CM Report of Recent Decisions (2006v2)
2006 Volume 2
A summary of significant recent developments in the law focusing on substantive issues of litigation and featuring analysis and commentary on special points of interest.
Download this publication as a PDF
Articles in this report
On May 23, 2006, the United States Patent and Trademark Office issued the 100th utility patent I have written and prosecuted (U.S. Patent No. 7,048,118, “Support Post With Locking Feature”), the last 14 while I’ve been with Clausen Miller. The journey to 100 patents has been interesting, rewarding and, yes, fun. I love what I do, and I’ve learned a few things along the way.
"Total Loss" in Missouri Valued Policy Statute is Unambiguous
The United States District Court for the Eastern District of Missouri has held that the phrase “total loss” as used in Missouri’s valued policy statute is unambiguous. Schaffer v. Safeco Insurance Company of America, 2006 WL 1313992 (E.D. Mo. 2006).
Failure to Obtain Illinois Professional Engineer's License Not Fatal to Admissibility of Opinions
This matter has risen through the appellate court and made its way to the Illinois Supreme Court on June 2, 2006. It has previously been reviewed in the CM Report and brings to a head the issue of whether an engineer testifying in Illinois is required to obtain a professional engineer’s license under the Illinois Professional Engineering Practice Act of 1989 in order to admit his/her testimony and opinions. However, a second question as to whether the unlicensed testifying expert was in violation of the Illinois Professional Engineering Act, which is a Class A misdemeanor, and in violation of a cease and desist order, was not directly answered by the Illinois Supreme Court. Instead, the Court, in dicta, may have indicated that such testimony was a criminal act.
Illinois Appellate Court Holds That a Cruise Ship Can Be Vicariously Liable for the Negligence of its On-Board Physician in Treating Passengers
The Illinois Appellate Court departed from the well-established rule set forth in Barbetta, a Fifth Circuit opinion, and instead chose to follow the decisions in Nietes and Carlisle, two district court cases. Mack reflects that state courts motivated to do so may reject maritime law precedent of higher federal courts, in favor of rulings from lower federal courts, or even other state courts. Rather than applying admiralty law as interpreted by the highest federal authority, state courts may select the maritime law holding that best suits the outcome sought to be achieved.
Illinois Supreme Court Divided Over When Plaintiff's Chosen Venue May Be Overridden
The Illinois Supreme Court recently split over the issue of how much deference to accord a plaintiff’s choice of venue. Langenhorst v. Norfolk S. Ry. Co., No. 99924, 2006 WL 487878 (Ill. Mar. 2, 2006). In a 4:3 decision, the high court refused to transfer venue from St. Clair County — despite the fact that neither plaintiff nor her decedent lived there and the accident did not occur there.
Illinois Supreme Court Finds Prejudice to Insurer Not Required to Disclaim Coverage for Late Notice
Shedding clarity on the frequently litigated prejudice factor in late notice defenses to coverage, the Illinois Supreme Court upheld the notice obligation as a valid precondition to coverage under Illinois law and specifically overruled several Illinois appellate decisions holding that the insurer must demonstrate prejudice in order to disclaim coverage for late notice. Country Mutual Ins. Co. v. Livorsi Marine, Inc., 2006 WL 1348722 (May 18, 2006).
Illinois Supreme Court Holds Lost Punitive Damages Not Recoverable in Legal Malpractice Action
In a 4-3 split opinion, the Illinois Supreme Court follows California and New York in holding that lost punitive damages are not recoverable in a legal malpractice action. Tri-G v. Burke,
Bosselman & Weaver, 2006 WL 1702282 (Ill. 6/22/06).
Loss in Progress Rule Bars Coverage Where, At Time of Policy's Inception, Insured Knew About Damage That Could Lead to a Third Party's Claim Against It
In American & Foreign Ins. Co., Inc. v. Sequatchie Concrete Services, Inc., 441 F.3d 341 (6th Cir. 2006), the United States Court of Appeals for the Sixth Circuit, applying Tennessee law, found that the loss in progress rule bars coverage where the insured knew about a potential claim against it .
