Tag: Norman Kinzey

Over the past several months, there have been several decisions and developments which are potentially significant to the practice of insurance law. These involve legal malpractice, employer liability, and claims against health care providers for premises liability. Always, each case involves different facts and law, and accordingly the following must be taken for general information purposes only, rather than for action upon any specific fact situation.

Legal Malpractice: Probate Proceedings

In Smith v. O’Donnell, Executor of the Estate of Corwin Denney, 07-0697 (Tex. 2009), the Supreme Court extended its previous holding that an executor was in privity with a decedent’s attorney (and thus could sue for estate planning malpractice) to allow suit by an executor against a decedent’s attorney for the decedent’s survivable claims for legal malpractice against the attorneys who advised decedent with respect to the decedent’s actions while serving as executor to the estate of the decedent’s previously deceased wife.

Though the facts are complex, some 29 years after the alleged malpractice, the beneficiaries of the wife’s estate sued the estate of the deceased executor of the wife. The executor of the deceased executor settled the claims of the wife’s beneficiaries, and then brought suit for legal malpractice against the attorneys who had advised the deceased executor. Although the rule ostensibly remains in Texas that intended beneficiaries under a will or other third parties who lack privity with a deceased’s attorney cannot sue for malpractice in their own right, given the right approach and the right facts, there are ways around that prohibition which can ultimately allow a recovery against a decedent’s attorneys for malpractice, whether it be for malpractice involved in estate planning or for malpractice committed during the probate process.

No Liability of Employer to Third Party for Injuries due to Fatigue of Off-Duty Employee:

In Nabors Drilling, USA, Inc. v. Escoto, 06-0890 (Tex. 2009), the Supreme Court reiterated the general rule that employers in Texas do not owe a duty to third parties for the tortious activities of off-duty employees occurring off the work site. Although limited exceptions exist, e.g., when an employer sends an obviously intoxicated employee to drive home, and/or where the employee is using the employer’s vehicle, our Supreme Court held that an employer in Texas has no duty to prevent injury due to the fatigue of its off-duty employee or to train employees about the dangers of fatigue.

Thus the employer had no liability for an accident arising out of a fatigued employee’s use of the employee’s own vehicle while driving home from work after a tiring work shift, where the employer did not affirmatively exercise control over the tired employee. Because of the many factors which can contribute to an employee’s fatigue, including factors arising from the employee’s activities before reporting to work and while at work, the court held that imposing a duty on employers to prevent their employees from driving while fatigued is not reasonably justified, and concomitantly held that there is no duty of an employer to train employees about the dangers of fatigue.

Negligently Maintained Hospital Bed is Not a Healthcare Liability Claim:

In Marks v. St. Luke’s Episcopal Hospital, 07-0783 (Tex. 2009), the Supreme Court dealt with whether a hospital patient’s fall from a negligently maintained hospital bed was a healthcare liability claim under the “Medical Liability and Insurance Improvement Act” of Texas, which act precludes claims if the plaintiff fails to timely file an expert report substantiating the claim. Noting that the Texas medical liability statute was specifically intended to apply to situations having a “material adverse effect on the delivery of medical
and healthcare services in Texas,” the Supreme Court rejected the hospital’s contention that a healthcare liability claim includes any injury to a patient negligently caused by any unsafe condition at a healthcare facility.

Rather, the Supreme Court held that the patient’s fall from a defective hospital bed involved the failure of a piece of equipment which did not involve a “departure from the accepted standards of medical care or health care,” was merely “incidental to the patient’s care,” was more in the nature of a premises liability claim, and that the claim in this case based on the defectively assembled or maintained hospital bed was not governed by the Texas healthcare liability statute.

The result of this ruling was to obviate the need for any supporting expert medical report, avoided the damage caps contained in the Texas medical liability statute, and ostensibly would invoke insurance coverage available from the hospital’s CGL carrier rather than or in addition to the hospital’s medical malpractice carrier. Indeed, in cases alleging both premises liability and healthcare liability claims, both the CGL carrier and the medical malpractice carrier of a healthcare provider in Texas could see defense and apportionment issues arise.”

By H. Norman Kinzy

Over the past several months, there have been several decisions and developments which are potentially significant to the
practice of insurance law. These involve settlements, limitations and insurance coverage.

