Category Archives: General

Hu Hamilton Interviewed for Front Page Times Free Press Article on Caps

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On Saturday, November 26th, the Chattanooga Times Free Press, in a front page article, reported on the limitations placed on damages by the Tennessee legislature and Governor Bill Haslam in 2011, and how that law could severely limit recoveries by injured children and the parents of those who were killed.  Here are excerpts from the article by Zack Peterson, Courts Reporter:

“Families of the children killed in Monday’s bus crash can receive no more than $750,000 in personal damages under Tennessee law.

Tweaks made in 2011 to Tennessee’s tort reform law limited payouts in personal injury lawsuits against doctors and other businesses to $750,000.

That will include family members who consider filing civil lawsuits against Durham School Services and Johnthony Walker, the bus driver who lost control of his vehicle and smashed into a telephone pole and a tree. Six children died from the crash and many more were injured.”

“In the early 2000s, Tennessee’s and Georgia’s general assemblies pursued tort reform after complaints from doctors that their insurance rates were raising because of fat damage awards in frivolous malpractice lawsuits. The doctors said they might have to leave the states if lawmakers didn’t cap non-economic damages, such as pain and suffering.

Tennessee lawmakers settled on a $750,000 cap, but jurors can award any amount up to that — or nothing at all.

A Republican-dominated General Assembly extended the cap to all businesses in 2011, archives show.”

“The cap applies to all personal injury awards,” said attorney Hu Hamilton. “And a lot of states just address medical malpractice. But Tennessee took a broad-brush approach and applied it to everything.”

Hamilton said he sued Durham School Services, the private company that provides most of the county’s school buses and drivers, in 2013 after a bus driver crossed the center line and caused an accident. That suit ended in settlement in 2015.

“They’re a very big company. They’re very well off. And they have plenty of insurance,” Hamilton said of Durham. “For a child, which is the context we’re talking about, the money goes to the parents. And $750,000 for the loss of a child is almost an insult.””

“One lawsuit can assert claims for medical expenses, pain and suffering, and any other non-economic damages. In Tennessee, juries break down each one, assigning a monetary value to each, Hamilton said.

However, if a jury returned an amount higher than $750,000 for non-economic damages, the judge would have to go back in and reduce that amount, because the cap still applies, Hamilton said.”

However, there is hope in a constitutional challenge, and there could be other options.  Any lawsuit involving the death of a child or a severely child should include a constitutional challenge to the caps. In other states, including Georgia, the courts have found such arbitrary limits to be an unconstitutional infringement of the right to trial by jury. The Tennessee Supreme Court has the power to find Tennessee’s $750,000 cap to be unconstitutional, but has yet to rule.

Filing suit in another state, such as Illinois should also be considered, and all other options should be considered, including punitive damages, if appropriate.

Durham School Services Has at Least $13,500,000 Liability Coverage

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Information from reliable sources indicates that Durham School Services is insured with Old Republic Insurance Company.  One policy has limits of $5,000,000.00, and another provides excess coverage of $8,500,000.00.  This is probably on top of a self-retainage limit. Durham School Services, their parent company, National Express LLC (NELLC), operate more than 21,500 school buses and serve more than 500 school districts in 34 states and four provinces in Canada. NELLC is made up of Durham School Services, Petermann, National Express Transit, Trans Express, The Provider Enterprises, Septran, Smith Bus Service, Safeway Training and Transportation Services, White Plains Bus Co., Suburban Paratransit Service and Ecolane in the United States and Stock Transportation in Canada.  Durham and NELLC may have additional layers of coverage, and of course, should have the financial ability to pay the dozens and dozens of claims arising from the tragic Chattanooga school bus wreck on November 21, 2016 regardless of the available liability policies.

Volkswagen may have to buy back its vehicles?

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The California Air Resources Board has recently rejected Volkswagen’s plan to fix the cars involved in the emissions scandal stating that the proposal contains “gaps,” lacks “sufficient detail,” and does “not adequately address overall impacts on vehicle performance, emissions and safety.” Volkswagen, whose North American assembly plant is located here in Chattanooga, has 45 days to propose a different solution.  Fortune reports that California’s rejection of Volkswagen’s proposal to fix the defective vehicles “increases the likelihood that VW will have to buy back hundreds of thousands of vehicles that breach U.S. limits on emissions, substantially raising the cost of rescuing its reputation in the U.S.”

