imposed under 25 another provision of law; or 26 (4) a longer period of time for bringing the action was provided under 27 a contract. 28 (c) In this section, "substantial completion" means the date when construction 29 is sufficiently completed to allow the owner or a person authorized by the owner to 30 occupy the improvement or to use the improvement in the manner for which it was 31 intended.
01 * Sec. 3. AS 09.10.070 is amended to read: 02 Sec. 09.10.070. ACTIONS FOR CERTAIN TORTS AND CERTAIN 03 STATUTORY LIABILITIES TO BE BROUGHT IN TWO YEARS. Except as 04 otherwise provided by law, a [A] person may not bring an action (1) for libel, 05 slander, assault, battery, seduction, or false imprisonment [, OR FOR ANY INJURY 06 TO THE PERSON OR RIGHTS OF ANOTHER NOT ARISING ON CONTRACT 07 AND NOT SPECIFICALLY PROVIDED OTHERWISE]; (2) upon a statute for a 08 forfeiture or penalty to the state; or (3) upon a liability created by statute, other than 09 a penalty or forfeiture; unless the action is commenced within two years. 10 * Sec. 4. AS 09.10 is amended by adding a new section to read: 11 Sec. 09.10.075. LIMITATION ON ACTIONS INVOLVING INJURY TO 12 PERSON OR PROPERTY. (a) A person may not bring an action for personal injury, 13 death, property damage, or injury to the rights of another not arising on contract, 14 unless the action is brought within two years of the accrual of the action. 15 (b) This section does not apply if a shorter period of time for bringing the 16 action is imposed under another provision of law. 17 * Sec. 5. AS 09.17.020 is amended to read: 18 Sec. 09.17.020. PUNITIVE DAMAGES. Punitive damages may not be 19 awarded in an action, whether in tort, contract, or otherwise, unless supported by clear 20 and convincing evidence of outrageous conduct, including acts done with malice or 21 bad motives, or reckless indifference to the interest of another person. 22 * Sec. 6. AS 09.17.020 is amended by adding new subsections to read: 23 (b) The amount of punitive damages awarded by a court or jury under (a) of 24 this section may not exceed three times the amount of compensatory damages awarded 25 or $300,000, whichever amount is greater. 26 (c) The limit under (b) of this section does not apply to punitive damages 27 awarded by a court or jury against a person who, as proven by a preponderance of the 28 evidence, was attempting to commit or committing a felony if the person bringing the 29 action was a victim of that offense and the offense substantially contributed to the 30 injury or death. In this subsection, "victim" has the meaning given in AS 12.55.185. 31 (d) If a person receives an award of punitive damages, the court shall require
01 that 90 percent of the award be deposited into the general fund of the state. This 02 subsection does not grant the state the right to file or join a civil action to recover 03 punitive damages. 04 * Sec. 7. AS 09.17.040(e) is amended to read: 05 (e) If a judgment is paid by periodic payments, the [THE] court shall 06 [MAY] require security be posted [,] in order to ensure that funds are available as 07 periodic payments become due. The court may waive this requirement if the person 08 in whose favor judgment is entered agrees to waive the posting of security and the 09 court determines that waiver is prudent in the action [NOT REQUIRE SECURITY 10 TO BE POSTED IF AN AUTHORIZED INSURER, AS DEFINED IN AS 21.90.900, 11 ACKNOWLEDGES TO THE COURT ITS OBLIGATION TO DISCHARGE THE 12 JUDGMENT]. 13 * Sec. 8. AS 09.17.040(f) is amended to read: 14 (f) A judgment ordering payment of future damages for personal injury or 15 death by periodic payment shall specify the recipient, the dollar amount of the 16 payments, including any increases in future payments for anticipated inflation or 17 the formula for the increases, the interval between payments, and the number of 18 payments or the period of time over which payments shall be made. Payments may 19 be modified only in the event of the death of the judgment creditor, in which case 20 payments may not be reduced or terminated, but shall be paid to persons to whom the 21 judgment creditor owed a duty of support, as provided by law, immediately before 22 death. In the event the judgment creditor owed no duty of support to dependents at 23 the time of the judgment creditor's death, the money remaining shall be distributed in 24 accordance with a will of the deceased judgment creditor accepted into probate or 25 under the intestate laws of the state if the deceased had no will. 26 * Sec. 9. AS 09.17.080 is amended by adding a new subsection to read: 27 (e) Notwithstanding any other provision of this section, fault may not be 28 allocated to a person against whom an action cannot be brought as a result of 29 application of a statute of repose, including AS 09.10.055. 30 * Sec. 10. AS 09.30.065 is repealed and reenacted to read: 31 Sec. 09.30.065. OFFERS OF JUDGMENT. (a) At any time more than 10 days
