North Carolina Trial Law Blog

Contributory Negligence in NC: why comparative won't raise insurance rates

NC Lawyers' Weekly has provided a great link to an article that was run in the Winston-Salem Journal about contributory negligence laws in North Carolina. 

Contrubutory Negligence is an issue that people don't know or care about, until they face the problem themselves.  Basically, in NC, even if you are hurt by someone else's negligence, if the other person can prove you are just a little bit to blame for your injury, you are barred from any recovery.  That's right.  Someone else is 99.9% to blame, and you are barred from recovery.

Columnist Scott Sexton has written a series of excellent articles on the subject and really puts a human face on this convoluted and political issue.  I highly recommend reading these articles.

I'll also add this to the mix.  One of the problems with contributory negligence is that it is so often a bar to people seeking legal representation.  Lawyers who represent injured people know that they could spend years working on case and lose everything at trial simply because a jury felt the Plaintiff may have played some very small part in causing the accident.

Here are some the the previous articles by Sexton:

Contibutory Negligence: it's "an insurance company's dream "

"Never mind that Joshua was 7 years old and was within 3 feet of the curb, or that Logan was drunk and driving on the wrong side of the road. "By way of affirmative defense, Defendant Logan pleads the contributory negligence of the decedent Plaintiff Joshua Franklin Palomares-Beckles," wrote Rodney Guthrie, Logan's attorney. If a jury in North Carolina decides that you are even a tiny bit at fault in this sort of case, you are entitled to nothing under state law, under a concept called contributory negligence. "In general, I'd say contributory negligence is an insurance company's dream," said Walter Holton Jr., the attorney who filed the lawsuit on behalf of Beckles-Palomares. "

Wreck victim faces being victimized by outdated law

"After an automobile accident in New Hanover County involving his daughter, Ashley, a student at the University of North Carolina at Wilmington, Norris has become something of an expert on a legal concept known as "contributory negligence," an outdated and completely unfair area of insurance law used only here and in three other states. That leaves option C. "Our insurance company is also using the contributory-negligence law claim that Ashley is limited in what we can recover," Norris said.

'There is no lobby for the little people' in this state

"Just four states - North Carolina, Virginia, Alabama and Maryland - still hang on to the concept of contributory negligence, a relic from English Common Law. "

Don't believe hype that law would increase insurance rates

By Scott Sexton

JOURNAL COLUMNIST

Scott Sexton
Email	Bio

On its face, insurance law - specifically a legal concept called “contributory negligence” - is something that only a serious policy nerd could love.

That is, unless (or until) you or someone you know gets hosed by that law. Then it’s not so boring.

Contributory negligence works like this: If you’re in an accident and deemed to be just 1 percent at fault, you’re not legally entitled to one red cent to cover your damages from the idiot (or his or her insurance company) who was 99 percent to blame.

Three recent columns explored some of the more outrageous abuses of this law. Possibly the worst was the insurance-company attorney who argued that a 27-year-old man killed by a hit-and-run driver in October 2003 while changing a flat tire in Orange County was partly responsible for his own death.

It’s a shameless, outdated blame-the-victim strategy. It also seems like an easy law to change.

Yet objections remain. The state, for example, could switch to a “comparative-negligence” system. If you’re 90 percent at fault, you (or your insurance company) pay 90 percent of the damages.

“Comparative negligence is a nightmare to apply. Few people agree on the percent fault they are assessed, it increases lawsuits, is a cash cow for lawyers, and raises everyone’s insurance rates,” wrote one reader who works in the insurance industry. “If you haven’t noticed, N.C. enjoys some of the lowest auto-insurance rates in the country.”

Good point. And it’s one worth exploring.

Low-rate state

North Carolina does indeed enjoy consumer-friendly auto-insurance rates - the sixth lowest in the country, according to the N.C. Department of Insurance.

That’s not, however, because of any sense of fair play by insurance companies nor because contributory negligence keeps costs down.

The credit goes to a man who next to nobody has heard of, state Insurance Commissioner Jim Long. He is basically the final word on insurance rates in North Carolina.