The California Air Resources Board is scheduled on Feb. 2nd to decide on additional plans for repairing another 85,000 VW, Audi and Porsche cars.

 

Remedies Available to Georgia VW and Audi Diesel Owners

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As covered in our previous post, Tennessee’s Consumer Protection Act may provide a good remedy for owners of Volkswagen and Audi diesel automobiles purchased in Tennessee, as it provides for treble damages and attorneys fees.

Cars subject to the recall, which include the following, will have reduced resale and trade-in value, even after the defective emission control systems are corrected:

 

2009 – 2105 VW Jetta TDI;

2010 – 2015 VW Golf TDI;

2010 – 2015 Audi A3 TDI;

2012 – 2015 VW Passat TDI;

2012 – 2015 VW Beetle TDI.

If the car was purchased new in Georgia, the Uniform Deceptive Trade Practices Act, O.C.G.A. Sec. 10-1-370 could provide a good remedy as well.  Private actions are permitted, and if an intentional violation is found, the court can award three times the actual damages under O.C.G.A. Sec. 10-1-399, as well as reasonable attorneys’ fees.  This is very important, as the damages to each individual owner may be relatively modest, depending on the diminution in value of each car, but tripling the damage award and adding attorneys’ fees can make it economically feasible to bring individual lawsuits on behalf of diesel owners as an alternative to participating in one of the hundreds of class action lawsuits already filed around the county.

 

Is Volkswagen Liable for Treble Damages Under Tennessee’s Consumer Protection Act?

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Chattanooga is home to Volkswagen’s only North American manufacturing plant. The recent revelations of manipulation of the emission control software on their diesel automobiles are shocking.

According to the EPA, many Volkswagen and Audi vehicles equipped with 4-cylinder diesel engines were programmed to detect when they were undergoing emissions tests. However, during normal operation the software deactivated some of the onboard pollution control equipment. This process apparently helped improve performance but resulted in the vehicles emitting up to 40 times the allowable levels of additional particulates and smog-causing oxides of nitrogen.

“In a statement published by the car maker . . . Chief Executive Officer Martin Winterkorn said, “I personally am deeply sorry that we have broken the trust of our customers.” (from a CNBC report, 9/21/15)

“Volkswagen has ordered an external investigation of this matter,” he said.  German authorities are set to probe Volkswagen for similar emissions manipulation in Germany, according to Dow Jones.

Volkswagen must now work closely with U.S. authorities, the German Transport Ministry spokesperson told newswires, adding that they expect the company to deliver reliable information.

Meanwhile, Vice Chancellor and Economy Minister Sigmar Gabriel told Reuters he was concerned about the “excellent” reputation of German carmakers, saying Volkswagen’s emissions manipulation was a “bad incident,” according to Reuters. Gabriel also called on the company to fully clear up the egregious claims.

VW could face civil penalties of $37,500 for each vehicle not in compliance with federal clean air rules. Some 482,000 four-cylinder VW and Audi diesel cars sold since 2008 are involved in the allegations.  The U.S. Environmental Protection Agency (EPA) said on Friday the software deceived regulators measuring toxic emissions, adding that Volkswagen could face fines of up to $18 billion as a result.”

Volkswagen Could Face Lawsuits by its Customers:

Is Volkswagen guilty of deliberately misleading its customers?  Would they have bought diesel automobiles knowing they would be spewing out “40 times the allowable levels of additional particulates and smog-causing oxides of nitrogen”?

Although Volkswagen will have to recall all those cars, and fix the problem, the vehicles may not perform as well with the emissions controls working correctly.  How will that affect the resale value of the vehicles?

Is Volkswagen guilty of “unfair or deceptive acts”?

The Tennessee Consumer Protection Act is found at T.C.A. § 47-18-101 et seq.  

T.C.A. § 47-18-102 provides that:

“This part shall be liberally construed to promote the following policies, which includes:

(2)  To protect consumers and legitimate business enterprises from those who engage in unfair or deceptive acts or practices in the conduct of any trade or commerce in part or wholly within this state.”