01 before the trial begins either the party making a claim or the party defending against a 02 claim may serve upon the adverse party an offer to allow judgment to be entered in 03 complete satisfaction of the claim for the money or property or to the effect specified in 04 the offer, with costs then accrued. If within 10 days after the service of the offer the 05 adverse party serves written notice that the offer is accepted, either party may then file 06 the offer and notice of acceptance together with proof of service, and the clerk shall enter 07 judgment. An offer not accepted within 10 days is considered withdrawn and evidence 08 of that offer is not admissible except in a proceeding to determine the form of judgment 09 after verdict. 10 (b) If the judgment finally entered on the claim as to which an offer has been 11 made under this section is at least five percent less favorable to the offeree than the 12 offer, the offeree shall pay costs as allowed under the Alaska Rules of Civil Procedure 13 and all reasonable attorney fees incurred by the offeror from the date the offer was made. 14 In comparing the offer to judgment finally entered, the court may not consider 15 prejudgment interest payable under the judgment during the period between when 16 payment would have been made under the offer and the date of entry of judgment. 17 * Sec. 11. AS 09.30.070(a) is amended to read: 18 (a) Notwithstanding AS 45.45.010, the [THE] rate of interest on judgments and 19 decrees for the payment of money, including prejudgment interest, is three percent 20 above the interest rate set by the United States Bureau of the Public Debt for five- 21 year treasury notes in effect on the day on which the judgment or decree is entered [10.5 22 PERCENT A YEAR], except that a judgment or decree founded on a contract in writing, 23 providing for the payment of interest until paid at a specified rate not exceeding the legal rate 24 of interest for that type of contract, bears interest at the rate specified in the contract if the 25 interest rate is set out in the judgment or decree. 26 * Sec. 12. AS 09.55.535 is repealed and reenacted to read: 27 Sec. 09.55.535. MANDATORY ARBITRATION. (a) A person who files an 28 action for personal injury, death, or property damage shall also submit the claim to the 29 court for arbitration unless the action is excluded under (b) of this section. 30 (b) A person is not required to comply with (a) of this section if the 31 (1) amount in controversy, excluding interest, costs, and attorney fees,
01 exceeds $100,000 or is eligible for small claims court; this paragraph does not apply if, 02 for purposes of arbitration only, the person bringing the claim waives the amount in 03 controversy that exceeds $100,000; 04 (2) parties have, under a written agreement made before or after the 05 accrual of the action, agreed to submit the claim to arbitration; or 06 (3) action 07 (A) is a class action; 08 (B) seeks equitable or declaratory relief; 09 (C) concerns the title to real property; 10 (D) is a probate action; 11 (E) is an appeal from a court of limited jurisdiction; 12 (F) involves divorce or domestic relations; 13 (G) is an appeal from action by an administrative agency. 14 (c) The court shall maintain a list of attorneys with at least five years of civil 15 practice experience or who meet other qualifications as prescribed by the court, or retired 16 judges, who have consented to serve as arbitrators. From the list of attorneys or retired 17 judges the court shall appoint an arbitrator to review the claim and conduct the hearing. 18 Each party may exercise a peremptory challenge of an arbitrator appointed by the court. 19 (d) A party to arbitration shall comply with the Alaska Rules of Civil Procedure 20 regarding mandatory discovery and may also take the deposition of an opposing party 21 or conduct a mental or physical examination as allowed under the Alaska Rules of Civil 22 Procedure. A party may not conduct further discovery except as allowed by the 23 arbitrator or as allowed by agreement between the parties. Discovery shall be completed 24 within 30 days after the arbitrator is selected, except as otherwise allowed by the 25 arbitrator. 26 (e) The arbitrator shall set a date for a hearing on the claim. The hearing date 27 shall be as soon as feasible, but not more than 60 days after the selection of the 28 arbitrator, except as allowed by the arbitrator. 29 (f) The arbitrator shall conduct the hearing as necessary to ascertain facts in a 30 timely manner. A witness may testify telephonically if allowed by the arbitrator. The 31 Alaska Rules of Evidence do not apply to an arbitration hearing, except as determined
