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Posts Tagged ‘negligence’

Right of Contribution among Joint Tortfeasors is Still Viable in Georgia

Posted on: April 2nd, 2013

By: Bart Gary

Most believed that the right of contribution among joint tortfeasors (two or more persons whose negligence combine to cause injury or damage) was abolished in Georgia in 2005 when the tort reform legislation went into effect. On March 28, 2013, the Georgia Court of Appeal issued its opinion in Zurich Amer. Ins. Co. v. Heard, 2013 WL 124544, and held that the concept of contribution in negligence cases is not completely dead. The case involved a newly constructed hotel with mold and moisture problems. The hotel owner initiated an arbitration proceeding against the general contractor, whose insurers settled the claims, but the contractor did not acknowledge liability and the parties agreed that the settlement did not fully satisfy the owner’s claims. The hotel owner also filed a lawsuit against the designers (architect and engineers) for the hotel and settled with the designers for a relatively modest amount. The insurers of the general contractor sued the designers to recover in contribution and indemnity. The trial court granted summary judgment to the designers as to the contribution claim, but the Court of Appeals reversed that ruling, and held:

[J]oint liability and the right of contribution no longer exist when damages have been apportioned by the trier of fact under this subsection. Based upon this plain language, it cannot be interpreted to abolish the right of contribution between settling joint tortfeasors when there has been no apportionment of damages by a trier of fact. When enacting subsection (b) of OCGA § 51–12–33 in 2005, the Legislature left OCGA § 51–12–32 intact in its entirety and it remains valid law. This latter Code section provides:

(a) Except as provided in Code Section 51–12–33, where a tortious act does not involve moral turpitude, contribution among several trespassers may be enforced just as if an action had been brought against them jointly. Without the necessity of being charged by action or judgment, the right of a joint trespasser to contribution from another or others shall continue unabated and shall not be lost or prejudiced by compromise and settlement of a claim or claims for injury to person or property or for wrongful death and release therefrom.

(b) If judgment is entered jointly against several trespassers and is paid off by one of them, the others shall be liable to him for contribution.

(c) Without the necessity of being charged by an action or judgment, the right of indemnity, express or implied, from another or others shall continue unabated and shall not be lost or prejudiced by compromise and settlement of a claim or claims for injury to person or property or for wrongful death and release therefrom.

(Emphasis supplied.) Based upon the plain language of this statute, the right of contribution between joint tortfeasors has not been completely abolished by the Legislature’s enactment of OCGA § 51–12–33(b), and the trial court erred by holding otherwise. (Citations and footnotes omitted; emphasis by the court).

Settlements of negligence cases must account for the potential for contribution claims by or against a settling party, who is or may be a joint tortfeasor, as was the case before 2005.

Keys to Effective Hold Harmless Agreements

Posted on: February 7th, 2013

By: Bart Gary

The Hold Harmless (Indemnity) Clause of a contract is like the lifeboats on a cruise ship — they just hang around until disaster strikes, and you hope they still work. Periodic review keeps them from becoming obsolete or worse. Indemnity simply means reimbursement, restitution, or compensation. Typically the indemnity provision applies in a three-way situation where a non-party suffers a loss or injury, whether damage to property or bodily harm or death, that arises from or relates to a contract between two other parties, wherein one party (called Party B) agrees to indemnify the other party (called Party A). You, as the party claiming the benefit of the indemnity agreement, will be Party A. The contract may be with a contractor for services including construction, renovation or repair, maintenance, management, cleaning or leases, to name a few, or may be with a supplier of goods such as inventory, machinery, equipment, or parts for manufactured products. Anyone who negotiates, prepares, or reviews such agreement should be aware of these finer points:

Defense

The agreement should include Party B’s obligation to defend, as well as to indemnify, Party A. The law recognizes a distinction between defense and indemnity, and a bare indemnity agreement does not require a defense (or payment of Party A’s attorney’s fees) against a claim. A suggestion: “Party B shall defend, indemnify, and hold harmless Party A….” If it is necessary for Party A to sue Party B for failing to defend or indemnify it, then the agreement should also provide for Party A to recover its attorney’s fees from Party B for such enforcement action.

Negligence

A party may be indemnified for its own negligence, provided that the indemnity agreement expressly says that it covers the negligence by using the word “negligence” or similar language in the agreement.

Public Policy Considerations

Many states, however, have statutes that prohibit attempts to indemnify Party A from the consequences of his or her “sole negligence” in certain types of agreements, including those relating to the construction, alteration, repair, or maintenance of a building structure. Construction and renovation contracts and those for design services fall within this prohibition, but other agreements, such as real estate leases, property management or maintenance agreements, and others relating to the services for a building or real estate, may fall within the prohibition. To prevent an indemnity clause from becoming unenforceable under these statutes, a prudent person will include a disclaimer to the effect that nothing in the agreement should be construed to require Party B to indemnify Party A from the latter’s own, sole negligence.