T.C.A. § 47-18-104 makes the following acts, among others, unlawful and in violation of the law:

(2)  Causing likelihood of confusion or of misunderstanding as to the source, sponsorship, approval or certification of goods or services.

(3)  Causing likelihood of confusion or misunderstanding as to affiliation, connection or association with, or certification by, another. . . .

(5)  Representing that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits or quantities that they do not have . .

(7)  Representing that goods or services are of a particular standard, quality or grade, or that goods are of a particular style or model, if they are of another . . .

(21)  Using statements or illustrations in any advertisement which create a false impression of the grade, quality, quantity, make, value, age, size, color, usability or origin of the goods or services offered, or which may otherwise misrepresent the goods or services in such a manner that later, on disclosure of the true facts, there is a likelihood that the buyer may be switched from the advertised goods or services to other goods or services;

Lawsuits can be brought against the offending company by persons harmed by such practices, T.C.A. § 47-18-109:

“(a) (1)  Any person who suffers an ascertainable loss of money or property, real, personal, or mixed, or any other article, commodity, or thing of value wherever situated, as a result of the use or employment by another person of an unfair or deceptive act or practice described in § 47-18-104(b) and declared to be unlawful by this part, may bring an action individually to recover actual damages.”

Treble damages can be awarded under subsection (a)(3):

“If the court finds that the use or employment of the unfair or deceptive act or practice was a willful or knowing violation of this part, the court may award three (3) times the actual damages sustained and may provide such other relief as it considers necessary and proper, except that the court may not award exemplary or punitive damages for the same unfair or deceptive practice.”

The damages may be substantial, if the resale value of a Volkswagen or Audi vehicle is diminished, even after the recall repair work is performed.

Attorneys’ fees may be awarded under subsection (e)(1): 

“Upon a finding by the court that a provision of this part has been violated, the court may award to the person bringing such action reasonable attorney’s fees and costs.”

 

Apportionment of Damages in Georgia, Zaldiver v. Prickett

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Georgia’s modified comparative negligence system was radically altered by the tort reform legislation enacted in 2005.  The legislation was rammed through the General Assembly so fast there was none of the usual vetting by the judiciary committees and the resulting laws, effective February 16, 2005, were poorly drafted and procedurally confusing.  Until 2005, apportionment of damages was permitted in Georgia only in those cases against “more than one person” where “the plaintiff is himself to some degree responsible for the injury or damages,” O.C.G.A. § 51-12-33.

O.C.G.A. § 51-12-33 now provides:

“(a) Where an action is brought against one or more persons for injury to person or property and the plaintiff is to some degree responsible for the injury or damages claimed, the trier of fact, in its determination of the total amount of damages to be awarded, if any, shall determine the percentage of fault of the plaintiff and the judge shall reduce the amount of damages otherwise awarded to the plaintiff in proportion to his or her percentage of fault.

(b) Where an action is brought against more than one person for injury to person or property, the trier of fact, in its determination of the total amount of damages to be awarded, if any, shall after a reduction of damages pursuant to subsection (a) of this Code section, if any, apportion its award of damages among the persons who are liable according to the percentage of fault of each person. Damages apportioned by the trier of fact as provided in this Code section shall be the liability of each person against whom they are awarded, shall not be a joint liability among the persons liable, and shall not be subject to any right of contribution.

(c) In assessing percentages of fault, the trier of fact shall consider the fault of all persons or entities who contributed to the alleged injury or damages, regardless of whether the person or entity was, or could have been, named as a party to the suit.

(d) (1) Negligence or fault of a nonparty shall be considered if the plaintiff entered into a settlement agreement with the nonparty or if a defending party gives notice not later than 120 days prior to the date of trial that a nonparty was wholly or partially at fault.

(2) The notice shall be given by filing a pleading in the action designating the nonparty and setting forth the nonparty’s name and last known address, or the best identification of the nonparty which is possible under the circumstances, together with a brief statement of the basis for believing the nonparty to be at fault.

(e) Nothing in this Code section shall eliminate or diminish any defenses or immunities which currently exist, except as expressly stated in this Code section.

