Legislature(1993 - 1994)

02/03/1994 03:00 PM L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
  HB 292 - CIVIL LIABILITY                                                     
                                                                               
  Number 416                                                                   
                                                                               
  CHAIRMAN HUDSON brought up HB 292 and stated that the work                   
  draft now before the committee was dated 2/2/94.                             
                                                                               
  Number 440                                                                   
                                                                               
  REP. GREEN moved CSHB 292(L&C) dated 2/2/94.  No objections                  
  were heard; it was so ordered.                                               
                                                                               
  Number 460                                                                   
                                                                               
  REP. PORTER stated there were a couple of areas of concern                   
  brought up by Mike Ford that the committee needed to                         
  discuss.                                                                     
                                                                               
  Number 480                                                                   
                                                                               
  MIKE FORD, Staff Attorney, Legal Services, raised three                      
  points for the committee's consideration.  Mr. Ford provided                 
  the committee with a written detailed memo that appears                      
  below.                                                                       
                                                                               
  1) By adding the phrase, "was discovered or should have been                 
  discovered by the exercise of reasonable diligence" to Sec.                  
  09.10.065(a)(1) in section 4, I believe the committee has                    
  adopted existing law applicable to determining when the                      
  clock starts for purposes of application of statutes of                      
  limitation.  In legal terms, this date is also known as the                  
  date when a cause of action "accrues."  The significance of                  
  this relates to another section of the draft section 6.  In                  
  section 6, the current two-year statute of limitation for a                  
  tort suit is reenacted as section 09.10.075.  This two-year                  
  limit that requires a tort suit should be brought two years                  
  from the date of accrual, or two years from when a person                    
  knows or should know that that the person has a claim.  In                   
  short, there are two almost identical provisions relating to                 
  accrual of an action, one contained in section 4 and another                 
  in section 6.  This may lead to confusion and unnecessary                    
  litigation over the enactment of similar provisions of law                   
  applicable to the same lawsuit.  One solution to this                        
  situation is to change section 09.10.065 in a manner that                    
  leaves sec. 0910.075 as the applicable statute of                            
  limitation.  This would create one two-year statute for all                  
  tort suits, except when a shorter period is imposed under                    
  another provision of law.                                                    
                                                                               
  2) In section 4, section 09.10.065(a)(1) appears to allow                    
  two years to bring a negligence action against a healthier                   
  care provider.  The key point is that the committee amended                  
  this provision to allow a person two years from when the                     
  injury is discovered or should have been discovered to bring                 
  suit.  It appears that this rolling two-year period would be                 
  cut off by the provisions of section 3.  Under section                       
  09.10.052(a)(3), in section 3, a person has six years from                   
  the date "of the last act alleged to have caused the person                  
  injury, death, or property damage" to bring suit.  Under                     
  this provision, I believe that a person negligently injured                  
  by a health care professional would have only six years from                 
  the date of injury to bring a lawsuit, not two years from                    
  the date the person discovers or should have discovered the                  
  injury as contemplated in section 4.  In short, if the                       
  committee wishes to retain the rolling two-year discovery                    
  limit for actions against a health care provider, then it is                 
  necessary to amend section 09.10.052 in section 3 to ensure                  
  this occurs.                                                                 
                                                                               
  3)  In section 7(AS 09.17.010(c), section 9(AS 09.17.020(c),                 
  and section 25 (AS 09.55.580(h), I have deleted the                          
  requirement that a person be convicted of the offense and                    
  substituted language regarding attempting, committing, or                    
  fleeing the commission of the class A or unclassified                        
  felony.  Requiring that the person bringing the action be a                  
  "victim of that offense" raises a question concerning a                      
  person who was "fleeing" from the crime.  It is unclear                      
  whether a person injured by a person fleeing a class A or                    
  unclassified felony would also qualify as an exception to                    
  the cap on noneconomic damages.  For example, assume that a                  
  person commits a class A felony and then flees the crime by                  
  car.  While heading down G street the offender inures a                      
  pedestrian.  Was the pedestrian a "victim of the offense" as                 
  required under this language?  The problem is also                           
  illustrated by looking at the language in AS 09.17.030 (in                   
  section 10).  If the language in section 10 were used, the                   
  benefits of the law would apply to the pedestrian in the                     
  example because the amended language requires that the act                   
  of fleeing the class A felony relate to the pedestrian's                     
  injury, not that the pedestrian be a victim of the class A                   
  felony.                                                                      
                                                                               