Every Feb. 1, the N.C. Rate Bureau - an umbrella organization representing insurance companies - files a rate request. The bureau then makes a rate recommendation. Actuaries and attorneys with the Department of Insurance negotiate any changes with the rate bureau. If there’s no agreement, then Long decides.

“It’s a pretty long and pretty dull process unless you are an actuary,” said Chrissy Pearson, a spokeswoman for the Department of Insurance.

Given that background, I figured that Long’s thoughts on the merits of contributory negligence versus comparative merits would be worth hearing.

You can read the rest of the article by going to the Winston-Salem Journal.

-Chris Nichols

www.NicholsTrialLaw.com

Liens and Workers' Compensation

I had the pleasure of speaking this  morning at the North Carolina Academy of Trial Lawyer's Workers' Compensation Roundtable Seminar.  I was pinch hitting for a number of State and federal Employees who were supposed to talk about:  Medicaid, Medicare, State Employee Health Plan, and TriCare.

Instead, they got me.

I am posting a link to my PowerPoint presentation for  those in attendance who wantde the "paper" copy of my talk.  Here is the link:  Ahlborn PowerPoint Slide show

Thanks for all the great questions!

Chris Nichols

www.NicholsTrialLaw.com

Judicial Election Results in NC

Well, the results of the election are in and the numbers look good.  NC selected moderate, experienced Judges for the Supreme Court and Court of Appeals.

The Raleigh News & Observer reports (as of this posting):

Supreme Court (Chief Justice)     Sarah Parker 1126541     Rusty Duke 564619 2761 of 2767 precincts reporting Court of Appeals (Stephens)     Donna Stroud 767034     Linda Stephens * 763043 2761 of 2767 precincts reporting Supreme Court (Assoc. Justice Martin)     Mark Martin * 992306     Rachel Hunter 595026 2761 of 2767 precincts reporting Supreme Court (Assoc. Justice Timmons-Goodson)     Patricia Timmons-Goodson * 943645     Eric Levinson 676569 2761 of 2767 precincts reporting Supreme Court (Assoc. Justice Wainwright)     Robin Hudson 798619     Ann Marie Calabria 778657 2761 of 2767 precincts reporting Supreme Court (Chief Justice)     Sarah Parker 1126541     Rusty Duke 564619 2761 of 2767 precincts reporting

You can read all the election results at the N&O Here.

With the exception of Donna Stroud, all of the experienced appellate Judges were re-elected.  Now the Hudson seat at the Court of Appeals will get a new appointment by Governor Easley.

The one exception to incumbents getting re-elected was the Stephens v. Stroud race.  Donna Stroud, a Republican from Zebulon won the election.  I think the good news is that she has served as a District Court Judge since 2004, and has concentrated on family law during her career.  I always think it is a good thing for a Judge to have actual trial experience and to have worked in a law firm with real clients.  This seems to bring a practical touch to the bench, so I'll be interested to see how her opinions stack up.  It also looks like her partners in her previous firm practiced criminal defense law, so she brings a fairly broad range of experience to the Court.

The Election of Judge Hudson to the Supreme Court may have some interesting implications is the Ezell case, discussed in the Medicaid forum on NC Trial Law Blog, is accepted for a rehearing.  Judge Hudson wrote the Court of Appeals majority opinion in that case that, in my opinion, properly addressed the legal issue.

Thanks to all that voted in this very rainy election.  I stood at my precinct poll in the pouring down rain from 6:00 am until 7:00 pm, with two breaks to go home and change into dry socks and shoes.  It was a miserable day, weather wise.  We set out an empty coffee cup in the morning and it was full by the end of the day.  A 16 ounce coffee cup!! 