Insurance Coverage

Even the tightest indemnity clause is only as good as the ability of Party B to honor it financially. Many general liability insurance policies may not provide coverage for “liability assumed by contract,” e.g., indemnity agreements. Coverage in the policies, however, can be obtained within an endorsement adding coverage for Party B’s defense and indemnity obligations, either by expressly referring to the indemnity agreement or on a blanket basis. You should verify that the other party has contractual liability coverage in its liability insurance policy, in addition to any other insurance coverages required by your agreement.

Proportionality

Indemnity agreements are often disfavored by the parties and even the courts due to their perception as being unfair. To alleviate or mitigate objection, you may consider making the indemnity proportional. For example, that Party B’s obligation to indemnify Party A is limited to Party B’s degree of fault or responsibility for the loss or injury. Parties are generally more willing to sign a proportional agreement. This concept is fairer, but it defeats the purpose of placing the burden of the loss entirely upon the other party. Nevertheless, a potential indemnity is to be preferred to no indemnity agreement at all.

Medical Malpractice Lawsuit Dismissed Because Expert Not Qualified

Posted on: January 31st, 2013

By: Scott Rees

In Whitley, the Court of Appeals ordered a medical malpractice lawsuit to be dismissed for failure to satisfy Georgia’s expert affidavit requirements.  O.C.G.A 9-11-9.1 requires that in any medical malpractice lawsuit, a plaintiff must file with the complaint an affidavit of an expert competent to testify as to the alleged medical negligence. O.C.G.A. 24-9-67.1, now 24-7-702, sets forth specific requirements an expert must satisfy in order to be qualified.

Generally, the statute requires experience and knowledge regarding the opinion to be given as a result of active practice or teaching, and the expert must be a member of the same profession (with an exception allowing physicians to testify against nurses and other professionals if certain criteria are met).

In Whitley, the court held that a chiropractor was not qualified to testify as to a physical therapist’s purported negligence, because the chiropractor was not a member of the same profession.  The trial court had ruled the chiropractor was a member of the same profession, because he had performed physical therapy treatment for years, had been trained as a physical therapist, and was a licensed physical therapist in other states (but was not actively practicing as a physical therapist in those states).

The Court of Appeals disagreed with the trial court, holding the chiropractor was not of the same profession, because the two professions were treated separately pursuant to state statutes and regulations.  As a result, the trial court was instructed to dismiss the complaint.  Accordingly, this is just one more example of how important it is to address whether the affiant is properly qualified.

Statutes Affecting Indemnification Agreements in Construction Contracts

Posted on: November 6th, 2012

By: Kamy Molavi

It is quite common for parties involved in construction projects to include indemnity provisions within their construction contracts. In recent years, a majority of states have enacted anti-indemnity statutes that restrict, modify, or invalidate indemnification agreements in construction contracts. With respect to the degree of fault against which indemnity may be barred, two types of anti-indemnity statutes have emerged across the nation. We refer to them as “sole negligence” statutes and “any negligence” statues.

Nearly half of the state anti-indemnity laws void provisions that attempt to require the indemnitor to indemnify the indemnitee for the indemnitee’s sole negligence or willful misconduct. Indemnity in “sole negligence” states is allowed when the indemnitor and indemnitee are each partially at fault, or a portion of fault can be attributed to a third person. Stated another way, under these statutes an indemnitor may have to pay for the injury even if the indemnitee is 99 percent responsible for the injury. Further, in most states that only invalidate “sole negligence” provisions in indemnity contracts, workers compensation and insurance agreements are not affected by the “sole negligence” indemnity prohibition in the statute. However, several state statutes are silent on these issues. Examples of typical “sole negligence” anti-indemnity statutes are those enacted in Alaska and Georgia.

Several states have enacted versions of a different variety of anti-indemnity statute, referred to as “any negligence” states. This type of anti-indemnity statute voids contract provisions that require indemnification for losses or damages arising out of the indemnitee’s negligence, whether sole or partial. Thus, this type of anti-indemnity statute would necessarily include “sole negligence” prohibitions.  In states that have “any negligence” anti-indemnity statutes, the indemnitee is more restricted from shifting the risk onto a non-negligent party than in “sole negligence” states.

Recent case law addressing anti-indemnity laws has highlighted some of the fine points in the statutes and public policies of the states. One current issue is whether the contract qualifies as a “construction contract” and thus is subject to the state’s anti-indemnity statute.  All of the states that have analyzed this issue recently have decided that the term “construction contract” in the anti-indemnity statutes should be interpreted broadly. Georgia courts, for example, have interpreted the anti-indemnity statute broadly to apply to assignment agreement transferring the maintenance and repair of a residential subdivision to the homeowners association. Likewise, New Mexico has interpreted the applicability of its anti-indemnity statute to encompass maintenance activities in improving a property and agreements for rental equipment to be used in construction activities.