  Number 570                                                                   
                                                                               
  REP. PORTER moved to delete in section 4 (a)(1) and                          
  renumber.  No objections were heard; it was so ordered.                      
                                                                               
  Number 593                                                                   
                                                                               
  MR. FORD gave an example of the concern he outlined in                       
  number two above:  If a doctor is negligent in some way,                     
  seven years go by before you know about it; none of the                      
  exceptions apply; it wasn't intentional, wasn't gross                        
  negligence, wasn't fraud, then you would lose that claim                     
  under this language.                                                         
                                                                               
  REP. PORTER replied that that is absolutely correct.  He                     
  added that is what a statute of repose is.                                   
                                                                               
  REP. PORTER was surprised to see that the current version of                 
  HB 292 did not contain the exception to the statute of                       
  repose that covered the instance:  if a doctor performing                    
  surgery leaves something inside of a person and the person                   
  doesn't discover it for 20 years.  Rep. Porter said he does                  
  not remember that provision being deleted.                                   
                                                                               
  TAPE 94-8, SIDE B                                                            
  Number 001                                                                   
                                                                               
  MR. FORD stated there was that provision at one time.                        
                                                                               
  REP. MACKIE asked what action took that provision out.                       
                                                                               
  Number 015                                                                   
                                                                               
  MR. FORD did not recall when that provision was taken out.                   
                                                                               
  Number 025                                                                   
                                                                               
  REP. MACKIE stated for the record that he had specifically                   
  brought this concern up before and felt comfortable that                     
  this was taken care of.                                                      
                                                                               
  Number 035                                                                   
                                                                               
  REP. PORTER stated that the wording as Mr. Ford mentioned,                   
  the limitation imposed under (A) of this section which is                    
  the six year statute of repose, is suspended until resolved.                 
  "During any period in which there is fraud, intentional                      
  concealment, etc., the undisclosed presence of a foreign                     
  body, that has no therapeutic or diagnostic purpose or                       
  effect, in the body of the injured person and the action is                  
  based on the presence of the foreign body."                                  
                                                                               
  Number 040                                                                   
                                                                               
  MR. FORD said the langauge just stated does appear in the                    
  original HB 292, but it appears in the section against                       
  health care providers.                                                       
                                                                               
  Number 048                                                                   
                                                                               
  DANIELLA LOPER, staff, Rep. Brian Porter, stated that "that                  
  langauge was deleted because on the accrual date it was felt                 
  that, according to the discovery rule, since you could                       
  discover it any time, and the statute of repose was not in                   
  question yet."                                                               
                                                                               
  Number 050                                                                   
                                                                               
  MR. FORD agreed and added that it was felt at that time that                 
  the langauge was duplicative, but if the committee wanted                    
  that exception to remain, then they should reinsert the                      
  langauge.                                                                    
                                                                               
  CHAIRMAN HUDSON stated that this was the intent of the                       
  original bill and asked Mr. Ford to prepare an amendment to                  
  reinsert the language.                                                       
                                                                               
  Number 056                                                                   
                                                                               
  CHAIRMAN HUDSON asked Mr. Ford to prepare an amendment to                    
  reinsert the language.                                                       
                                                                               
  Number 065                                                                   
                                                                               
  MR. FORD explained his last concern by using the following                   
  example:  If a person has committed a crime, class A or                      
  unclassified felony, they leave the scene and three blocks                   
  away they hit and kill a pedestrian.  Is the pedestrian a                    
  person who is not subject to the cap on noneconomic damages?                 
                                                                               