Chris Nichols, www.NicholsTrialLaw.com

Punitive Damages Against an Estate Blocked by Court

The North Carolina Court of Appeals has ruled today that a plaintiff is not entitled to recover punitive damages from an Estate of a tortfeasor.  In the matter of Harrell v. Estate of Perry, the COA addressed an appeal from a Superior Court where the Superior Court had ruled that pursuant to NC Rule of Civil Procedure 12(b)6, the Plaintiff had failed to state a claim upon which releif can be granted under some legal theory.  The gist of the opinion is that punitive damages are awarded to punish the wrongdoer, and the death of the wrong doer precludes his being punished by the assessment of punitive damages.

Drunk Defendant Dies After Injuring Plaintiff
The opinion of the COA is light on facts, but does cite that the Plaintiff alleges he was injured in a motor vehicle collision caused by an intoxicated defendant.

The Plaintiff brought a case for compensatory and punitive damages and the defendant moved to dismiss under 12(b)6.

Levinson: You Can't Deter the Dead with Punitives
Judge Levinson, writing for the panel, cited a 1982 decision that held that punitive damages were not appropriate against a deceased defendant.  The issue in this case was whether the 1996 amendment to the punitive damages statute, N.C. Gen Stat. § 1D-1, expanded the scope of punitive damages in the section that states that punitive damages may be awarded:

“to punish a defendant for egregiously wrongful acts and to deter the defendant and others from committing similar wrongful acts.”

And, But or Or Won't Get You Very Far
While the Plaintiff argued the obvious policy reasons behind the statute, that punitives should be awarded against an estate to discourage similar bad behavior of people that are living, the COA dodged that policy discussion through statutory interpretation.

Judge Levinson wrote:

     It is a common rule of statutory construction that “when the conjunctive 'and' connects words, phrases or clauses of a statutory sentence, they are to beconsidered jointly.”  Lithium Corp v. Bessemer City, 261 N.C. 532, 535, 135 S.E.2d 574, 577 (1964).  Thus, an individual is subject to punitive damages where he or she may be punished for the egregiously wrongful act and be deterred from committing such an act in the future.
    In the instant case, defendant died sometime before plaintiff filed the subject complaint.  Because defendant is deceased, deterring him from committing a similar wrongful act in the future is, of course, not possible.  Consequently, the statutory mandate of G.S. § 1D-1, providing that the appropriateness of punitive damages is contingent upon punishing and deterring defendant from engaging in similar conduct in the future, cannot be achieved. 

So there you have it.  The "and" means that if punitives deter someone else, that's great, but that alone will not allow punitive damages to be granted.  You need a live tortfeasor to punish first.

I don't particularly agree with this interpretation.  To me, the "plain meaning" of the statute is that it is meant to deter other acts like this, whether they be from the defendant or from other similarly situated defendants.

-Chris Nichols
www.NicholsTrialLaw.com

 

Want Medicaid? Be a citizen, not an illegal

My friend Holly sent me this bit of news. New law becomes effective today; Medicaid recipients required to provide proof of citizenship (See below my comments for the story)  I have mixed feelings, but in the end, I don't think this is the right move for our government.  On the one hand we don't want to "give" medical help to the poor who are not citizens, but at the same time our country doesn't do much to prevent people from coming here to provide cheap labor. 

Also, I recently heard a statistic that many illegal immigrants actually pay a lot of taxes.  Here is how that works.  Most illegals will use a fake Social Security number to get low paying jobs.  Or they will apply for a Tax Id so they can get driver's licenses, etc.  The employer, in a typical wink and nod fashion, says, "Ok, you have a Social Security #, you MUST be legal."  Then the employer does the standard state and federal witholding to "prove" that they "thought" the employee was legal.  The employee gets a W-2 at the end of the year.  The employee/illegal usually never files a tax return, and they never get a tax refund.  Thus, millions of "unclaimed" dollars flow into the Federal Reserve that probably would not be there if the workers were naturalized and were scurrying to H&R Block for their "tax refund loan" at the annualized interest rate of 98%. (A subject for another day!) 

Medicaid, is, of course, funded with tax dollars as is Medicare, which has it's own separate tax right on the W-2.  So, in many instances, these "illegals" are absolutely paying for their right to receive Medicaid. 