01 by the arbitrator or by the Alaska Supreme Court. The Alaska Supreme Court shall 02 establish a list of documents that shall be presumptively admissible in an arbitration 03 hearing without prior establishment of authenticity or foundation, including bills, reports, 04 medical records, or photographs. This paragraph may not be construed to require the 05 arbitrator to use or rely on any documents that the arbitrator has reason to doubt as to 06 the document's authenticity or accuracy. 07 (g) An arbitrator shall render a decision within 30 days after hearing a claim 08 under (e) of this section. The decision must contain findings of fact, conclusions of law, 09 and an award or denial of damages. The decision of the arbitrator may be rejected by 10 a party. 11 (h) Not more than seven days after the decision of the arbitrator is issued, a 12 party may reject the decision of the arbitrator and file a request with the appropriate 13 court for a trial on all issues raised by the claim. A timely filed request for trial shall 14 proceed in the appropriate court. 15 (i) In a trial of a claim that has been arbitrated under this section, the decision 16 of the arbitrator is admissible to the extent allowed under applicable rules of court, but 17 the arbitrator may not be called as a witness. If a party rejects the decision of the 18 arbitrator and litigates the claim in court, but fails to improve that party's position, the 19 court shall award costs as allowed by law or under the Alaska Rules of Civil Procedure 20 and reasonable attorney fees to the opposing party. 21 (j) The Alaska Supreme Court shall adopt rules necessary to implement this 22 section. 23 (k) Notwithstanding AS 09.30.065, a claim subject to arbitration under this 24 section is not subject to the offer of judgment provisions of AS 09.30.065(b). 25 * Sec. 13. AS 09.55 is amended by adding a new section to read: 26 Sec. 09.55.551. EXPERT WITNESS QUALIFICATION. In an action based 27 upon professional negligence, a person may not testify as an expert witness on the issue 28 of the appropriate standard of care unless the witness is a professional who is licensed 29 in this state or is licensed in another state or country and 30 (1) is trained and experienced in the same discipline or school of practice 31 as the defendant or in an area directly related to a matter at issue; and
01 (2) is certified by a board recognized by the state as having 02 acknowledged expertise and training directly related to the particular field or matter at 03 issue. 04 * Sec. 14. AS 09.55.560 is amended by adding a new paragraph to read: 05 (4) "professional negligence" means a negligent act or omission in 06 rendering professional services. 07 * Sec. 15. AS 09.65 is amended by adding a new section to read: 08 Sec. 09.65.096. CIVIL LIABILITY OF HOSPITALS FOR NONEMPLOYEES. 09 (a) A hospital is not liable for civil damages as a result of an act or omission by a 10 health care provider who is not an employee or actual agent of the hospital if the hospital 11 provides notice that the health care provider is an independent contractor and the health 12 care provider is insured as described under (c) of this section. The notice required by 13 this subsection must be posted conspicuously in all admitting areas of the hospital, 14 published at least annually in a newspaper of general circulation in the area, and must 15 be in substantially the following form: 16 Notice of Limited Liability 17 The following health care providers are independent contractors 18 and are not employees of the hospital: 19 (List specific health care providers) 20 The hospital is responsible for exercising reasonable care in granting privileges to 21 practice in the hospital, for reviewing those privileges on a regular basis, and for taking 22 appropriate steps to revoke or restrict privileges in appropriate circumstances. The 23 hospital is not otherwise liable for the acts or omissions of a health care provider who 24 is an independent contractor. 25 (b) This section does not preclude liability for civil damages that are the 26 proximate result of the hospital's own negligence or intentional misconduct. 27 (c) A hospital is not immune from liability under (a) of this section for an act 28 or omission of a health care provider who is an independent contractor unless the 29 health care provider has liability insurance coverage in the amount of at least 30 $2,500,000 per incident and the coverage is in effect and applicable to those health 31 care services offered by the health care provider that the hospital is required to provide