  MR. FORD asked if the committee intended that any resulting                  
  injury from fleeing the crime would eliminate the cap or did                 
  they intend to limit recovery to those victimized during the                 
  commission or attempt to commit a crime?                                     
                                                                               
  Number 197                                                                   
                                                                               
  REP. PORTER suggested the committee delete the language "or                  
  fleeing" on page 6, line 12, page 6, line 27, and page 13,                   
  line 13.  There were no objections; it was so ordered.                       
                                                                               
  Number 205                                                                   
                                                                               
  REP. HUDSON raised a concern brought to his attention                        
  regarding the deletion of the exception to limits on                         
  noneconomic caps for disfigured or severely impaired                         
  persons.  Chairman Hudson explained that it was his                          
  understanding that what had been accomplished with the                       
  rewrite of the statute was that the committee had done no                    
  "damage" to the concept.                                                     
                                                                               
  Number 215                                                                   
                                                                               
  MR. FORD explained that under present law there is a cap for                 
  recovery of noneconomic damages, but there is an exception                   
  for disfigurement or severe physical impairment.  The                        
  version of HB 292 before the committee now eliminates that                   
  exception.                                                                   
                                                                               
  Number 225                                                                   
                                                                               
  CHAIRMAN HUDSON asked if this was the committee's intent.                    
                                                                               
  Number 254                                                                   
                                                                               
  REP. PORTER replied that it was the committee's intent to                    
  delete this exception.  Rep. Porter suggested this exception                 
  has been used as a major loophole to bring large suits.                      
  Rep. Porter cited the example of a broken figure that heals                  
  crooked.  Should a person be allowed to use the exception to                 
  the $500,000 cap to sue for more?                                            
                                                                               
  REP. PORTER added that the terms in question are ambiguous.                  
                                                                               
  CHAIRMAN HUDSON asked if the courts had defined these terms.                 
                                                                               
  MR. FORD answered that he was sure the courts had dealt with                 
  this issue, but he was not aware of any definition.                          
                                                                               
  REP. SITTON stated that $500,000 would not be an appropriate                 
  cap for someone who was severely brain damaged, and we have                  
  to rely on the judgement of the jury in some cases.  He                      
  suggested that the committee tighten up the definition of                    
  severe physical impairment.                                                  
                                                                               
  Number 340                                                                   
                                                                               
  REP. HUDSON stated he thought the issue was important to                     
  bring up, but if the exception were to be reinserted, the                    
  definitions would have to be really tight.                                   
                                                                               
  Number 345                                                                   
                                                                               
  MR. FORD responded that the committee should remember that                   
  in order for the exception to come into play in a lawsuit,                   
  it would have to be a very serious injury.  He doubted that                  
  a minor disfigurement or impairment would be at issue.                       
                                                                               
  Number 355                                                                   
                                                                               
  REP. MULDER surmised that a severely injured person would                    
  most likely be going after damages in the economic and                       
  punitive categories.  Rep. Mulder supported the deletion of                  
  the exceptions to the noneconomic cap.                                       
                                                                               
  Number 360                                                                   
                                                                               
  CHAIRMAN HUDSON added that one of the reasons he supported                   
  the deletion was because the interpretation of the terms                     
  used was unclear.  Furthermore, the exception only applies                   
  in a relatively few cases on an annual basis.                                
                                                                               
  Number 400                                                                   
                                                                               
  REP. SITTON asked if doctors and hospitals were required to                  
  carry malpractice insurance in Alaska.                                       
                                                                               
  Number 408                                                                   
                                                                               
  MR. FORD replied that there is no mandatory insurance law in                 
  Alaska.  As a practical matter, a doctor who works for a                     
  hospital is required to have insurance.                                      
                                                                               
  Number 428                                                                   
                                                                               
  REP. MULDER wanted to clarify the point regarding the                        
  relationship between a doctor on contract and the hospital                   
  he works out of.  What kind of recourse would a patient have                 
  if something went wrong?                                                     
                                                                               