Finally, people get sick whether they have health benefits or not.  Hospitals are not allowed to refuse treatment to very sick people in the ER.  So by denying Medicaid benefits, the federal government is simply passing the buck on to private  and state local hospitals, who will, in turn, pass the buck to consumers.  Also, by denying Medicaid, which will pay for "well" visits and preganacy care, when people do come to the ER they will be sicker and the the treatment will be costlier.  In the end, this will "cost" as much as it supposedly saves, I think.

I think this is classic penny wise-pound foolish thinking and is more motivated by politics than good sense.  Not to mention, we are a wealthy nation, we can afford to take care of the poor.  Especially when they are the ones doing the dirty work.

New law becomes effective today; Medicaid recipients required to provide proof of citizenship

By James Romoser

JOURNAL REPORTER

Friday, September 1, 2006

Starting today, people in North Carolina who are on Medicaid will have to prove that they are U.S. citizens, or they will risk losing their health-care coverage.

The new documentation requirements are part of a federal law intended to prevent illegal immigrants from getting health benefits through Medicaid, the government-run health-insurance program for the poor.

The Congressional Budget Office estimates that the law will save the federal government $735 million over 10 years.

But local Medicaid officials and some national health-care advocates say the new rules are too strict and mostly unnecessary. There is not a widespread problem of illegal immigrants getting Medicaid, they say. Some critics worry that the rules will hurt Medicaid recipients who are citizens but for some reason are unable to produce a passport, an original birth certificate or other required documents.

The rules will further complicate a process that is already strenuous for both Medicaid applicants and social-services caseworkers.

"You can basically get a million-dollar mortgage easier than you can get Medicaid," said Joe Raymond, Forsyth County's director of social services. Medicaid, a federal program, is run mostly by the states and is administered at the local level through county social-services departments. Applicants must meet income requirements and other eligibility criteria.

READ the full story here.

Chris Nichols

www.NicholsTrialLaw.com

Expert Speed Testimony now allowed in NC

New DWI Laws Allow Speed Testimony under Rule 702(i)
As of December 1, 2006, the new Rule 702(i) will allow accident reconstructionists who have been qualified as experts to give an opinion as to the speed of a vehicle, even if they did not observe the moving vehicle(s). Please note that this should apply to accidents occurring on or after December 1, 2006.

You can view the legislation as ratified on the General Assembly's website.

Speed Testimony not Allowed in Past

North Carolina case law over the last decade has not allowed expert speed testimony.  The only speed testimony allowed has been from eye witnesses who actually had the opportunity to observe the vehicles.  There have been several cases where qualified experts have attempted to give speed testimony, but have been blocked.

Speed Testimony a killer combined with Contributory Negligence

North Carolina is, of course, a contributory negligence state.  That means that if the Plaintiff contributed to the negligence that caused the injury or damages, the Plaintiff is completely barred from recovery.

I think that with this new rule, we Plaintiff's will see a huge increase in the number of contributory negligence defenses.  I particularly think this will be the case in Interstate collisions where the common juror knows that most people exceed the posted speed limit.

Also, I think we'll see this defense mounted in country road intersection cases.  The type where the defendant pulls from a side road to the "main" country road that connects two rural towns.  Many of these rural roads have speed limits of 45 mph, and local residents routinely exceed that speed when there are no cars present on the highway.

New Cottage Industry of Insurance Experts?

Because insurance companies have nearly unlimited financial resources, I think that we will see quick growth in the accident reconstruction trade and will routinely see "speed opinions" in personal injury cases.  Insurance defense attorneys know that contributory negligence is an easy way to avoid paying on a claim, and that many juries are happy to point the blame both directions, at the Plaintiff and the Defendant.

Additionally, in smaller cases, the Plaintiff may not have the resources to spend several thousand dollars on an expert opinion to contradict the insurance expert's opinion.  So as lawyers, we need to brace ourselves for this in the coming year.

I personally think this is bad law for North Carolina.  I believe in science, but I also believe the old yard, "Statistics don't lie, liars use statistics."  I think that these experts will be "telling" a jury what to do, using complicated formulas, and may be misleading.