Monies Collected as Compensation to the Public at Large are Covered "Damages"
As in the State Farm policy at issue here, general liability policies provide coverage for specifically defined “damages.” In order to determine whether a particular claim incorporates “damages” under a policy, the underlying recipient and the purpose for the payment must be explored. According to the court in State Farm, money sought for the purpose of punishment or as punitive or exemplary damages does not satisfy the definition of “damages” under a general liability policy. Funds sought by a government entity for the purpose of compensating the public at large or a specific group can satisfy the definition of “damages” under a policy even if none of the money will go to a specific aggrieved individual. Recovery of funds on behalf of the public at large for the purpose of compensating those individuals for their injury is sufficient to satisfy the definition of “damages.”
No Right to a Jury Trial Exists for the Apportionment of the Settlement Proceeds in a Wrongful Death Action Among Different Families
In Kim v. Yi, 42 Cal. Rptr. 3d 842 (Cal. App. 2006), the California Court of Appeal held that wrongful death plaintiffs from different families do not have a right to a jury trial to apportion the amount of the settlement proceeds.
Policyholder Accounting Expert Barred
A Court of Appeals of Texas affirmed the barring of the policyholder’s damages expert David A. Borghesi, a C.P.A., in Wyndham International, Inc. v. Ace American Ins. Co., 186 S.W.3d 682 (2006). The court reasoned that his testimony was unreliable.
Proposition 51 Meets Intentional Tortfeasors: California Court Holds That an Intentional Tortfeasor is not Entitled to Apportionment of Noneconomic Damages Where the Negligence of Others also Contributed to the Injury
In a case of first impression, a California appellate court has held that an intentional tortfeasor was liable for all of an injured plaintiff’s non-economic damages and was therefore not entitled to a reduction by apportionment of those damages under Proposition 51, a California statute which provides for the apportionment of non-economic damages. Thomas v. Duggins Construction Co., Inc., 44 Cal. Rptr. 3d 66 (2006).
The Big Daubert Hurdles in Fire & Explosion Litigation
Daubert was intended to “liberalize” federal evidence practice and abolish the insistence that expert opinions represent consensus views. The so-called Daubert test has produced significant hurdles for achieving recoveries and has led to hard-fought battles in fire and explosion cases.
The NASD and NYSE Suitability Rules - An Asset for Investors
Since the stock market bubble burst which occurred in the 2000 to 2001 time period, there has been a significant increase in the amount of litigation brought by investors against their financial representatives and security brokerage firms. The investors are often seeking to recover losses sustained in their brokerage accounts as a result of market losses.
U.S. Maritime Law Applies to Product Liability and Punitive Damage Claims, But State Law Determines Measure of Punitive Damages
In Linda Szollosy v. Hyatt Corp., 396 F. Supp. 2d 159 (D. Conn.), plaintiff brought suit on behalf of her minor son seeking recovery for injuries suffered while riding on a small personal watercraft on vacation at a Cayman Islands resort. Plaintiff’s complaint alleged five counts: negligence and breach of warranty by defendant Hyatt Corporation; and negligence, breach of warranty and strict products liability against defendants Watersports Administration (“WAI”) and Red Sail Cayman Ltd. The parties asked the court to conduct a choice-of-law analysis as to what body of law should govern the plaintiff’s negligence, breach of warranty, products liability and punitive damage claims. Plaintiff argued that Connecticut law should govern, while defendant argued that Cayman Islands law was more appropriate.
When Businesses Compete Fiercely, Crossing Certain Boundaries May Give Rise to Tortious Interference Claims
Competition is at the heart of our capitalist economic system rewarding businesses supplying the best goods and services at the best value. Despite the high value we place on robust competition, boundaries do exist. Conduct that may be perceived as just “in your face” competition, may give rise to serious liability under the tort of tortious interference with economic relations. This article addresses the liability hooks and the tug-of-war between legitimate competition and inappropriate interference with contractual relationships.