  Number 440                                                                   
                                                                               
  REP. PORTER replied that a major focus of this legislation                   
  is to make things fair and equitable for all.  He stated                     
  that he did not think it fair that a hospital be held liable                 
  for the actions of a doctor on contract with them when they                  
  neither train or supervise them.  This is in contrast to the                 
  doctors who are hired directly by the hospital; they are                     
  employees and the hospital should be held liable for there                   
  actions.                                                                     
                                                                               
  Number 460                                                                   
                                                                               
  CHAIRMAN HUDSON clarified that doctors who are hired by the                  
  hospital are covered by the hospital, but doctors who are                    
  independent contractors are not required to have insurance                   
  and are not covered by the hospital.  This is the intent of                  
  this legislation.                                                            
                                                                               
  Number 466                                                                   
                                                                               
  REP. WILLIAMS asked for further clarification on the                         
  liability of hospitals and doctors.                                          
                                                                               
  Number 477                                                                   
                                                                               
  REP. PORTER reiterated his points on liability factors.                      
  Only the independent health care workers are not covered by                  
  the hospitals.  Any employee of the hospital would be                        
  covered by the hospital's liability insurance.                               
                                                                               
  Number 491                                                                   
                                                                               
  REP. MACKIE hypothesized that a nurse employed by a hospital                 
  but under the direction of a doctor could conceivably be                     
  part of an operation gone awry.  In this case, would the                     
  hospital be a named defendant since they employ the nurse?                   
                                                                               
  Number 536                                                                   
                                                                               
  REP. PORTER replied that it is the difference of between                     
  criminal law and criminal evidence; it could be a violation                  
  of the law, but whether you can prove it or not is the                       
  question.  He added that if the nurse had some degree of                     
  responsibility and culpability, which is a matter of proof                   
  that the jury would decide, then the hospital could be named                 
  and held responsible.                                                        
                                                                               
  Number 550                                                                   
                                                                               
  REP. SITTON stated that in 1989, with 800 doctors in the                     
  state, there were only four or five malpractice suits.  With                 
  this in mind, he did not feel insurance rates will come down                 
  since the insurance industry is fueled by competition and                    
  the premiums obviously do not rely on these few cases.                       
                                                                               
  REP. SITTON added that he has not heard from a single                        
  insurance company that this legislation will result in                       
  reduced rates.                                                               
                                                                               
  Number 570                                                                   
                                                                               
  REP. PORTER replied that Dave Walsh, Director of the                         
  Division of Insurance, and John George, lobbyist for the                     
  insurance industry, have both testified that insurance rates                 
  will come down if the legislation is passed and survives                     
  court challenges.                                                            
                                                                               
  TAPE 94-9, SIDE A                                                            
  Number 001                                                                   
                                                                               
  REP. WILLIAMS added his concern with whether or not the                      
  insurance rates will come down with passage of this                          
  legislation.                                                                 
                                                                               
  Number 020                                                                   
                                                                               
  REP PORTER stated there is a provision in HB 292 that                        
  requires the medical community to come up with a set of                      
  standards of practice with the aim towards eliminating the                   
  need of defensive medicine.  In addition, HB 292 asks the                    
  Division of Insurance to examine rates and report back to                    
  the legislature.                                                             
                                                                               
  Number 075                                                                   
                                                                               
  REP. SITTON stated that the testimony taken back in November                 
  was that it's not the large awards that run up insurance                     
  rates, but the host of small ones as stated by Mr. George.                   
  Rep. Sitton asked, if this is true, then why do we have the                  
  caps on the various damages?                                                 
                                                                               
  Number 100                                                                   
                                                                               
  REP. PORTER answered that it was his recollection that Mr.                   
  George testified that while the vast majority of claims are                  
  in the smaller range, it's the potential and periodic large                  
  claims that have the driving effect on rates.                                
                                                                               
  Number 120                                                                   
                                                                               
  REP. MULDER added that it's the potential exposure that                      
  drives the system.                                                           
                                                                               
  Number 185                                                                   
                                                                               
  REP. WILLIAMS asked the committee to revisit the issue of                    
  the deletion of the exceptions to the noneconomic caps.                      
  Rep. Williams expressed his particular concern about a                       
  person severely disfigured or impaired.                                      
                                                                               