Maybe this will lead our General Assembly to conclude, once and for all, that contributory negligence should be replaced with comparative fault and North Carolina should join 47 others states in the modern age.

Tips to Avoid Contributory Negligence and Expert Speed Testimony

• Get Pictures Early

Expert testimony based on speed is dependent on physical evidence for the most part.  Experts measure skid marks, co-efficients of friction, tire wear, physical impact to vehicle parts, and other objective criteria to make educated guesses on speed.

I've found that it is important to collect the data early because opposing experts tend to only take photographs of what is favorable to their position.  So I suggest that you get out as quickly as possible and document your crash.

• Spoliation Letters Should go out Immediately

You need to send a spoliation letter to the Defendant and his/her insurance company to make sure that their vehicle is preserved for your investigation.  My guess is that because insurance companies are often very slow to process these items, you may find that the defendant's vehicle gets fixed or sold before they "preserve" the evidence.  If the insurance company destroys the evidence before you can document it, you have an excellent chance to get their expert's opinion precluded with a motion in limine.

• Eye Witness Statements Trump Expert Opinions

I also suggest that you have a staff member or a private investigator take statements immediately from eye witnesses, including the defendant.  If you have not filed a suit, you can contact the defendant directly.  While this is not law, I believe that an eye-witness account of the speed of the vehicles will "trump" that of calculations of the expert.  Additionally, eye-witnesses will be able to help establish a defense of "last clear chance" saying that your client had no way to avoid the collision, no matter what speed he or she may have been going.

In conclusion, I think the new law will present some challenges to plaintiff's lawyers but if we get the case moving early and prepare for the worst, we should be able to beat expert opinions that have been bought and paid for by the rich insurance industry.

Chris Nichols

www.NicholsTrialLaw.com

Example of How SEHP Lien Operates

When the Governor Signs[ed] the Bill, How will [does] it Work?

The Legislature has passed a revision to the State Employee and Teachers Health Plan lien and has sent that bill to the Governor for signature.  Refer to this post for the text of the bill.

Up until now, the SEHP limited itself to no more than 50% of a gross settlement.  Now the lien law limits SEHP to 50% of the settlement AFTER attorney fees have been paid.  The Amendment to the original legislation allows a reduction for "reasonable attorney fees" but leaves the decision regarding "reasonableness" in the sole discretion of the SEHP.

EXAMPLES of how the "old" lien and the "new" lien operate:

The current law which is not followed (Actual "old" SEHP lien law says this):

          Assume SEHP claims $20,000 lien

30,000 settlement

10,000 Attorney fees

20,000 SEHP lien  (paid $20,000)

$0        Client

NOW, before the "new" bill is in effect: (Note, new bill signed on August 31, 2006 and applies retroactively)

          Assume SEHP claims $20,000 lien

30,000 settlement

10,000 Attorney fees

15,000 SEHP paid in full  (50% of 30,000, reducing $20,000 lien by $5,000)

5,000 CLIENT

THE "NEW" Lien Law when signed by the Governor:

(NOTE:  This haexamples below were edited on 9.6.06 because the previous post was incorrect.  What is below is now correct.)

Example 1:  Lien exceed 50% of the settlement

30,000 settlement

-10,000 Attorney fees

$20,000 Subject to SEHP lien

SEHP can take no more than 50% AFTER attorney fees, so

$20,000 > $10,000 (1/2 after attorney fees), thus

-$10,000 SEHP Lien ($20,000 reduced to 50% of 20,000 after atty fees)

$10,000    To CLIENT

Example 2:  Lien does NOT exceed 50% of the settlement

          Assume SEHP claims Lien of $9,000

30,000 settlement

-10,000 Attorney fees

$20,000 Subject to SEHP lien

SEHP can take no more than 50% AFTER attorney fees, so

$ 9,000 < $10,000 (1/2 after attorney fees)

-$9,000 SEHP Lien (NO REDUCTION IN LIEN)

$11,000    To CLIENT

As you can see, the Amendment increases the client's recovery when the lien exceeds half of the recovery AFTER attorney fees. The old law was working with 50% of the GROSS recovery and now the formula works with (essentially) the NET recovery.  Also, this Amendment provides an excellent reason for the client to hire you because the "attorney fee" cut is not available to unrepresented SEHP members.