01 by law or by accreditation requirements. 02 (d) In this section, 03 (1) "health care provider" means a doctor of medicine, psychologist, 04 osteopath, dentist, optometrist, chiropractor, optician, pharmacist, podiatrist, or certified 05 registered nurse anesthetist, who is licensed in this state; 06 (2) "hospital" has the meaning given in AS 18.20.130 and includes a 07 governmentally owned or operated hospital; 08 (3) "independent contractor" means a licensed health care provider who 09 has been granted specified privileges to render health care services directly or 10 indirectly to patients at the hospital, but who is not an employee or actual agent of the 11 hospital in connection with the rendition of the health care services. 12 * Sec. 16. AS 09.65.210 is repealed and reenacted to read: 13 Sec. 09.65.210. DAMAGES RESULTING FROM COMMISSION OF A 14 FELONY. (a) A person who suffers personal injury or property damage may not 15 recover damages for the personal injury or property damage if the injury occurred 16 while the person was committing or attempting to commit a felony, or fleeing from the 17 commission of a felony, and the person has been convicted of the felony, including 18 conviction based on a guilty plea or plea of nolo contendere, and the felony 19 substantially contributed to the injury or property damage. 20 (b) The personal representative of a deceased person may not recover damages 21 for the person's death if the court determines by clear and convincing evidence that 22 the death occurred while the person was committing or attempting to commit a felony, 23 or fleeing from the commission of a felony, and that the felony substantially 24 contributed to the death. 25 * Sec. 17. AS 09.68 is amended by adding a new section to read: 26 Sec. 09.68.125. SIGNING OF PLEADINGS, MOTIONS, AND OTHER 27 PAPERS; SANCTIONS. Every pleading, motion, and other paper of a party 28 represented by an attorney shall be signed by at least one attorney of record in the 29 attorney's individual name, whose address shall be stated. A party who is not 30 represented by an attorney shall sign the party's pleading, motion, or other paper and 31 state the party's address. Except when otherwise specifically provided by the Alaska
01 Rules of Civil Procedure or statute, pleadings need not be verified or accompanied by 02 affidavit. The signature of an attorney or party constitutes a certificate by the signer 03 that the signer has read the pleading, motion, or other paper; that to the best of the 04 signer's knowledge, information, and belief formed after reasonable inquiry it is well 05 grounded in fact and is warranted by existing law or a good faith argument of the 06 extension, modification, or reversal of existing law; and that it is not interposed for any 07 improper purpose, including to harass or to cause unnecessary delay or needless 08 increase in the cost of litigation. If a pleading, motion, or other paper is not signed, 09 it shall be stricken unless it is signed promptly after the omission is called to the 10 attention of the pleader or movant. If it is alleged or appears that a pleading, motion, 11 or other paper is signed in violation of this section, the court, upon motion or upon its 12 own initiative, may set the matter for hearing. If the court determines that a pleading, 13 motion, or other paper is signed in violation of this section, the court shall impose 14 upon the person who signed it, a represented party, or both, an appropriate sanction 15 that may include an order to pay to the other party the amount of the reasonable 16 expenses incurred because of the filing of the pleading, motion, or other paper, 17 including costs and attorney fees, and monetary sanctions not to exceed $10,000. 18 * Sec. 18. AS 08.64.326(a)(12); AS 08.68.270(10); AS 09.55.536, 09.55.560(2), and 19 09.55.560(3) are repealed. 20 * Sec. 19. Rule 68, Alaska Rules of Civil Procedure, is amended by adding a new 21 subsection to read: 22 (d) The provisions of this rule do not apply to a claim subject to arbitration 23 under AS 09.55.535. 24 * Sec. 20. AS 09.30.065, as amended by sec. 10 of this Act, and AS 09.55.535(k), as 25 enacted by sec. 12 of this Act, have the effect of amending Rule 68, Alaska Rules of Civil 26 Procedure, by changing the provisions governing offers of judgment. 27 * Sec. 21. Rule 72.1, Alaska Rules of Civil Procedure, is repealed. 28 * Sec. 22. AS 09.55.535(i), enacted in sec. 12 of this Act, has the effect of amending Rule 29 601, Alaska Rules of Evidence, by prohibiting the use of an arbitrator as a witness in a 30 subsequent trial. 31 * Sec. 23. AS 09.55.535(i), enacted in sec. 12 of this Act, has the effect of amending Rule
01 82(b), Alaska Rules of Civil Procedure, by allowing the award of reasonable attorney fees in 02 certain actions. 03 * Sec. 24. AS 09.68.125, as enacted in sec. 17 of this Act, has the effect of amending Rule 04 95, Alaska Rules of Civil Procedure, by requiring imposition of sanctions for certain failures 05 to sign pleadings, motions, or other papers. 06 * Sec. 25. SEVERABILITY. Under AS 01.10.030, if any provision of this Act, or the 07 application of a provision of this Act to any person or circumstance is held invalid, the 08 remainder of this Act and the application to other persons shall not be affected. 09 * Sec. 26. APPLICABILITY. This Act applies to all causes of action accruing on or after 10 the effective date of this Act.