  Number 207                                                                   
                                                                               
  REP. PORTER outlined the various options available to an                     
  injured person, damages for economic loss, medical coverage,                 
  punitive and noneconomic loss.                                               
                                                                               
  Number 245                                                                   
                                                                               
  CHAIRMAN HUDSON stated that deleting the exceptions is                       
  definitely a policy call on the part of the legislature and                  
  that the supporters of HB 292 believe its a significant one.                 
                                                                               
  Number 288                                                                   
                                                                               
  REP. WILLIAMS stated he feels uncomfortable with the                         
  deletion of the exceptions without more discussions.                         
                                                                               
  Number 308                                                                   
                                                                               
  REP. MACKIE stated he is against the cap of $500,000 for                     
  pain and suffering in severely impaired and disfigured                       
  cases.                                                                       
                                                                               
  Number 350                                                                   
                                                                               
  REP. GREEN asked if Rep. Mackie thought there was an                         
  appropriate limit or cap, $2,000,000 or $3,000,000 or so,                    
  which the injured person should be satisfied with.                           
                                                                               
  REP. MACKIE responded that he has a very good friend who is                  
  in that very situation and maybe they should ask him.  Rep.                  
  Mackie added that he meant no disrespect, but some sort of                   
  discussion should be attempted in order to tackle this                       
  issue.                                                                       
                                                                               
  REP. MULDER stated that he was sensitive to this issue                       
  because no amount of money could make a person physically                    
  whole again, but the policy question is what level is fair.                  
                                                                               
  Number 424                                                                   
                                                                               
  REP. PORTER stated that disfigurement and severely disabled                  
  are two different terms.  Rep. Porter contended that a bent                  
  finger is disfigurement and therein lies the large loophole                  
  that in reality negates the presence in present law of a cap                 
  on noneconomic damages.                                                      
                                                                               
  Number 430                                                                   
                                                                               
  REP. MACKIE agreed that losing a finger should not be                        
  regarded as a severe disfigurement or impairment; but                        
  someone who is confined to a wheelchair should not be                        
  covered with a cap.                                                          
                                                                               
  Number 454                                                                   
                                                                               
  CHAIRMAN HUDSON stated he did not want to sacrifice the bill                 
  over this issue.  He asked Rep. Porter if he felt his staff                  
  or counsel could redefine the problem that has created the                   
  change to begin with.  Maybe we could come up with a plug                    
  for the loophole and yet still accommodate the few cases a                   
  year that may fall into the disfigured or severely impaired                  
  situation, he said.                                                          
                                                                               
  Number 470                                                                   
                                                                               
  MR. FORD suggested that the committee look at qualifying                     
  disfigured, as impaired is qualified by "severely."                          
                                                                               
  Number 480                                                                   
                                                                               
  REP. PORTER  stated that it only qualifies the terms in the                  
  eyes of the beholder.                                                        
                                                                               
  Number 524                                                                   
                                                                               
  CHAIRMAN HUDSON summarized that the will of the committee                    
  seems to be to address this issue, and since the bill goes                   
  to Judiciary next, maybe Rep. Porter could suggest a                         
  solution.                                                                    
                                                                               
  Number 529                                                                   
                                                                               
  REP. MACKIE suggested that this issue would be a major one                   
  on the floor.                                                                
                                                                               
  Number 540                                                                   
                                                                               
  REP. PORTER told the committee he would be willing to work                   
  with staff and counsel to work up language that would define                 
  severe physical disability and impairment.                                   
                                                                               
  CHAIRMAN HUDSON instructed staff to draft a letter of intent                 
  to the Judiciary Committee that the Labor and Commerce                       
  Committee wishes the Judiciary committee to address this                     
  issue.                                                                       
                                                                               
  REP. WILLIAMS moved CSHB 292(L&C) with individual                            
  recommendations.  No objections were heard; it was so                        
  ordered.                                                                     
                                                                               
  CHAIRMAN HUDSON adjourned the meeting at 5:00 p.m.                           

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