Below is a quick review of the application of the lien:

For payments made from January 22, 2003 to July 20, 2004, the SEHP claims a right of equitable subrogation.  The SEHP has not done much to enforce this, sending a few notice letters out on cases where they thought there was third party insurance, mostly car wrecks.

The SEHP, to my knowledge and by all reports, has not litigated the equitable subrogation right.  I do not think that a right of equitable subrogation is recognized by North Carolina law.

If payments were made for related health care after July 22, 2004, then I think you must request a statement of the lien, which may prompt the SEHP to claim the equitable subrogation for payments made before July 2004.

There is also a good argument that for equitable subro to even exist, there must be direct notice of the claim to the lawyer or client.  There does not need to be "notice" for the lien arising after July 2004.

If you do get caught up in the equitable subro claim because of post July 2004 payments, the SEHP has significantly negotiated on the equitable subro claims.

Also, the date that the SEHP uses to determine the lien is the date of their payment, not the date of service.  The lien does not apply to UM or UIM recoveries.

If you have questions, please email Chris Nichols.

Chris Nichols

www.NicholsTrialLaw.com

State Employee Health Lien goes to Governor for signature

I just received the most recent report about the proposed changes to the NC State Employee's Health Plan Lien.  It's all good news.

2005 Technical Corrections Act Passes Vote

The 2005 Technical Corrections Act conference report (that contained the "technical" corrections for the lien) has been adopted by both houses, and now goes to the Governor for his signature. There seems to be nothing controversial in the remainder of the bill, so we don't expect a veto of any sort from the governor.

The technical  corrections act from last year is where the subrogation provision was inserted toward the end of the long session, because SB 983 was holed up in the house.  It was included in each version of the tech corr bill and passed by the respective houses, but there was never agreement on the bill BETWEEN the two houses.

Bill needs to be signed by Governor Easley

The latest action of the General Assembly is that needed agreement, and as soon as the Governor signs the bill, it will be law.  The language of the bill makes it "retroactive" to the initial passage of the lien legislation back in July of 2004, so we don't have to worry about having two "sets" of liens.

This is fantastic news and due in large part to the long term efforts of Holly Bryan and Dick Taylor at the NC Academy of Trial Lawyers.

Chris Nichols

www.NicholsTrialLaw.com

State Emloyees Lien Statute REVISED!!!(ALMOST)

     Hurray!!!  The NC Teachers & State Employees Lien has moved one step closer to being revised to allow for attorney fees and to limit the scope of the lien.  There bill came out of the Senate technical corrections committee yesterday and can be found here.  Now we have to wait for the house to either give it a thumbs up, or a thumbs down.  That might happen on Monday.

     In the mean time, what will the new bill mean? 1)  The SEHP can never take more than 50% of the GROSS settlement.   2)  The SEHP must then reduce their recovery for "reasonable" attorney fees.  3)  SEHP must also pro-rate with unpaid medical providers and other lien holders.

     Why is this better?  Well before, the SEHP could have taken 100% of any settlement, but they were administratively limiting themselves to 50% of gross, but not reducing for attorney fees.   This mean that in a typical personal injury case, the client only received 15% of the settlement.  NOT FAIR.

     We've been waiting for this bill to pass for a very long time.  I'VE been working to get this bill passed since 2004 when it was enacted.  After a lot of work with NCATL we drafted, redrafted, negotiated, and redrafted, we finally got something passed.  Hurray!

Teenagers, Cell Phones and the Law

Following a legal trend from around the nation, the North Carolina Senate has finalized legislation to ban teenagers from operating cars while talking on cell phones.

Starting December 1, 2006, teenagers may be fined $25 and get a six month extension of their "learner's permit" if they are caught driving and talking.