(f) (1) Assessments of percentages of fault of nonparties shall be used only in the determination of the percentage of fault of named parties.

(2) Where fault is assessed against nonparties pursuant to this Code section, findings of fault shall not subject any nonparty to liability in any action or be introduced as evidence of liability in any action.

(g) Notwithstanding the provisions of this Code section or any other provisions of law which might be construed to the contrary, the plaintiff shall not be entitled to receive any damages if the plaintiff is 50 percent or more responsible for the injury or damages claimed.”

Recently, in Zaldiver v. Prickett, 2015 Ga. LEXIS 547 (7/6/15), the Georgia Supreme Court held that fault could be allocated to the plaintiff’s employer on a negligent entrustment theory.   It was an odd case, as the defendant contended the plaintiff’s employer was negligent in entrusting the vehicle to the plaintiff.  The Supreme Court held that negligent entrustment of an instrumentality can be a proximate cause of an injury to the person to whom the instrumentality was entrusted, and in the process created a new tort in Georgia, “first party negligent entrustment.”

Under O.C.G.A. § 51-12-33 fault can now be apportioned to entities the plaintiff cannot recover from, such as his or her employer, in spite of the clear language in subsection (b) that the trier of fact can “apportion its award of damages among the persons who are liable.”  An employer simply cannot be held “liable” for damages sustained by its employee in Georgia under O.C.G.A. § 34-9-11.  See dissent by Justice Benham.  However, the majority found otherwise, but to reach that conclusion, they had to overrule Ridgeway v. Whisman, 210 Ga. App. 169 (1993), and hold that negligent entrustment of a vehicle or some other instrumentality to a minor or inexperienced person could result in liability if that person is injured by is use.

Most intriguing, however, are hints by Justice Blackwell that the statute might not apply in all tort cases.  What did he mean by the comment “in the cases to which the statute applies” (f.n.3)?  Does that mean that damages cannot be apportioned unless “an action is brought against more than one person for injury to person or property” and “the plaintiff is to some degree responsible for the injury or damages claimed”?  In other words, if a lawsuit was brought against a single defendant allocation of fault to non-parties would not be permitted?

 

Tennessee’s One Year Statute of Limitations Can Be Extended to Two Years When Criminal Charges Are Pending Against the Defendant

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Tennessee’s one year statute of limitations for personal injury claims often forces plaintiffs to file suit before they even know the full extent of their injuries.  On the other hand, there are probably many meritorious cases that cannot be filed because the statute of limitations expires before the injury victims even think about filing a lawsuit.  Occasionally, plaintiffs cannot access critical evidence due a pending criminal investigation.  The Tennessee legislature has finally granted some relief in the latter situation by extending the statute of limitations from one to two years if:

“(A) Criminal charges are brought against any person alleged to have caused or contributed to the injury; (B) The conduct, transaction, or occurrence that gives rise to the cause of action for civil damages is the subject of a criminal prosecution commenced within one (1) year by: (i) A law enforcement officer; (ii) A district attorney general; or (iii) A grand jury; and (C) The cause of action is brought by the person injured by the criminal conduct against the party prosecuted for such conduct.”  T.C.A. § 28-3-104(a)(2).

So if criminal charges are brought against a defendant within one year after the wreck or other event causing injury, the one year SOL can be extended for another year, if all of the foregoing conditions are met.  This amendment to T.C.A. § 28-3-104 was effective July 1, 2015.  Unfortunately, not many lawyers will be willing to take the risk of waiting more than a year to file suit in a personal injury case where criminal charges are pending, so this provision will not be used often.  However, situations can be envisioned where a meritorious claim might be saved by the operation of this new law.