Another recent trend involves the interplay between indemnity and insurance, and specifically those statutes which contain an “insurance savings” clause. These situations arise in states where the anti-indemnity statute expressly prohibits contractual provisions that require the indemnitor to indemnify the indemnitee for the indemnitee’s negligence, and also expressly state that the code section does not affect the validity of an insurance contract and/or any other agreement issued by an insurer. An example of an insurance savings clause is in the Alaska statute that states it does not affect the validity of insurance policies. The interplay between these two statutory provisions has not uniformly interpreted among the various jurisdictions. As one example in a coverage dispute, the Delaware Supreme Court found that despite the public policy against indemnification for someone else’s negligence, whether the indemnification is direct or indirect, the “insurance savings provision” is enforceable. The Delaware Supreme Court stated that insurance companies are sophisticated and should not be able to use the anti-indemnity statute as a shield to decline coverage after it is purchased.

Some states are statutorily silent with respect to the validity of indemnity agreements in construction contracts, but their courts recently have addressed the issue. For example, the Nevada Supreme Court recently found that a party can be contractually required to indemnify another for the indemnitee’s negligence, but only if the contract for indemnity contains “an express or explicit reference to the indemnitee’s own negligence.” Thus, a general statement requiring the indemnitor to indemnify the indemnitee for “any and all claims” is not sufficient in Nevada.

In summary, if a loss arises and any applicable contract contains an indemnification clause, it is imperative for construction contractors and designers, as well as their claims adjusters and attorneys, to carefully review governing statutes and court opinions in order to determine whether the indemnification clause is enforceable, and if so, to establish the types of claims and damages to which the clause may apply.

This article is excerpted from materials for a Defense Research Institute seminar presented in Phoenix, AZ, in September of 2012. For a copy of the complete article, including a chart of various statutes, click here.

When is Medical Care Not an Emergency? Clever Lawyering Finds a Loophole in the Stringent Gross Negligence Standard

Posted on: November 5th, 2012

By: Mike Flint and Laura Broome

In 2005, the tort reform passed by the Georgia legislature included a statute that changed the standard for suing emergency room health care professionals in medical malpractice actions. The statute in essence states that no health care provider who provided emergency medical care in a hospital emergency department, or surgery suite, etc., after the patient has been treated in the emergency room, shall be held liable for an action in medical malpractice unless it is proven by clear and convincing evidence that the physician or health care provider’s actions showed gross negligence. The standard for liability of emergency medical care personnel was changed thereby from ordinary negligence by a preponderance of the evidence to gross negligence by clear and convincing evidence.

Case law further defines the new gross negligence proven by clear and convincing evidence standard as “that degree of care which every man of common sense, however inattentive he may be, exercises under the same or similar circumstances.” In other words, gross negligence has been defined as “equivalent to [the] failure to exercise even a slight degree of care.” “Clear and convincing evidence” is “a more stringent standard than ‘preponderating’ and requires a greater quantum and a high quality of proof in plaintiff’s favor.” As a result of this higher standard, there has been far fewer malpractice lawsuits filed against emergency room professionals.

Despite these hurdles, a recent trial suggests that a jury may be allowed to determine whether emergency medical care was provided in the emergency room, thereby triggering the higher standard in the first place. In the recent case, the plaintiff was presented to an emergency room with severe leg pain, but was sent home with a diagnosis of a skin rash, despite not being able to walk. The plaintiff later returned to the emergency room by ambulance after she was found unresponsive, and was determined to have severe blockage in her leg arteries. The plaintiff’s legs were both amputated below the knees a few days later.

Plaintiff’s counsel argued that the lower standard of ordinary negligence under a preponderance of the evidence standard should apply because the legal definition of emergency medical care does not include non-urgent patients in stable condition. Plaintiff’s counsel claimed that this plaintiff was considered to be a non-urgent patient in stable condition during her first trip to the emergency room.

The judge allowed the jury to decide whether the plaintiff received emergency medical care, and thus whether the gross negligence standard or ordinary negligence standard applied. The jury determined that the care the plaintiff received in the emergency room during the initial visit was not emergency medical care, and thus applied the ordinary negligence standard in the case.  In doing so, the jury further decided the emergency room defendants were negligent in failing to diagnose the plaintiff’s blocked arteries during the initial emergency room visit, and awarded $5 million to the plaintiff in damages.

It will certainly be interesting to see if other courts follow this lead in allowing juries to decide which standard applies.