Always, each case involves different facts and law, and, accordingly, the following must be taken for general information purposes only, rather than for action upon any specific fact situation. Protection of Medicare Claims: As of July 1, 2009, there is now a requirement that insurors and self-insureds must report certain information pertaining to settlements and judgments involving Medicare recipients to the federal government. Thus, all parties, their insurers, and their lawyers must take steps to insure that the claims of the United States for the recovery of Medicare monies paid to plaintiffs are protected.

Such claims of the U.S. government constitute independent claims to recover Medicare money paid to plaintiffs because of accidents. Thus, the failure of a party, an insurer and/or the parties’ attorneys, and/or the Medicare recipients to make certain that such monies are reimbursed to the U.S. government may generate liability for a duplicate payment to the U.S. government, even though already paid to the plaintiff.

Medicaid recipients who may be involved are generally over 65 years old, although for certain illnesses, such as renal failure, Medicare claims for reimbursement may extend to people of all ages.

The Texas Tort Claims Act-“Special Defect”:

In Denton County, Texas v. Beynon, 08-0016 (Tex. 2009), the Supreme Court held that for purposes of liability suits against the state of Texas, a “special defect” under the Texas Tort Claims Act is limited to “excavations or obstructions” that exist “on” the roadway surface. Therefore, a horizontal floodgate arm barring access to a roadway, which was located approximately 3 feet above the surface of a two-lane rural highway, was not a “special defect” under the Texas Tort Claims Act, and the plaintiff was not entitled to sue the state of Texas for injuries received in a collision with the floodgate arm.

High-Speed Police Chase Automobile Accident-Coverage Under Policy of Fleeing Driver:

In Tanner v. Nationwide Mutual Fire Insurance Company, 07-0760 (Tex. 2009), plaintiffs sued a fleeing driver, who while being chased by police, collided with the vehicle occupied by plaintiffs. The fleeing driver’s insurer refused to pay damages, and the plaintiffs filed a declaratory-judgment action to recover a default judgment taken against the fleeing driver. Nationwide asserted that the acts of its fleeing insured were intentional, and that the plaintiffs’ claims for bodily injury were thus excluded from coverage under Nationwide’s policy. Our Supreme Court held that “intentionally” as used in the policy exclusion excludes coverage only for “the resulting damage or injury, [and not] the actions that led to it.” Thus, the court held that the exclusionary language voids coverage when the resulting injury was intentional, but not when merely the insured’s conduct was intentional. Accordingly,
Nationwide was held to have coverage for damages resulting from its insured’s intentional effort to avoid police in a high speed chase, because Nationwide’s insured did not intend to cause the plaintiffs’ injuries.

Limitations-No Tolling by Temporary Absence from State:

In Ashley v. Hawkins 07-0572 (Tex. 2009), the Texas Supreme Court held that when a potential defendant leaves Texas following a motor vehicle collision, but is otherwise amenable to out of state service of process, Texas’ two year statute of limitations applicable to personal injury claims is not tolled, and a plaintiff must obtain substituted service by publication or other means to prevent the expiration of the statute of limitations.

No Revivor of Claims Barred by Statute of Repose:

In Galbraith Engineering Consultants, Inc. v. Pochucha, 07-1051 (Tex. 2009), the Supreme Court dealt with the question of whether a claim, which was barred by statute of “repose,” can be revived after a defendant to a lawsuit designates another person or entity as a “responsible third party.”

For purposes of proportionate 33, TEX. CIV. PRAC. & REM. CODE, a defendant may designate a non-party as a “responsible third party.” When this occurs, the plaintiff has a 60-day window in which to bring suit directly against the designated responsible third party despite the fact that the applicable statute of limitations would otherwise bar a direct action against such designated party. However, the statute allowing designation of responsible third parties speaks only of revival of those claims which are “barred by limitations” and does not mention claims barred by statutes of repose. Since statutes of repose are passed by the Legislature to provide a definitive date beyond which an action cannot be filed, and thereby create a statutory right to be free from liability after a specified time, the Supreme Court held that the aforesaid provisions of our proportionate responsibility statute do not revive a plaintiff’s claims against a designated responsible third party when such claims are barred by a statute of repose.”

By H. Norman Kinzy