GEORGIA HOSPITALS CAN FILE LIEN TO RECOVER CO-PAYS AND DEDUCTIBLES

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MCG Health filed a $36,177.68 lien against the plaintiff’s cause of action in MCG Health v. Kight, 2015 Ga. LEXIS (3/2/15) pursuant to the Georgia Hospital Lien law, OCGA § 44-14-470 et seq for the “reasonable charges” of hospital care furnished to the plaintiff. However, at that time, the Hospital had been compensated by insurance payments from Blue Cross Blue Shield for the bulk of its discounted charges. However, the hospital was still owed $261.10 in unpaid discounted payments due from Blue Cross, and another $186.48 in unpaid deductibles or co-pays due from the plaintiff. After lien was filed, the plaintiff continued to receive care, and, eventually owed the Hospital a total of $863.10 in deductibles or co-pays. The Hospital has modified its lien to reflect that amount. The plaintiff attacked the validity of the lien arguing that there was no debt owing at the time it was filed, and sought an award of attorney’s fees. The Court of Appeals reversed the trial court and the Supreme Court affirmed:

“Contrary to the ruling of the trial court and Kight’s arguments to this Court, the Hospital was owed money on the date that the lien was filed. As a result, Kight’s principal argument that there was no debt on which to base any lien must fail. Likewise, Kight’s corollary argument that the Hospital waived its right to impose a lien also fails based on the facts of this case. The Hospital’s contract with Blue Cross explicitly reserves the Hospital’s right to collect deductibles and co-pays directly from Kight, irrespective of the agreement to hold Kight responsible only for a discounted price of treatment. Contrary to Kight’s argument, this is not a situation in which the Hospital has agreed to no recourse whatsoever except against the patient’s insurer. For that reason, Kight’s reliance on cases such as MCG Health, Inc. v. Owners Ins. Co., 288 Ga. 782 (707 SE2d 349) (2011) is misplaced. Finally, Kight’s tertiary argument that the Hospital’s lien was required to be exact on the date it was filed or be considered void ab initio also fails. There is nothing in OCGA § 44-14-470 et seq. imposing such a requirement, and we will not judicially legislate one.”

This decision appears to permit hospitals to file a lien for the full amount billed and then reduce it later to adjust for payments by a medical insurer. However, it appears that a hospital cannot use the hospital lien statute to “balance bill” the plaintiff for the difference between the full amount and the discounted payment it has accepted. The Court seems to be limiting the recovery to deductible and co-pays.

Link to Georgia Supreme Court Opinion: http://www.gasupreme.us/sc-op/pdf/s14g0603.pdf

 

Retaliatory Discharge – Tennessee

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In Haynes v. Formac Stables, Inc., (Tenn. 2015), the plaintiff brought suit against his employer after he was allegedly terminated as the result of complaining of illegal conduct on the part of the owner/employer.   The trial court dismissed the plaintiff’s retaliatory discharge claims because he failed to report the illegal activity to anyone other than the person who allegedly engaged in the activity; namely, the owner/employer.  The Court of appeals affirmed the dismissal. The Tennessee Supreme Court held that an employee must report an employer’s wrongdoing to someone other than the wrongdoer to qualify as a “whistleblower.”  In a situation where the wrongdoer is a manager, owner, or highest ranking officer within the company, the employee would need to report the employer’s wrongdoing to an outside entity.   As a result, the judgment dismissing the claim was affirmed.

 

Hamilton County Circuit Court Judge Finds Caps on Non-economic Damages to be Unconstitutional

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On Monday, March 9, 2015, Judge Neal Thomas issued a 24 page opinion in Clark v. Cain, 12C1147, Hamilton County Circuit Court, finding that Tennessee’s caps on non-economic damages (T.C.A. § 29-39-101) are unconstitutional. The decision affects only the pending case, but if it goes up on appeal, it will have statewide impact. In 2011, the Tennessee legislature passed a law limiting damages for pain and suffering in personal injury and wrongful death cases to $750,000, or $1,000,000 in cases of catastrophic injury. However, Article I, Sec. 6 of the Tennessee Constitution provides:

“That the right of trial by a jury shall remain inviolate, and no religious or political test shall ever be required as a qualification for jurors”

Judge Thomas reviewed the history of trial by jury in England, the British colonies and the United States and concluded that the legislative branch cannot take away the right of citizen juries to determine the amount damages. The opinion was issued after the defendants filed a motion for summary judgment seeking a pretrial ruling on the issue.

Below is a link to the article published in the Chattanooga Times Free Press

http://www.timesfreepress.com/news/local/story/2015/mar/09/judge-rules-tennessees-cap-jury-damages-unconstitutional/292361/

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