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Wreck victim faces being victimized by outdated law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at Wilmington, Norris has become something of an expert on a legal concept known as "contributory negligence," an outdated and completely unfair area of insurance law used only here and in three other states.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

State Employee Health Lien: no cap under Wrongful Death Statute

When the changes to the State Employee Health Plan lien were enacted on October 1, 2006, the Legislature specifically exempted the SEHP from the $4,500 cap that is normally placed on medical providers collecting from wrongful death settlements.

Specifically, the Wrongful death Act (N.C.G.S. § 28A-18-2(a) ) was amended to say:

The limitations on recovery for hospital and medical expenses under this subsection do not apply to subrogation rights exercised pursuant to G.S. 135-40.13A.

This subsection becomes effective for deaths occuring on or after October 1, 2006.  The Plan is still limted to recovering no more than 50% of the net settlement after "reasonable collection costs" are subtracted from the total settlement.  "Reasonable" is presumed to be 33.3% by SEHP.

Chris Nichols
http://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

 

Medicaid Liens and Wrongful Death Cap

Under the North Carolina wrongful death statute, NCGS 28A-18, medical providers that have helped treat a person who then dies can only recover a maximum of $4,500 from a wrongful death settlement.  Unfortunately, that cap does not apply to Medicaid's lien if they have paid over $4,500 in medical bills.